WRAPUP 1-Rains to end Brazil coffee drought, but damage done

Thu Feb 13, 2014 2:30pm EST

(Adds quote, details from Somar, Cooxupé)

By Roberto Samora and Reese Ewing

SAO PAULO Feb 13 (Reuters) - Forecasters say widespread rains will finally enter the southernmost part of Brazil's coffee belt on Thursday evening, breaking a six-week dry spell, but the crop may already have suffered losses of up to 30 percent.

With rains having already begun in the southern grain- producing state of Rio Grande do Sul, to the south of Brazil's coffee belt, coffee futures prices slid in mid-day trade by nearly 2 percent. After traders first caught wind of potential damages from the drought in late January, prices had jumped 23 percent through Wednesday.

Brazil is the world's largest producer of coffee, with its naturally cured arabica beans making up the backbone of most major commercial blends.

Somar meteorologist Graziela Gonçalves said rains were due to pass slowly through the heart of the coffee belt in Minas Gerais state bringing "significant rainfall" Feb. 15-17.

A report on rainfall volumes published Thursday afternoon by Somar showed light rains had already started to fall in northern Parana and southern Sao Paulo states, as the cold front pushed its way north, deeper into the coffee belt.

Over the past six weeks only trace amounts of isolated rainfall sprinkled the coffee belt, which had clearly caused losses to the crop currently maturing on trees and due to start harvest in May.

Once rains establish themselves in the southern segment of the coffee belt, they will move into the main coffee growing areas, Gonçalves said.

Rainfall will intensify this weekend, leaving accumulations of 28-34 millimeters (1.1-1.3 inches) in the Mogiana, Cerrado and South Minas regions, which account for close to 40 percent of Brazil's coffee crop.

(For a table of rainfall totals over the coffee belt in the past few months, click )

"GUARANTEE LOSSES AROUND 30 PERCENT"

Carlos Paulino da Costa, president of Cooxupé, the world's largest coffee cooperative, told Reuters by phone from a coffee trade fair that 30 percent of the coffee in the region in which the group is active had been lost.

Cooxupé, which is in the heart of Brazil's Minas Gerais, had forecast a crop of 10 million 60-kg bags in the area around the cooperative before the drought hit. Minas Gerais accounts for 50 percent of the national crop.

"I guarantee that the losses are around 30 percent" said da Costa. "If it rains, losses will stop (growing), if not they will continue growing," he said.

The region in which Cooxupé is active accounts for about one-fifth of the national crop.

Brazil's southeast just completed one of the warmest and driest Januaries on record, according to Somar. And coffee, sugar and orange juice futures prices have been rising in response to concerns of losses in yields from the dry weather.

Da Costa said many beans would not grow to their full size and thus would bring down yields. But that was not the only problem.

"Look at the coffee fruit and it looks really good, but look inside it and it's dry. This is the greater loss. It will not come back (with the rains)," da Costa said. (Writing by Reese Ewing; Editing by Jeffrey Benkoe)

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