With large flowerings, arabica coffee prices drop sharply in Brazil

Cepea, October 17 2019 – Arabica coffee prices dropped sharply in the first fortnight of October, in both the Brazilian and the international markets, due to high supply expectations, after large flowerings in relevant coffee-producing regions in Brazil.

 

Thus, between September 30 and October 15, the CEPEA/ESALQ Index for arabica coffee type 6 (delivered in São Paulo) dropped 23.55 Reais per 60-kilo bag (or 5.3%), closing at 414.94 BRL (99.79 USD) per bag on October 15.

 

According to agents consulted by Cepea, flowers have already been spotted in almost all the regions surveyed, except for Garça (SP), where rains in the last week of September were  not enough to induce a new flowering.

 

Besides, precipitation in the last days – which should favor flower settlement – pressed down quotes too. However, it is worth to mention that rainfall was enough only in the Cerrado Mineiro, Mogiana (SP) and in some areas from southern Minas Gerais.

 

ROBUSTA – Rains in late September also favored a new flowering in the robusta crops from Espírito Santo and Rondônia. Thus, flowers have been spotted in 90 – 100% of the crops in both states. In Rondônia, the last flowers should open only in November, due to the late varieties of some crops in that region.

 

With the return of rains, agents have reported that flower settlement is going well. On the other hand, favorable weather and new flowers in Brazil have pressed down international and domestic quotes this month.

 

Still, robusta price drops were not as steep as for arabica, largely due to the low supply in Vietnam – which constrained decreases for future contracts – as well as higher interest from Brazilian purchasers. Between September 30 and October 15, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, dropped 6.36 Reais per 60-kilo bag (or 2.1%), closing at 288.11 BRL (69.29 USD) per bag.

 

EXPORTS – The Brazilian exports of green coffee (arabica and robusta) decreased in September, according to data from Cecafé (Coffee Exporters Council). Shipments totaled 3.2 million 60-kilo bags last month, 3.8% down compared to that from August, but 2.6% up compared to that from September/18.

 

(Cepea-Brazil)

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