Tariff relief, price oscillations mark November, says CEPEA fortnightly analysis

PIRACICABA, SP, Brazil– Arabica and Robusta coffee prices continued to show significant volatility in November, remaining close to October levels, reports CEPEA in its fortnightly analysis. Throughout the month, the market reacted to expectations surrounding the removal of coffee from the list of Brazilian products subject to additional U.S. tariffs and, after Nov. 20, the effective elimination of the additional 40% tariff. Weather conditions in Brazil and Vietnam also influenced prices.

In November, the CEPEA/ESALQ Index for the Arabica coffee type 6, delivered to São Paulo city, averaged BRL 2,245.16 per 60-kg bag, only 0.5% above that in October. Over the month, the Index oscillated between BRL 2,100 and BRL 2,300 per 60-kg bag, similar to the range observed in October.

For robusta, the CEPEA/ESALQ Index for the type 6, screen 13, Espírito Santo, averaged BRL 1,384.46 per 60-kg bag in November, up 1% from October. Minimum and maximum quotations were BRL 1,300 and BRL 1,400 per 60-kg bag, also close to those of the previous month.

In the first half of November, the Brazilian sector welcomed the removal of the 10% tariff applied in April to coffee imports into the United States, while monitoring the possible elimination of the additional 40% tariff. That tariff had reduced the competitiveness of Brazilian coffee in the U.S. market, historically the top destination for the national product.

The removal of the additional tariff on Nov. 20 brought optimism to the sector, which now expects higher shipments to the U.S. in December and, at least during the first six months of the season, export volumes similar to those sent to Germany.

Regarding weather, in Vietnam, heavy rains, floods, and typhoons have interrupted crop activities and may reduce yields. In Brazil, rainfall has been better than in recent seasons, and temperatures remain milder in most producing areas.