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How Brazil's Severe Drought Affects The Entire World's Coffee Supply Chain

AUDIE CORNISH, HOST:

If you're enjoying a cup of coffee, odds are that all or part of it - well, that it comes from Brazil. That country is the world's largest coffee producer, and the U.S. is its biggest client. Brazilian growers, however, are now suffering through the worst drought in nearly a century. NPR's Philip Reeves reports that worries Brazilians and Americans alike.

PHILIP REEVES, BYLINE: The commuters of downtown Rio de Janeiro arrive for work. Maria Pereira is sitting at a table on the sidewalk, selling coffee from a flask to passersby who need one last caffeine hit before clocking in.

MARIA PEREIRA: (Non-English language spoken).

REEVES: "Coffee's really popular," she says. It's how Brazilians kick-start their day.

UNIDENTIFIED PERSON #1: (Non-English language spoken).

UNIDENTIFIED PERSON #2: (Non-English language spoken).

REEVES: One block away, Luiz Otavio Araripe has already arrived in his fifth floor office.

LUIZ OTAVIO ARARIPE: By this time in the morning, I've already had six (laughter).

REEVES: Araripe has spent 40 years in the coffee business in a country that loves this stuff.

ARARIPE: Brazilians drink coffee all day long. Brazilian young people drink more coffee than the Americans. It is an addiction. It's a caffeine addiction.

REEVES: Araripe is a director of Valorizacao, a company that exports coffee worldwide. It ships arabica, Brazil's most widely grown bean used for top-quality coffee. The crop is being hit hard by the drought.

ARARIPE: It's very serious. Last year, we have had one of the lowest rainfall readings on the coffee-producing areas for the last 90 years.

REEVES: Many of the beans Araripe sells are from one huge Brazilian state that produces half the country's coffee.

ARARIPE: I like always to say that the biggest producer in the world is Brazil. The second biggest producer in the world is the state of Minas Gerais in Brazil.

REEVES: It takes seven hours to drive north from Rio across the mountains to Minas Gerais and into coffee country.

JOSE PINTO RIBEIRO: (Non-English language spoken).

REEVES: Jose Pinto Ribeiro has been growing coffee here since inheriting his grandfather's farm 38 years ago. He has 300 acres in the low hills outside the city of Varginha.

RIBEIRO: (Non-English language spoken).

REEVES: "There's been hardly any rain, and the rains are late," he says.

RIBEIRO: (Non-English language spoken).

REEVES: He shows us his rain gauge attached to a fence. It's empty. Ribeiro climbs into his pickup truck. There's something else he wants to show me. We bump along a dirt lane, leaving a trail of red-coloured dust and stop beside a big field full of coffee plants.

RIBEIRO: (Non-English language spoken).

REEVES: The leaves of all the plants are brown and shriveled.

RIBEIRO: (Non-English language spoken).

REEVES: A couple of months ago, this area was hit by the heaviest frost since 1994.

RIBEIRO: (Non-English language spoken).

REEVES: "The damage was huge," says Ribeiro. He says the frost is part of a new pattern of crazy weather, including hailstorms. He blames climate change.

Ribeiro is back in his pickup. There's one more thing to see. We drive a couple of miles...

RIBEIRO: (Non-English language spoken).

REEVES: ...To an area that used to be the shores of a huge lake. The lake was created in the 1960s when the government built a giant hydroelectric plant, the Furnas Dam. Before the drought, the lake was twice the size of Chicago. Now the water's vanished over the horizon.

OSVALDO HENRIQUE DE CASTRO PAIVA: (Non-English language spoken).

REEVES: "There was loads of water here," says Osvaldo Henrique de Castro Paiva, who has a fishing cabin here. People called it the Sea of Minas Gerais.

PAIVA: (Non-English language spoken).

REEVES: "There were cafes and condos, boats and jet skis," says Osvaldo, who's Ribeiro's cousin.

PAIVA: (Non-English language spoken).

REEVES: "Everyone's worried," says Osvaldo. If it doesn't rain soon, the water will run out completely.

RIBEIRO: (Non-English language spoken).

REEVES: Ribeiro's coffee harvest was devastated by the drought last year.

RIBEIRO: (Non-English language spoken).

REEVES: And now, he says, it's happening again. He says this year, the farm will make its first ever loss. Ribeiro's 62. His kids have jobs in the big city. He's wondering if it's time to retire, yet he's reluctant to quit because he says...

RIBEIRO: (Non-English language spoken).

REEVES: ...I love this farm.

ARARIPE: Coffee quality - it's a very long discussion.

REEVES: Back in his office in Rio de Janeiro, Luiz Araripe from the Valorizacao coffee company is making another cup and mulling what Brazil's drought means for business.

ARARIPE: We're going to have a very, very small arabica production this year, and we are going to have a very small production for the next crop year as well.

REEVES: That likely means we must all pay more for that morning fix. And if Brazil's drought doesn't end soon...

ARARIPE: Well, Houston, we have a problem. The world has a problem. It has a very, very big problem.

REEVES: A problem that goes well beyond coffee. Philip Reeves, NPR News, Rio de Janeiro. Transcript provided by NPR, Copyright NPR.