With the 2021/22 Arabica coffee harvest season coming to an end, as of 27 August, Brazil’s Center for Advanced Studies in Applied Economics (CEPEA) says between 85 to 95 per cent of total production was achieved.
Despite the progress of harvesting, prices for Arabica coffee resumed rising in late August. Between 30 July and 31 August, the CEPEA and Department of Economics, Administration and Sociology of the Superior School of Agriculture (ESALQ) Index for Arabica coffee type six, which had been delivered to São Paulo city, increased by US$13.44 per bag, marking a 6.9 per cent increase.
On 31 August, the prices for Arabica coffee closed at US$208.75 per bag.
CEPEA says the increased value of Arabica coffee is largely linked to the increase in overseas future contracts and due to the disinterest of Brazilian sellers.
The institute says that in the international market, prices were boosted due to technical factors, with dollar depreciation occurring. It is predicted that there will be a lower supply of Arabica for the short and mid-term in Brazil.
Prices for Robusta coffee increased higher than Arabica across the month of August. Between 30 July and 31 August, the CEPEA/ESALQ Index for the Robusta type 6, on-screen 13 at Espírito Santo, increased by US$21.27 per bag, marking a 19 per cent increase.
On 31 August, the prices for Robusta coffee closed at US$133.05 per bag.
Besides the volume of coffee below the expected 2021/22 season harvest, Brazil’s recent frosts and drought in the oncoming season are causing concerns. CEPEA says these weather-related concerns have kept farmers away from the market with smaller volumes being traded.
Valuations of Robusta coffee within the Brazilian market has pushed up international coffee prices. With Arabica coffee in lower supply, CEPEA says coffee roasters across the globe are increasing the volume of the Robusta coffee in blends, which in turn is boosting its value.
CEPEA says agents are worried about Brazil’s dry weather with some leaves falling off the coffee trees. This may lead to flower drops in Espírito Santo and in Rondônia, however, damages on the 2022/23 crop have not been assessed yet, since flowering has been small.
For more information, visit www.cepea.esalq.usp.br/en
