Cepea, May 20, 2020 – The harvesting pace for the 2020/21 robusta coffee crop was fast in Brazil in the first fortnight of May. In Rondônia, where activities were faster, Cepea collaborators reported that the amount harvested had reached from 40 to 50% of the total estimated for the state. In Espírito Santo, the harvesting was beginning, and around 10% of the output had been harvested until the end of the fortnight.
In Espírito Santo, activities should step up in the coming days, once the beans are more ripened. It is worth to mention that the few batches with the new coffee that arrived at the market in the first half of May had higher quality than those from previous weeks.
Although robusta harvesting is advancing in Brazil, prices increased in the first fortnight of the month. On May 15, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, closed at 359.54 BRL (62.92 USD) per 60-kilo bag, 7.9% up compared to that on April 30 and the highest real level since November 2018 (values were deflated by the IGP-DI from April/2020). The current price levels are also much higher than those registered during last season’s harvesting.
This scenario, in turn, may be explained by a combination of factors: dollar at record levels (nominal), higher international prices and a slight demand increase. Besides, according to agents, while the volume of coffee remaining is low, batches with the new coffee are slowly arriving at the market. Sellers left the market early in the crop, and part of the new coffee had been previously sold through contracts.
As regards purchasers, agents reported some concerns about delivery in May and in the coming months, since prices in the spot market are higher than those previously fixed. This scenario, in turn, contributed to increase the sporadic demand for the new coffee, helping to drive growers away from the market – these agents expect prices to rise more sharply. Still, Cepea collaborators believe that robusta prices may drop in the coming weeks, as the harvesting steps up in Espírito Santo.
ARABICA COFFEE – Growers continue focused on the 2020/21 crop. In the first fortnight of May, activities started to step up in northwestern Paraná and Zona da Mata (MG), but the volume harvested was still low, ranging from 10 to 15% in PR and lower than 5% in MG. In the remaining areas, coffee growers were still focused on hand-picking, and the volume harvested was low.
Arabica coffee prices increased in the first half of the month, boosted by the valuations of arabica futures and the dollar appreciation. Besides, many growers were away from the market, focused on the harvesting, which also pushed up prices in Brazil.
On May 15, the CEPEA/ESALQ Index for the arabica coffee type 6 (delivered in São Paulo) closed at 586.52 BRL (102.65 USD)/60-kilo bag, 3.6% up compared to that on April 30. The dollar closed at 5.832 BRL, 7% up in the same comparison.
CORONAVIRUS – As the harvesting is advancing in Brazil, coffee growers have been attentive to the effects of the coronavirus pandemic on the activity. So far, most Cepea collaborators have not reported any problems with labor availability, but with adapting farms and workers transportation, due to the social distancing advice in all states. In São Paulo and the Cerrado Mineiro, which count mostly on mechanized harvesting, difficulties are low.