Friday 24 June 2022

Cepea Index for Arabica coffee sets a new nominal record in Brazil boosted by high valuations at ICE Futures in New York

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SAO PAULO, Brazil – Arabica coffee prices increased in Brazil in the first fortnight of February, surpassing BRL 1,500.00 per 60-kilo bag, says Cepea in its latest report. The boost came from the high valuations at ICE Futures (NY).

On Feb. 9, the CEPEA/ESALQ Index for arabica coffee type 6, delivered to São Paulo city, closed at BRL 1,555.19 (USD 297.93)/bag, the new record in the series of Cepea, which began in 1996 for this product.

In Real terms, this is the highest level since December 1999 (values were deflated by the IGP-DI from Jan/22). Valuations drove sellers to the Brazilian market, favoring sales of higher volumes.

Abroad, the March/22 future rose by 1,670 points (+6.9%) at ICE Futures between Monday (7) and Wednesday (9), when it closed at 258.35 cents of dollar per pound, the highest since September/11.

Arabica price rises are still linked to concerns about the world supply in 2022

However, from Feb. 10 onwards, the futures resumed dropping, weakening arabica prices in Brazil. In this context, sellers left the market. On Feb. 15, the CEPEA/ESALQ Index for arabica coffee type 6, delivered to São Paulo city, closed at BRL 1,499.37 (USD 289.40)/bag, 1.7% up from that on Jan. 31.

Robusta

Robusta coffee prices followed the same trend observed for arabica coffee until Feb. 9, resuming to fade from Feb. 10 onwards. However, domestic liquidity did not increase when prices rose, since most sellers were away from the market. Agents consulted by Cepea believe that farmers will only sell higher volumes of robusta coffee when the harvesting of the 2022/23 crop begins, aiming to make cash flow to pay the activity.

On Feb. 15, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo, closed at BRL 823.87 (USD 159.02)/bag, 0.5% up from that on Jan. 31.

Exports

Brazilian coffee exports decreased in January. According to data from Cecafé, Brazil shipped 3.2 million bags of coffee (green beans, roasted and soluble) last month, 16.5% less than that exported in December/21. Compared to that in Jan/21, exports in Jan/22 were 11.8% lower. Exports decrease is still a reflex of both logistic issues and the smaller harvest in 2021/22. International sales are expected to continue low until the arrival of the beans from the 2022/23 season.

SourceCEPEA

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