Since October 20, the CEPEA/ESALQ Index of robusta type 6, screen 13 above, has been higher than the CEPEA/ESALQ Index of arabica type 6, hard cup or better (delivered in São Paulo city), a scenario that had never been observed during all Cepea series, which started in 2001 for this product.
On October 31, the robusta Index was 3.63 BRL per 60-kilo bag higher than the arabica Index.
The upward trend of robusta quotes has been observed since mid-March. This is attributed to low supply of coffee beans, especially type 6.
Reduced supply, in turn, is linked to unfavorable weather in the robusta producing regions in Brazil in the last two years.
Dry weather has damaged grain development, resulting in significant crop failures. In the current 2016/17 season, Conab (National Company for Food Supply) estimates the production to reach 8 million bags, a staggering 25.3% drop compared to the previous crop.
Another factor that has been pushing up robusta prices in Brazil is the speculation regarding the next 2017/18 crop.
The dry weather in EspÃrito Santo and Rondônia has still not favored the development of the next production.
According to Cepea collaborators, the development of robusta coffee is likely to be delayed in Brazil. In this scenario, growers already expect rains to recover coffee trees for the 2018/19 season.
The CEPEA/ESALQ Index of robusta type 6, screen 13 (EspÃrito Santo), closed at 538.93 BRL (169.21 USD) per 60-kilo bag on October 31, 17.25% up in the month.
Regarding arabica, flowering events observed in the second fortnight of October were firm on coffee trees.
Despite the high temperatures, small volumes of rains were observed in October, which helped flower settlement.
The 2017/18 arabica season, however, may have a lower production, mainly due to the negative biennial cycle in Brazil.
On October 31, the CEPEA/ESALQ Index, type 6, hard cup or better (delivered in São Paulo city), closed at 535.30 BRL (168.07 USD) per 60-kilo bag, 6.41% up compared to September 30.
