SAO PAULO, Brazil – The domestic prices for arabica coffee increased in Brazil in June, boosted by the dollar appreciation and valuations of future contracts. Thus, the CEPEA/ESALQ Index for arabica coffee type 6, delivered to São Paulo city – which has been higher than BRL 1,300 per 60-kilo bag since early June –, closed at BRL 1,361.20 (USD 260.27)/bag on June 30, 6.9% higher than that on May 31.
Still, Brazilian coffee farmers did not seem interested in closing deals, expecting quotations to rise higher. These sellers have made cash flow, favored by higher prices and uncertain supply.
Harvesting of the Arabica crop
The harvesting of the 2022/23 arabica crop is advancing in Brazil, having reached 10-30%, considering the major producing regions in the country. As for the output, agents have distinct estimates.
Some of them believe there will be a significant crop failure for arabica, estimating the national output near or even below the 35.7 million bags forecast by Conab in May.
On the other hand, for other agents, estimates are more positive, near or slightly lower than the 41.5 million bags forecast by the USDA in June.
Market of Robusta coffee
The Brazilian market of robusta coffee was calm in June. Despite the fluctuations of future contracts, only a few sellers and purchasers closed deals in the national spot market.
The harvesting of robusta crops advanced in Brazil in June, however, farmers have already made cash flow this season – favored by the high prices in 2021 – and, thus, between late May and early June, focused on selling the 2022/23 crop. In June, they were selling only low volumes when quotations rose.
Many farmers were waiting for the agents from coffee roasters to return to the market, which may push up values.
On June 30, the CEPEA/ESALQ Index for the robusta type 6, screen 13, Espírito Santo, closed at BRL 709.24 (USD 135.61)/bag, 0.14% up from that on May 31.
Harvesting of the Robusta crop
In Espírito Santo, 40-50% of the total had been harvested by June 24, according to Cepea collaborators. In Rondônia, 70-80% had been harvested. As for production estimates, agents believe the output will be higher than that estimated by Conab in May (17.7 million bags in Brazil). Some of them believe robusta production will be near the 22.8 million bags forecast by the USDA in June, while others forecast a slightly lower volume.