Sunday 21 July 2024
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Brazil: weather favours harvesting and values drop in July

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Harvesting of the 2018/19 robusta crop is ending in Espírito Santo (ES) State, says Cepea in its latest report. Despite the delay this year, due to the rains observed in the first semester, from 80 to 90% of the beans had been harvested in ES until July 27. According to Cepea collaborators, activities in that state should end in early August.

Favorable weather during crops development allowed coffee trees to recover, leading to a large amount of higher quality and larger screen beans.

In Rondônia, where the crop ended in late June, rains have also improved robusta quality. Agents believe the more favorable weather this season will result in an output at around 15 million bags in Brazil, larger than that estimated by Conab (National Company for Food Supply), at 13.7 million 60-kilo bags.

Although activities are ending, the trading pace was slow in the Brazilian spot market in July. International price drops pressed down domestic robusta quotes, driving sellers away from the market and reducing liquidity in Brazil.

On July 31, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, closed at 319.25 BRL (85.04 USD) per bag, 5.3% down compared to that on June 29.

Arabica

The weather favored arabica harvesting in Brazil in July. In northwestern Paraná, where activities were the most advanced, from 90 to 95% of the total volume estimated for that region had been harvested until July 27. In the remaining arabica-producing areas, activities were advancing, but should last until late August.

In the Zona da Mata region, higher moisture hampered the harvesting, affecting quality, which is lower than in other arabica-producing areas, according to agents consulted by Cepea. In that scenario, harvesting was near 50% in that region by late July.

In the arabica spot market, many agents continued away from the spot market, hampering trades. Besides dollar oscillations, the recent drops of arabica futures pressed down quotes in Brazil, driving purchasers and sellers away from trades.

On July 31, the CEPEA/ESALQ arabica coffee Index (delivered in São Paulo) closed at 430.02 BRL (114.55 USD) per 60-kilo bag, 4.68% down compared to that on June 29.

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