Cepea, August 20 2019 – The firm weather in Brazil in the last week favored the harvesting of the 2019/20 arabica crop, which is expected to end in the first fortnight of August in most planted areas, with only some crops left to be harvested later in the month.
It is worth to mention that activities are more advanced than they were in the same period last crop (2018/19). On the other hand, while the quality of the beans was higher last season, it is lower in the current one (2019/20).
In the Brazilian regions surveyed by Cepea, most coffee batches have lower quality brew, and many beans have dropped, due to the rains during the harvesting, which hit the beans on coffee drying yards and knocked down part of the beans still on tree. Smaller coffee screen and lower yield have also been reported this season. Concerning coffee berry borer, it has been a problem, largely in the Zona da Mata area, where the disease has attacked many coffee batches.
As fieldwork is ending in Brazil, agents from the coffee market are focused on the flowerings from the 2020/21 crop. Some occasional flowers were spotted in many regions in July, due to the small rain volume in that month. However, it rained in São Paulo and in some areas from southern MG in early August, which, added to the higher temperatures observed in the second week of themonth, may favor new flowerings.
ROBUSTA – The weather is favoring robusta coffee crops in Espírito Santo State. Rains are positive to crops conditions and flower settlement in the 2020/21 crop – which opened in July, accounting for around 30% of the robusta crops in that state. Besides, precipitation may favor a new flowering in Espírito Santo.
In Rondônia, the weather is firmer, not favoring a new flowering. According to agents, with the higher temperatures observed in that state, the few flowers that opened in irrigated crops were burned.
EXPORTS – Brazilian coffee exports have been at a fast pace in the 2019/20 year-crop. In July, green coffee shipments (considering arabica and robusta) totaled 3.16 million bags, according to Cecafé (Coffee Exporters Council), 2.8% higher than in June. Compared to July/18, exports increased 28.2%. Still according to Cecafé, shipments in July/19 were the highest for the month in five years.
BRAZILIAN MARKET – Many purchasers and sellers have been away from the market, keeping liquidity low in Brazil. Prices in the spot market are not appealing to these agents, leading many sellers to focus on scheduled deliveries – these agents should return to the market more actively between late August and September. Besides the end of scheduled deliveries, farmers may need to make cash flow, due to the expenses with fertilization and other crop management conducted before and after flowering. Concerning demand, purchasers may become more active in the market now, due to expectations for lower temperatures in the northern hemisphere.
In the first fortnight of August (1 – 15), the CEPEA/ESALQ Index for arabica coffee type 6 (delivered in São Paulo) increased 1.6%, closing at 409.13 BRL (102.46 USD) per 60-kilo bag on August 15. As for robusta, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, closed at 283.39 BRL/bag (70.97 USD) on August 15, 3.1% up in the same comparison.