SAO PAULO – Arabica coffee prices have been in a downward trend since April this year, but price drops were more significant in June, a scenario that concerns Brazilian players, reports CEPEA in its latest analysis.
In June, the CEPEA/ESALQ Index for arabica coffee type 6, delivered to São Paulo city, decreased 16.7%, closing at BRL 825.59 (USD 172.25)/bag on June 30, the lowest nominal daily level since July 2021.
In general, trades have been moving at a slow pace since the beginning of this year, and liquidity increases slightly in days when prices move up and/or when producers have the need to make cash flow, in order to cover costs of the 2023/24 season.
In June, price drops were related to the supply of the new season, because the weather has been favoring the harvest. Moreover, many purchasers are away from the spot market in Brazil, which reinforces price decreases.
Thus, the moment for sellers is concerning, since a small volume of coffee has been traded in advance (for future delivery) and most of the production may be traded in the spot market. Another concern is that the crop treatment was very high this season, which can limit the profitability.
