Cepea, August 18, 2020 – Although coffee prices mostly dropped in the first fortnight of August, arabica quotes are still high in the Brazilian market. This scenario is encouraging agents to trade higher volumes from the current crop (2020/21) in the domestic spot market. Cepea surveys show that more than 40% of the current crop had been traded until early August, more than the amounts marketed in previous years.
In the coming weeks, liquidity in the Brazilian market will depend on prices and the weather. As the harvesting is ending in most producing regions, coffee growers are attentive to the weather.
Between July 31 and August 14, the CEPEA/ESALQ Index delivered to São Paulo (SP) dropped by a slight 0.58%, closing at 558.14 BRL (102.79 USD) per 60-kilo bag on August 14.
ROBUSTA – Until August 14, a high volume of the robusta crop had been traded. Liquidity in the Brazilian spot market has been higher than that for arabica coffee since the beginning of the harvesting, primarily in Espírito Santo (ES). As prices started to increase in late July, the trading pace stepped up.
According to agents consulted by Cepea, from 45 to 50% of the crop has been sold in Espírito Santo. In Rondônia, from 70 to 80% of the 2020/21 crop has been sold.
While in Rondônia Cepea collaborators expect liquidity to be lower, based on the high volume already marketed, in Espírito Santo, growers may be more interested in closing deals in the spot market, since flowers started to open in that state. Although flowers are small, agents have reported that moisture is high and favorable in ES. In Rondônia, higher rains are still needed for more flowers to open.
In Brazil, robusta prices increased in the first fortnight of August, influenced by the scenario in the international market. The dollar appreciation against Real and concerns about coffee supply (after the new social distancing advice in Vietnam, because of the covid-19 pandemic) pushed up robusta Futures. The CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, closed at 386.33 BRL (71.15 USD) per bag on August 14, 6.1% higher than that on July 31.