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CEPEA: In 2016, robusta quotes surpass arabica prices for the first time

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The sharp price rise of robusta coffee, both in the domestic and the international markets, marked 2016. For the first time, robusta quotes surpassed arabica prices.

In the second fortnight of October, the CEPEA/ESALQ Index of robusta type 6, screen 13 above, was 13.17 BRL per bag higher than the CEPEA/ESALQ Index of arabica type 6, hard cup or better (delivered in São Paulo city).

The upward trend of robust prices, observed between March and November, was linked to low supply in the domestic market.

The 2016/17 robusta crop was damaged by dry weather in Espírito Santo and Rondônia States, reducing production by 25% compared to the previous crop, according to Conab (National Company for Food Supply).

In mid-August, the CEPEA/ESALQ Index of robusta surpassed 500 BRL per 60-kilo bag and reached real records almost every day, considering Cepea series, which started in 2001 – the highest value was observed in November 14, at 552.28 BRL per bag.

In the 2016/17 crop (from July/16 to December/16), the robusta Index averaged 461.88 BRL (141.36 USD) per bag, 32% up compared to the same period in the 2015/16 season.

According to Cepea collaborators, due to unfavorable weather, robusta quality was inferior to that in the 2015/16 crop. The lower Brazilian production in the 2016/17 season and estimates for the same scenario next crop concerned players regarding global robusta supply.

Arabica

Arabica prices oscillated in 2016, but the pace of trades was faster compared to robusta. The CEPEA/ESALQ Index of arabica type 6, hard cup or better (delivered in São Paulo city) went from 450.15 BRL per bag to 577.74 BRL per bag, a gap of almost 130 BRL per bag.

Until early November, irregular rains and lack of flowering events concerned players regarding the output in the next crop (2017/18), which will be a negative biennial cycle.

Between late November and early December, however, dollar increased and it rained again in most Brazilian producing regions, leading to expectations for a good crop.

This season (from July/16 to December/16), the CEPEA/ESALQ Index of arabica type 6, hard cup or better (delivered in São Paulo city), has been at 507.48 BRL (155.29 USD) per bag, 10% above that in the same period last season.

Exportations

This season (from July/16 to November/16), exportations of the Brazilian green coffee have totaled 12.8 million bags, 11.6% down compared to the volume exported in the same period of the previous crop (2015/16), according to data from Cecafé (Coffee Exporters Council).

Revenue was 2.145 billion USD, 4.5% below that in the same period last crop.

Considering only the arabica volume, exportations dropped by only 0.2%, while the amount of robusta decreased more sharply, from 1.4 million bags in 2015 to 148 thousand bags in 2016.