BRAZIL – Robusta and arabica prices are distinct, says CEPEA

Prices of coffee varieties planted in Brazil start 2015 with distinct behaviors. While robusta coffee quotes rose 6% in January due to high temperatures and the lack of rains in Espírito Santo State, arabica prices dropped 1.92% in the same period with the return of rains, yet irregular, in Minas Gerais.

In common, both arabica and robusta coffee markets have registered low liquidity and producers are expecting higher values.

The CEPEA/ESALQ Index for the arabica coffee type 6 (delivered in São Paulo) closed at 445.43 BRL per 60-kilo bag on January 30 and a monthly average of 465.92 BRL per bag, an increase of 2.36% in relation to December/14.

The average was affected by high quotes observed in the first 20 days of the month – on January 12, the Index reached 499.31 BRL per bag.

Due to great price fluctuations, only sellers who need to make cash flow are operating in the market. In general terms, liquidity in the spot market is low, and the gap between asking and bidding prices is wide.

As for robusta, the CEPEA/ESALQ Index (Espírito Santo State) for the type 6 wrapped up January at 288.97 BRL per 60-kilo bag, and a monthly average of 283.28 BRL per bag, 2.84% higher than in December 2014.

In the robusta market, weather concerns have led sellers to be refrained, limiting trades. Prices might increase again if weather conditions remain as it is currently observed in the next weeks and if the crop failure is confirmed.

Players surveyed by Cepea say that the scenario is concerning. In some regions of Espírito Santo, the irrigation is restricted because of low water levels.

For the upcoming weeks, the weather might continue to drive quotes of both arabica and robusta. There are forecasts of rains in Minas Gerais and Espírito Santo.

The humidity is very important for the grain filling in both varieties. In January, the volume of rains was below the historical average for the period in almost all producing regions. (Cepea-Brazil).