NEW YORK: Brazil’s South Minas region has lost 19% of its coffee crop potential for next season after a wave of frosts in June and July hit the most important producing area in the world’s largest exporter, coffee trader Comexim said on Wednesday.

“Frost hit hard and considerable damage was done,” said the trader, as the global coffee market continues to assess the situation in Brazil amid contrasting opinions about how bad the 2022 crop will be Comexim’s projection is an update of a previous view from the trader and exporter that estimated potential crop damage at 12.5% for South Minas.

It also sees potential losses of 13% for the crop in Sao Paulo state, Brazil’s second largest arabica coffee producer, 13% for the Cerrado area, another important producing region in Minas Gerais, and 11% for Parana state, a smaller producer.

Brazil’s 2022 crop would be an “on-year” in arabica’s biennial production cycle that alternates years of higher and lower production. The current season was a tough “off-year”, as the worst drought in 90 years in the country made production even smaller than normal.

Comexim believes benchmark arabica coffee prices in New York are yet to properly reflect the damage done in Brazil. “The calm winds of the market, which traded in the relatively narrow band between 171-182 cents/lb in the last week, make us wonder what is happening, because frost damage pointed towards a bullish market that is yet to become reality,” the trader said.