Tuesday 18 June 2024
  • La Cimbali

Domestic price for arabica coffee in Brazil is at its lowest since April 2021

In the same period last year, arabica prices were around BRL 1,300/bag, due to weather issues in that period – such as frosts and low rainfall –, mainly in the 2021/22 and the 2022/23 seasons, which limited the harvest. On the other hand, this year, despite the negative biennial cycle, the output has recovered, contributing to press down prices

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SAO PAULO, Brazil – According to the latest report from CEPEA, the domestic price for arabica coffee (CEPEA/ESALQ Index for the arabica coffee type 6, delivered to São Paulo city) has dropped to the lowest real level since April 13th, 2021 (values were deflated by the IGP-DI from Aug/23), closing at BRL 779.90 (USD 155.08) per 60-kg bag on September 29th.

In the same period last year, arabica prices were around BRL 1,300/bag, due to weather issues in that period – such as frosts and low rainfall –, mainly in the 2021/22 and the 2022/23 seasons, which limited the harvest. On the other hand, this year, despite the negative biennial cycle, the output has recovered, contributing to press down prices.

On Sept. 20th, Conab (Brazil’s National Company for Food Supply) released a report on the Brazilian coffee production.

The output in the 2023/24 season is estimated to be 6.8% higher than that last season – in the report from May, Conab had estimated this increase to be 7.5%.

It is important to highlight that higher production is directly linked to the recovery of arabica production (+16.6% between the two seasons), majorly in Minas Gerais. On the other hand, for robusta, there was a crop failure, mainly in Espírito Santo State (-10.8%).

The agents consulted by Cepea have confirmed these scenarios for both varieties. For arabica, it has been reported that the recovery was significant, while for robusta, the crop failure is believed to be linked to strong winds and lack of rains.

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Besides the concerns because of the recent coffee devaluation, agents have also been worried about the effects of the hot weather on the 2024/25 crops, since temperatures surpassed 40ºC in some Brazilian regions in the second half of September, which may have damaged crops and limit production.

The CEPEA/ESALQ Index price for the arabica coffee type 6, delivered to São Paulo city, dropped 4.5% between August 31st and September 29th.

For robusta coffee, the CEPEA/ESALQ Index (Espírito Santo) for the type 6, screen 13, closed at BRL 645.34 (USD 128.32)/bag on September 29th, 1.5% down, in the same comparison.

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