Price rises for arabica coffee lead farmers to the market in Brazil

Cepea, March 2, 2021 – Arabica coffee prices increased in the Brazilian market in February, leading sellers to the market and increasing liquidity. This increase was linked to the valuation of the futures for this variety, which were boosted by technical movements, perspectives for lower world production in the 2021 season (crop failure in Brazil and possible effects on the production of Central America and Vietnam) and expectations for an improvement in the economy this year, which may favor coffee consumption.


Thus, the CEPEA/ESALQ Index for arabica coffee (delivered to São Paulo city) closed at 746.50 BRL (133.76 USD) per 60-kilo bag on Feb. 26, 13.4% up in the month and the highest level, in nominal terms, in the series of Cepea, which began in 1996 for this product.


Agents consulted by Cepea reported that a considerable number of deals was closed on February 17, 18 and 22, in both the spot and the future markets, largely for higher-quality coffee. Sales were limited by the high amount of coffee already traded and by farmers’ expectations for higher prices this year because of the lower national output. Thus, in Brazil, liquidity increases only when quotes rise more sharply, scenario that should be observed in the coming months too, since farmers tend to sell coffee as they need cash flow.


ROBUSTA – Opposite to the scenario in the arabica market, the market of robusta coffee was calm in late February. Many collaborators were away from the market because of the high volume already sold.


On Feb. 26, the CEPEA/ESALQ Index for the type 6, screen 13, Espírito Santo State, closed at 455.22 BRL (81.57 USD)/bag, 7.78% up in the month.


CROPS – Sporadic rainfall was registered in many coffee-producing regions in Brazil (arabica and robusta) in February. For robusta, agents reported that crops are in good conditions in both Espírito Santo and Rondônia States.


As regards arabica, rainfall was not homogeneous in the producing regions, but the beans-filling stage is satisfactory in most crops. However, in some other crops, high temperatures and the lack of rains may have affected quality.


EXPORTS – Brazilian coffee exports have registered a good performance in the 2020/21 season. Despite uncertainties about the covid-19 pandemic, Brazilian shipments have been above 3 million bags for seven months in a row. This scenario is linked to the weak Brazilian currency against the US dollar (which makes international sales more interesting), the large 2020/21 harvest and to higher competitiveness of the Brazilian coffee.


According to data from Cecafé (Coffee Exporters Council), this season (from July 2020 to January 2021), Brazil has exported 27.8 million bags of coffee (green, roasted and soluble beans), for an increase of 17.3% in relation to that in the same period of the previous season (2019/20). In January 2021, specifically, Brazil shipped 3.1 million bags.


Revenue, in turn, has totaled 3.4 billion USD this season, 14.3% higher, in the same comparison, favored by both the volume and high dollar quotes – data from Cecafé.




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