Cold weather and Conab forecast support values

The lower temperatures in Brazil and the forecast for the national 2008/09 coffee crop supported prices in the international market. At the New York Board of Trade (ICE Futures), arabica contracts that expire in July closed at 136.80 cents of dollar per pound on Thursday, May 15th, increasing 1 percent over April 30th. From now on, agents turn their attentions to the possibility of frosts.

Regarding to the forecast released by the National Company for Food Supply (Conab) on May 8th, the volume increased 6 percent compared to the projection of January, totaling 45.54 million bags of 60 kilos. Agents, however, expected a production of around 50 million bags.

Based on the current Conab data, this crop should be 35 percent higher in relation to the previous one (2007/08), due to the biannual cycle of the culture. In this context, the Brazilian production should be enough to supply the domestic and international demands. Concerning inventories, however, the volume should not increase so much, since the Brazilian consumption is forecast to raise 1 million bags, totaling 18.5 million bags - Brazilian Coffee Industry Association (Abic in Portuguese). About exports, the volume is estimated to keep between 27 and 28 million bags, according to the Brazilian Coffee Exporter Council (Cecafé in Portuguese).

Trades kept moving at a slow pace during the first fortnight of May. The CEPEA/ESALQ Index for the arabica type 6, delivered in Sao Paulo (capital) closed at 258.47 reals or 155.70 dollars per bag of 60 kilos on May 15th, increasing 1.26 percent in Real over Apr 30th. For the robusta type 6, in the origin Espírito Santo state, on the other hand, there was a decrease of 1.15 percent in Real during the same period, at 210.66 reals or 126.90 dollars per bag. (Cepea - Brazil)

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