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Rains may hamper the harvesting and lower quality of the 2020-21 crop in Brazil

Cepea coffee output

SAO PAULO, Brazil – The harvesting pace for the 20-21 arabica coffee crop in Brazil had been satisfactory until the end of June. According to Cepea survey, nearly 50% of the total expected for northwestern Paraná had been harvested by June 30, and in Garça (SP), from 30 to 40%. In southern Minas Gerais and in the Zona da Mata Mineira, the volume harvested ranged from 25 to 35%, and in the Cerrado Mineiro and the Mogiana (SP), activities had reached from 20 to 30%.

Despite the high volume already harvested, the cold front that hit the producing regions late in the month concerned coffee growers. Rains hit coffee drying yards, which may lower beans quality and delay the harvesting in Brazil in early July. Agents have been alert, since higher moisture is forecast for the first week of July.

Coffee harvesting in Brazil

Besides the weather, agents have also been concerned about possible labor issues. As the harvesting advanced, sporadic complaints about a lack of workers were reported in June, primarily due to the increase in the number of covid-19 cases in the coffee-producing regions and, consequently, more severe social distancing advice and inspection.

Robusta

Although it rained in Espírito Santo State too, agents believe the robusta harvesting will not come to a halt – activities pace only slowed down. Until the end of June, from 60 to 70% of the total expected for the state had been harvested. In Rondônia, however, the weather was favoring the harvesting, which was ending in late June. Until June 26, from 90 to 95% of the total expected had been harvested.

Brazilian market

Prices for arabica and robusta coffee increased in the Brazilian market in the second fortnight of June, boosted by the dollar appreciation against Real and the retraction of many sellers from trades. Still, with higher prices, some deals were closed, primarily for robusta coffee.

Moreover, international valuations for arabica and robusta coffee, which, in turn, were linked to concerns about the weather in Brazil, influenced domestic prices too. However, considering the whole month, arabica prices dropped – in the first half of June, pressure came from the harvesting and the dollar depreciation against Real.

Thus, on June 30, the CEPEA/ESALQ Index delivered to São Paulo (SP) closed at 507.79 BRL/bag (93.34 USD/bag), 1.07% down compared to that on May 29. On the other hand, for robusta, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo State, rose by 2.2%, closing at 352.57 BRL/bag (64.81 USD/bag) on June 30.