Lack of rain concerns the sector

At the moment, the main concern of the Brazilian sector is the lack of rain, since it is blooming period for the next arabica crop (2007/08) and it is important a good volume of rain. In the next days, however, the weather should keep dry. This context also boosted futures in the international market.

The CEPEA/ESALQ Index for arabica type 6, delivered in Sao Paulo (capital), averaged 253.01 reals or 133.09 dollars per bag of 60 kilos on Friday, Sept 14th, upping 0.4 percent in Real over Aug 31st. This price is inferior to the minimum necessary for traders to get the premium offered by the Brazilian government in the Equalization Premium Paid to the Producer (Pepro) auctions: 260 reals per bag. In this context, some sellers have retreated, waiting for higher values.

For robusta, futures also moved up due to possible restrict supply in Vietnam for the next season (2007/08). The Vietnam Coffee Association forecast the production at 15 million bags of robusta, 3.2 percent lower than that of the previous crop.

In Brazil, the rains helped robusta fields in the Espírito Santo state, main producer state of this variety. Even with the humid weather, there is no more possibility of appearing significant blooming, since the typical blooming period was in August - and it was noted good blooming that time, according to local growers. The next robusta crop production should be similar to the 2007/08 season: great in terms of quality and quantity. The CEPEA/ESALQ Index for the robusta type 6, in the origin Espírito Santo state, closed at 205.64 reals or 108.17 dollars per bag of 60 kilos, upping 2.05 percent in Real over Aug 31st.


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