harvest, of robusta beans, has offered surprising good early results, with
quality rated "good", and raising questions over the extent of the rise in
Growers in Brazil's
Espirito Santo state - which produces some 75% of the country's conillon beans,
a robusta variety – say that their crops "developed well" despite the drought
which gripped much of the country earlier this year, Cepea
Indeed, a survey
of the state's growers by the influential research institute showed that crop "that
was already harvested presents good quality".
And the impact
was being felt on markets, where the first sales from the harvest "have been
traded at the same prices as those of the crop before", said Cepea, which is
linked to Sao Paulo University.
Cash vs futures
data show conillon beans trading at R$257.57 per 60-kilogramme bag in the
domestic market on Wednesday, up 3.2% year on year.
In dollar terms,
prices are down 7.4% to $116.02 per bag over the past year.
"This scenario is
different from that observed for futures contracts," Cepea said.
futures for May were standing at $2,131 a tonne on Thursday, up 9.0% year on year
on a spot contract basis, with the second-in July contract at $2,125 a tonne, a
gain of 6.1% a year on year.
Worse to come?
have been sent soaring by concerns over the impact of drought on Brazilian
production, with talk of a crop well below the 60m bags that had been talked of
late last year.
Citigroup two weeks ago cut its forecast for the overall harvest
to 44.25m bags, with Brazil's Conselho Nacional do Café producers' group
pegging the crop at 40.1m-43.3m bags.
However, commentators urged caution over reading too much
into the early results from Espirito
Santo, where many see crops having fared relatively well.
in its harvest downgrade, pegged Brazilian conillon production at a strong
16.7m bags, with the output of arabica, of which the country is the top grower,
pegged at 27.55m bags.
crop bureau Conab in January estimated the country's conillon output at
11.5m-12.6m bags, including 8.62m-9.52m bags in Espirito Santo, and arabica
production at 35.1m-37.5m bags.
'Still early days'
"It is still
early days for the coffee harvest, and it does seem that Espirito Santo has not
suffered as much as many parts of Minas Gerais," the core arabica producing
area, a London trader told Agrimoney.com.
In fact, parts of
Espirito Santo suffered floods in December, just before drought set in.
"We may see the
results being reflected more in spreads between robusta and arabica beans for
now rather than in the flat prices," the trader said.
In Espirito Santo,
the Incaper research institute, which on Wednesday pegged the state's conillon crop at 9.4m bags, up from 8.2m bags last season, has highlighted that northern parts of the state
received some rainfall, limiting the impact of drought seen more severe in Minas
'Speculative thirst sated'
In fact, arabica
and robusta beans were trading broadly in line on Thursday, with arabica for
July losing 1.0% to 199.05 cents a pound and robusta for July 0.9% lower at
$2,125 a tonne.
continues to be generally slow for the arabica," said Sterling Smith at
While weather "continues
to be seasonably dry, for the moment the speculative thirst for coffee appears
to be sated".