Log in
E-mail
Password
Show password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

STARBUCKS CORPORATION

(SBUX)
  Report
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Frosts stain Brazil coffee belt, growers see nearly a third of fields hit

07/30/2021 | 03:34pm EDT

VARGINHA, BRAZIL, July 30 (Reuters) - Brownish spots have stained large areas of coffee fields in the south of Brazil's top producer Minas Gerais, a sign that the worst cold snap in nearly 30 years will hurt production for at least the next two crops, according to an agronomist.

Adriano de Rezende, technical coordinator at the Minasul coffee cooperative, estimated that between 20% and 30% of the crops were hit by the unusually cold temperatures that reached the region on July 20, spurring the worst frost since 1994, according to farmers and analysts.

"It was worse than I imagined," said Rezende said after flying over the region on Thursday. "It's hard to see a field that hasn't suffered any damage."

Rezende flew over farms in Varginha and other areas in Minas, such as Eloi Mendes, Paraguaçu, Alfenas, Machado, Boa Esperança e Carmo da Cachoeira.

The agronomist and local farmers said that frost struck the region again on Friday but it was less intense, also hitting the Serra da Mantiqueira area, as a new polar mass advances through the center-south region.

Minasul operates in the south of Minas Gerais, a region that accounted for around 40% of arabica coffee production in Brazil in 2020. Arabica is the main type used by large coffee companies such as Starbucks and Nestle.

Another key producing region, the Cerrado Mineiro, has also been severely impacted.

Minasul President Jose Marcos Rafael Magalhaes estimates the coffee sector in Minas Gerais will lose 5 billion to 6 billion reais ($971.5 million-$1.17 billion) due to lost production.

The frosts in Brazil, the world's largest producer and exporter of coffee, sent prices in New York sky-rocketing to above $2 per pound for the first time since 2014 earlier this week.

Rezende believes it is early to estimate production losses precisely, as more frosts were expected.

He also said that the intensity of the burning by the cold varies even in the same field in a farm, what makes the evaluation harder.

The production cycle of arabica coffee alternates years of high and lower production, since trees get stressed after a large crop and produce less the following year.

Brazil is currently in an off-year, with production seen at around 55 million 60-kg bags by analysts, down from around 70 million bags in 2020. The worst drought in 90 years has also impacted output.

A larger production in 2022 was considered key by analysts to guarantee a balanced global supply next year, as consumption grows around the world due to the reopening of coffee shops after coronavirus-related restrictions.

FALLING LEAVES

While visiting the Mato Dentro farm in Varginha, the agronomist said that in a month's time, all the burned leaves will be on the ground, which will make it easier to check how badly the trees were damaged.

The more heavily damaged trees will need a heavy pruning, which means they will only produce again after two years.

Farmer Flavio Figueiredo de Rezende, who produces coffee in Varginha and Carmo da Cachoeira, said that before the frosts, he was expecting near record production in 2022.

"But now, if we produce the same as this year's, it would be already good. It is sad, but that is part of our struggle".

The farmer said the damage will not increase much, since the same areas are likely to be hit by the new polar mass.

Magalhaes, Minasul's president, who is also a farmer, said that most of the production potential for coming crops was lost.

He also said that a lot of coffee seedlings, which became key for the recovery work ahead, were also burned by the cold.

"The recovery will take long. Beyond the damage to young trees, there are no seedlings to plant or expand," he said.

($1 = 5.1469 reais) (Reporting by Roberto Samora Writing by Ana Mano and Marcelo Teixeira Editing by Marguerita Choy)


ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
EURO / BRAZILIAN REAL (EUR/BRL) -0.35% 6.2839 Delayed Quote.-1.42%
NESTLÉ S.A. -0.56% 110.74 Delayed Quote.6.94%
STARBUCKS CORPORATION -0.38% 113.68 Delayed Quote.6.26%
All news about STARBUCKS CORPORATION
09/24Consumer Cos Down On Mixed Spending Views -- Consumer Roundup
DJ
09/24TRACKINSIGHT : Vaccination and ease of restrictions energize Travel and Leisure ETFs
TI
09/23YUM CHINA : to Focus on Smaller Stores, Invest More in Lavazza JV in Expansion Drive
MT
09/23STARBUCKS : Yum China, Italy's Lavazza aim to open 1,000 cafes in China by 2025
RE
09/22Wake up and smell the coffee ... made in the United States
RE
09/20STARBUCKS : Stifel Nicolaus Adjusts Starbucks PT to $130 from $135, Maintains Buy Rating
MT
09/17STARBUCKS CORP : Entry into a Material Definitive Agreement, Termination of a Material Def..
AQ
09/17Starbucks Corporation Enters into A New $3.0 Billion Credit Agreement
CI
09/15Starbucks on Pace for Largest Percent Decrease Since January 2021 -- Data Talk
DJ
09/09UPFRONT & PERSONAL : 'There is value in making mistakes as long as you learn from them,' s..
AQ
More news
Analyst Recommendations on STARBUCKS CORPORATION
More recommendations
Financials (USD)
Sales 2021 29 180 M - -
Net income 2021 3 715 M - -
Net Debt 2021 9 051 M - -
P/E ratio 2021 36,6x
Yield 2021 1,60%
Capitalization 134 B 134 B -
EV / Sales 2021 4,90x
EV / Sales 2022 4,48x
Nbr of Employees 349 000
Free-Float 99,8%
Chart STARBUCKS CORPORATION
Duration : Period :
Starbucks Corporation Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends STARBUCKS CORPORATION
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 34
Last Close Price 113,68 $
Average target price 130,81 $
Spread / Average Target 15,1%
EPS Revisions
Managers and Directors
Kevin R. Johnson President, Chief Executive Officer & Director
Rachel Marie Ruggeri Chief Financial Officer & Executive Vice President
Mellody Louise Hobson Chairman
Gerri Martin-Flickinger Chief Technology Officer & Executive VP
Jeff Wile Chief Information Officer
Sector and Competitors
1st jan.Capi. (M$)
STARBUCKS CORPORATION6.26%134 040
COMPASS GROUP PLC12.73%37 575
DARDEN RESTAURANTS, INC.34.16%20 827
SODEXO11.47%13 176
JUBILANT FOODWORKS LIMITED46.04%7 271
MINOR INTERNATIONAL PUBLIC COMPANY LIMITED26.21%5 032