Arabica coffee price of the current Brazilian crop (2007/08) is already getting close to the values from the end of the previous season. Normally, at the beginning of harvest activities, the new coffees cost less, since there is no grain uniformity.
Since last year, the weather conditions have been helped the coffee crop production, resulting in a better quality of the grain. Even with this positive scenario, it is important to remember that the Brazilian production should be lower this year, due to the biannual cycle of the coffee.
In general terms, harvest activities keep in a normal way, but the supply is still low. Growers keep focused on the Equalization Premium Paid to the Producer (Pepro). The first Pepro auction, happened last Wednesday, June 27th, traded all 4 million bags offered. Growers and cooperatives that participated, with until 300 bags, must sell the product at more than 260.00 reals per bag until June of 2008 to get a premium of 39.99 reals per bag. This value (260.00 reals per bag) could be very possible, since the coffee supply is restrict in this season (2007/08).
Last Friday, June 29th, the CEPEA/ESALQ Index for arabica type 6, delivered in São Paulo (capital) closed at 240.86 reals or 124.80 dollars per bag of 60 kilos, up around 2 percent in Real and in dollar during the month.
Regarding the robusta crop, at least 70 percent of the production in Espírito Santo state, main producer of this variety in Brazil, was already harvested. The CEPEA/ESALQ Index for the type 6, in the origin Espírito Santo state averaged 203.91 reals or 105.65 dollars per bag of 60 kilos, up almost 6 percent in Real and in dollar over May 31st.