Cepea, September 3, 2020 – The harvesting of the 2020-21 crop of arabica coffee is ending in Brazil, and prices continue high in the domestic market. On August 31, the CEPEA/ESALQ Index delivered to São Paulo (SP) closed at 610.57 BRL (111.50 USD/bag) per 60-kilo bag, 8.7% higher than that on July 31 and a new nominal record in all Cepea series, which started in 1996. In real terms, however, the highest daily price was registered on May 28, 1997, when the Index closed at 1,720.65 BRL per bag (values were deflated by the IGP-DI from July/2020).
The boost for arabica prices came from the increases in the Futures of this variety and the dollar appreciation against Real
Although prices are still far from the real record in the series of Cepea, they are considered attractive, primarily because of the high volume being harvested in this year-crop, which counts on both positive biennial cycle and favorable weather to crops development. According to agents consulted by Cepea, besides the higher production, the quality of the beverage, the screen size and the aspect of the beans are considered satisfactory.
As the harvesting is ending, until the end of this semester, prices should be influenced primarily by the development of the 2021/22 crop and the weather in the coming months, as well as the scenario at ICE Futures, the currency exchange rate and the reopening of the economies around the world (which should influence coffee consumption).
ROBUSTA – In Espírito Santo State (ES), the weather has been favorable to robusta crops, with sporadic rains in August. Agents reported that a new flowering was induced in 55 – 75% of the crops late in the month. Moisture has been favoring flower settlement too. In Rondônia (RS), however, the weather continues dry, and rains are crucial for a larger flowering to occur.
In the Brazilian market, prices rose in August, also boosted by international valuations for this variety and the dollar appreciation. On August 31, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, closed at 407.32 BRL (74.38 USD) per 60-kilo bag, 11.9% higher than that on July 31.