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Photographer: Victor Moriyama/Bloomberg Photographer: Victor Moriyama/Bloomberg

Beaten-up coffee bulls are getting some relief from top producer Brazil where unfavorable weather is reining in crop forecasts and spurring talk of a bigger global deficit next season than previously thought.

Just a few months ago, forecasters were envisaging another record crop in Brazil and futures were trading around 13-year lows in New York. But a cold snap followed by drier-than-normal conditions mean supply is now set to decline and prices have rebounded 13% from lows in May.

“For next year, there were expectations of a giant harvest until two months go,” Joao Alberto Brando, a director at P&A, said at the Financial Times Commodities Americas Summit in Rio de Janeiro. “Today, this conviction is no longer there.”

Brazil produced almost 62 million bags in 2018 and earlier hopes of a whopping 70 million-bag haul next year have now faded. This season, government agency Conab expects farmers to collect 49 million bags, down from a previous 50.9 million call.

Parts of Minas Gerais and Sao Paulo states got as little as 50% of normal rainfall in the past month. That came after flowering in about 40% of plantings was hurt by subsequent dryness that probably caused the loss of about 20% of blooms in some parts, said Drew Lerner, president of World Weather Inc. in Overland Park, Kansas.

Steady showers in the next few days in most regions may trigger more flowering, before dry conditions return in the second half of the two-week forecast. Consistent moisture will be needed for the blooms to fix on the trees and later turn into cherries that contain the beans, he said.

“We need more than 50 millimeters (2 inches) of rain and that’s not in the forecast,” said Jose Marcos R. Magalhaes, president of Minasul, a major cooperative handling arabica beans in the state of Minas Gerais. “We are worried about that.”

The small flowering in August won’t be beneficial for the harvest as beans will reach maturity in a non-uniform time, Magalhaes said in an interview from the conference in Rio. On his own farm, he expects a smaller crop than in 2018 even though he has an additional 50 hectares (124 acres) of plantings.

Low prices are hurting many of Minasul’s members as about 30% of supply comes from plantations up in the mountains, where growers are struggling to cover costs. For others, the weaker real against the dollar is helping offset lower prices. Still, producers are holding back sales of next year’s harvest hoping for better days, Magalhaes said.

“While there is good rainfall levels expected this week, the following week we see a return of the dry weather in the key arabica areas,” Carlos Mera, an analyst for Rabobank International in London, said by email.

“Two weeks of dryness following the first rains is the worst case scenario” for potential yields as some blooms may be lost, Mera said.

Read More: As Coffee Gets Cheaper, Brazil Finds Ways to Grow More for Less

For 60-year-old farmer Dimas Silva, it’s been hard to guess how much he’ll reap in 2020, when his crop enters the higher-yielding half of a two-year cycle. His only certainty is that it will be lower than the 13,000 bags in 2018. Half his growing area in southern Minas Gerais is in decent shape. The other half has been hit hard by the heat and dryness.

“If the flowering I had so far was aborted, it won’t be a big issue, as it was tiny,” Silva said. “But the upcoming bloom, expected for this week, may be very strong and any harm for it may cause a big production drop.”

The unfavorable weather isn’t limited to Brazil.

Parts of central and southwestern Colombia, the second-ranked arabica supplier, got as little as 25% of normal rainfall in the month through Sept. 20, and steady precipitation forecast next week may not carry the intensity needed for stressed crops, World Weather’s Lerner said. Parts of Honduras and Nicaragua received as little as 25% of average rainfall in the past month, threatening late crop development.

Even after the recent rally, coffee prices are still more than 60% lower than a 2011 peak. The multiyear downturn has prompted growers to cut costs, including on inputs such as fertilizer, with Rabobank forecasting a global deficit of 4.1 million bags next year.

“The mega crop that was expected for 20/21 has now been compromised by frost, early flowering and lack of care,” Ernesto Alvarez, managing director at Miami-based Coex Coffee, said in an email. If Brazil’s output is less than 60 million bags next year that “could create a major supply problem,” he said.

A bag weighs 60 kilograms, or 132 pounds.

— With assistance by Luiza Ferraz