The lower temperatures in the Southeast of Brazil raised international coffee prices at the New York Board of Trade (Nybot) during July. On Tuesday, July 24, speculations about the possibility of frosts boosted the contract September/07 for 115.75 cents of dollar per pound, the highest level reached in the month.
Even with the international raises, the domestic prices did not up and trades kept moving slowly. The CEPEA/ESALQ Index for arabica type 6, delivered in Sao Paulo (capital) averaged 240.48 reals or 127.78 dollars per bag of 60 kilos on Tuesday, July 31st, stable in Real and up 2.4 percent in dollar over June 29th. For robusta type 6, in the origin Espírito Santo state, the Index closed at 199.80 reals or 106.16 dollars per bag on Jul 31st, decrease 2 percent in Real and up 0.5 percent in dollar during the same period.
Even with robusta decreases, the scenario for this variety has been keeping positive during this year. The robusta has been more profitable to growers than the arabica. According to the National Company for Food Supply (Conab), the cost of robusta production is of 139.79 reals per bag in the Espírito Santo state and the current values are around at 200.00 reals per bag. For arabica, the cost of production is at 218 reals per bag and the current prices, at 235.00 reals per bag.
Another positive aspect for the coffee market is that the Brazilian consumption should overcome the initial forecasts for this year. According to the Brazilian Coffee Industry Association (Abic), in the last 12 months (June/06 to June/07), the Brazilian coffee consumption totaled around 17 million bags. In this context, the annual consumption should overtake the 17.4 million bags estimated for this year.