With the 2021/22 coffee harvest season underway in Brazil, its Center for Advanced Studies on Applied Economics (Cepea) surveys found that, until 6 August, harvesting activities had only reached 70 to 80 per cent of expected output.
Due to the dry weather, and the lower volume of coffee to be harvested, the harvest progressed favourably from July onwards. Cepea states that harvesting this year was late compared to previous years due to later crop flowering in 2020, which consequently delayed the crop’s development.
As a high volume of crops has already been harvested, Cepea says that Brazilian coffee farmers have confirmed a crop failure for the 2021/22 season.
“Agents have reported harvests lower than the expected in some areas, besides lower-grade beans,” says Cepea. “On the other hand, this season has been marked by beans of higher quality beverage, favoured by the dry weather during the harvesting.”
On 13 August, the CEPEA/ESALQ index for Arabica coffee type six, which had been delivered to São Paulo city, closed at US$196.25 per 60-kilogram bag, up 1.4 per cent from 30 July. This price, says Cepea, is due to increased concerns about Brazil’s drought.
The 2021/22 Robusta coffee crop ended in Brazil in July. Despite the dry weather, sporadic flowering from the 2022/23 seasons were found in some crops across Espírito Santo and in Rondônia, favoured by irrigation.
In the spot market, some deals were closed in the first half of August, mainly for Robusta types seven and eight, or those of lower quality. This was due to recent valuations of this variety.
The increase in future contracts and dollar appreciation influenced prices, however, Cepea says its agents considered the liquidity low, due to the disinterest of farmers in selling the product.
“In general, Robusta farmers have made cash flow this season, due to the price rises from 2020 onwards and the lower productivity of crops in the 2021/22 season,” Cepea says.
“Now, many of them intend to sell the product only when in need of cash flow or when prices rise again, based on the lower supply of Arabica coffee.”
On 13 August, the CEPEA/ESALQ index for Robusta coffee type six, on screen 13 at Espírito Santo, closed at US$120.39 per bag. This was 8.7 per cent higher than that on 30 July.
For more information, visit www.cepea.esalq.usp.br/en/brazilian-agribusiness-news/brazilian-harvesting-of-arabica-coffee-reaches-70-80-of-expected-output.aspx
