SAO PAULO, Brasil – Prices of Robusta coffee dropped in the second fortnight of January in Brazil, despite low supply. Pressure came because purchasers (processors and exporters) were out of the Brazilian market.
According to Cepea collaborators, with robusta prices at high levels, many purchasers were searching for lower-quality arabica coffee. On January 31, the CEPEA/ESALQ Index of robusta type 6, screen 13, closed at 474.08 BRL (150.64 USD) per 60-kilo bag, 3.86% down compared to December 29.
On the other hand, prices of lower-quality arabica coffee, such as type 7 (rio beverage), increased in the domestic market, due to firm demand from coffee roasters – since arabica quotes had been more competitive compared to robusta.
According to Cepea collaborators, there still is a large supply of arabica available for trading until the beginning of next season (2017/18). Robusta supply, however, was low in January and growers were unwilling to sell those batches.
The sector expects robusta prices to react, since it is a negative biennial cycle.
Regarding processors, agents indicate that new trades were limited, since these purchasers were attentive to the possibility of Mapa (The Ministry of Agriculture, Livestock and Supply) to allow importation of coffee this year.
Arabica
Arabica coffee trades were limited in Brazil in January, since purchasers were focused on fine cup coffee.
Sellers, in turn, were trading fine cup arabica only at higher price levels than what purchasers were willing to pay.
The CEPEA/ESALQ Index of arabica type 6, hard cup or better (delivered in São Paulo city), closed at 519.75 BRL (165.16 USD) per 60-kilo bag on January 31, 7.02% up compared to December 29.
Exportations
Brazil’s shipments have amounted 15.7 million 60-kilo bags (green beans) this season (July-December 2016), 10% below that in the same period of 2015 – Cecafé (Coffee Exporters Council) data.
2017/18 Season
In January, Conab (National Company for Food Supply) released a report indicating that the 2017/18 coffee crop in Brazil might produce between 43.65 and 47.51 million 60-kilo bags of coffee (arábica and robusta), for a whopping decrease between 7.5% and 15% comparing to the 2016/17 season.
