CEPEA: Favored by Climate, Arabica Prices in Brazil Rise Sharply in July
CoffeeNEtwork (New York) – According to the latest report from Brazil’s Center of Advanced Studies in Applied Economics (CEPEA), July was marked by the significant increase in Arabica coffee prices. Earlier this month, prices were boosted by forecasts of cold and drought in the coffee regions of Brazil. Although lower humidity is ideal for harvesting, many growers were already concerned about the 2022/23 crop (positive biennial), due to the dry weather since the end of March. However, it was at the end of July that price hikes intensified, after the occurrence of frosts in most of the producing regions.
In this scenario, the CEPEA/ESALQ Indicator for Arabica type 6 operated above R$1,000/60 kg bag between July 22 and 30, reaching, on the 26th, the highest real daily price since January 2012, when closing at R$1,067.27/bag. Between June 30th and July 30th, the increase was a significant 170.23 Reais per bag (or 20.1%).
For Robusta, prices also rose sharply in July, and the CEPEA/ESALQ Indicator of type 6 sieve 13 above closed on June 30th at R$ 580.56/bag, an increase of 80.12 Reais per bag (or 16 %) in relation to June 30th. On July 28, specifically, the Indicator closed above R$600/bag, the highest real level since December 2017.
According to researchers from Cepea, the variety's prices were driven by external gains and the retraction of sellers in the national spot. The futures, in turn, were influenced by concerns about the global supply of coffee in 2022/21, after the frosts in Brazil, although the Robusta crops were not affected by the phenomenon.
Alexis Rubinstein
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