So far, the government has pegged damage in Parana state at between 80 and 90 percent for the forthcoming 2001/02 (July/June) crop and the current crop by 15 to 20 percent. "With the first and second frost...80 to 90 percent of the coffee fields were affected," said leading Santos exporters and traders Comexim. Coffee farms in northern Parana were hit by dawn frost on July 13 and 17.

"But this does not mean that the same percentage of damage to the next harvest is the same. We believe that the potential loss for next year in the state of Parana is about 50 to 70 percent," it said in a report to clients on the frost damage.

Parana grows some eight percent of Brazil's coffee and its northern region, where coffee is planted, has borne the brunt of the waves of cold winter air - mostly arriving from Argentina - which have recently pummeled the growing belt. Comexim estimated potential production losses of between 10 to 15 percent for the 2001/02 crop in Minas Gerais, Brazil's top producing state which grows close to half the national crop - the world's largest. Sao Paulo state might see a potential crop loss of some 10 percent, it said. "If we presume that with the pre-frost potential for next year was for Parana at 3.0 million (60-kg bags), Sao Paulo at 4.5 (million) and south Minas at 12 million bags...we may have lost between 4 to 4.5 million bags already," Comexim said. These initial estimates were based on a 2001/02 crop potential of some 40 million bags, it added. Brazil provides close to a third of world coffee supply. The government has yet to issue any crop loss figures for Minas Gerais or Sao Paulo.

According to the only official estimate for the 2000/01 (July/June) crop, Brazil should produce 28.90 million bags, against the 27.17 million bags produced the previous year.

Earlier Friday, the Association of Cerrado Coffee Growers (Caccer) said its region may have lost almost a third of its 2001/02 crop due to frost damage.

The Cerrado region is located in the western portion of Minas Gerais and grows around 18 percent of the Minas crop. It is famed for its top-quality arabica beans.

The recent frost damage, as evaulated so far, only appeared to have damaged the final quality of some 10 percent of maturing beans in the current 2000/01 crop, Caccer said. "For the current crop, the damage is restricted to the quality of the product...a percentage of green beans that, damaged by the intense cold, will certainly harm the final quality of the coffee in these areas," said Caccer agronomist Adeemar Batista Penaforte. He added that around half of the 20,000 hectares planted with new coffee trees during 1999 and 2000 would have to be planted for the next crop, adding that recent lack of rains would also be another negative factor for future production. "We cannot forget the drought which is ravaging the whole region, we have already been without any rain for more than 100 days, which is making the situation worse and leaving the region's coffee growers totally alarmed and worried," he said. Batista also works for Procafe, a coffee research agency linked to the Agriculture Ministry.

However, most agronomists say quantification of the damage wreaked by the frosts of the last week to Brazil's major coffee areas will take some weeks as field analysts slowly assess losses for the current and next crops.

Brazil's coffee areas last saw a serious frost back in 1994 when two crisp nights combined with a drought sent world prices rocketing. Even talk of cold winter weather in Brazil is normally enough to ignite international market prices.

-- (Reuters)