Tuesday 16 April 2024
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Robusta prices drop in Brazil as a large 2018/19 crop approaches

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DESCAMEX COFFELOVERS 2024
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Prices of Robusta coffee are dropping in the Brazilian market, reports Cepea – Center for Advanced Studies on Applied Economics.

This month (until March 15), the CEPEA/ESALQ Index of the Robusta type 6, screen 13, Espírito Santo State, has averaged 306.72 BRL (94.26 USD) per 60-kilo bag, 3.9% down compared to that in February (319.13 BRL per bag) and 31.2% lower than that in March/17 (when the real average was 445.98 BRL per bag).

DVG De Vecchi

Price drops are mainly attributed to the nearness of the 2018/19 crop harvesting, which should begin in late March in Rondônia, the second main Robusta-producing state in Brazil.

Cepea is the economic research center at Esalq (“Luiz de Queiroz” College of Agriculture), USP (University of São Paulo), in

La Cimbali

The average production in the next season should be positive. The weather in 2017 and in 2018 favored the development of coffee crops, in both Rondônia and Espírito Santo, the main Robusta-producing state in Brazil, and a large and high-quality output is expected in the coming months – which was not observed in the last three Robusta crops.

In January/18, Conab (National Company for Food Supply) estimated Robusta harvesting to reach between 12.6 and 13.9 million bags in Brazil in the 2018/19 season, 18% to 30% larger than that in the 2017/18 crop.

So far, the 2017/18 crop supply has been satisfactory. In Rondônia, less than 5% of the coffee from the current season is available for trading, and in Espírito Santo, 20%, according to Cepea collaborators.

This scenario, added to the nearness of the new season (2018/19), is keeping purchasers away from the market, pressing down domestic quotes. Although some trades were closed in the first fortnight of March, since Brazilian roasters already have low inventories, agents should purchase larger volumes only after the harvesting starts.

The CEPEA/ESALQ Index of the Robusta type 6, screen 13, Espírito Santo State, closed at 301.40 BRL (91.58 USD) per 60-kilo bag on March 15, 4.2% down compared to that on February 28.

Arabica

The pace of Arabica trades has been even slower than that of Robusta trades, since many purchasers should only acquire large amounts of that variety when the 2018/19 crop begins. With the current price levels, farmers drove away from the market, holding their product on farms and cooperatives.

In southern Minas Gerais, the largest Arabica-producing region in Brazil, agents forecast 25% – 30% of the 2017/18 crop is left to be traded, while in the same period last year, farmers and cooperatives had a little more than 20%. In the remaining regions, in general, the volume of coffee concentrated with farmers is also larger than in 2016/17, varying from 10% to 30%.

On March 15, the CEPEA/ESALQ Index of Arabica type 6, hard cup or better (delivered in São Paulo city), closed at 426.73 BRL (129.67 USD) per 60-kilo bag, 2.24% down compared to that on February 28.

Exportations

In February, the Brazilian exportations of green coffee (Arabica and Robusta) were 15.5% lower than in January and 8.4% below that in February/17, according to Cecafé (Coffee Exporters Council). The pace of shipments should continue slow until July, when a larger volume of the 2018/18 crop will be available.

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