Brazil's coffee exports last month recorded their lowest
July volumes in at least a decade, sapped by a shortage of supplies, Cecafe
said, amid ideas of a slow arabica harvest and a hold-out by producers for
Brazil shipped 1.52m bags of green coffee last month, a drop
of 8.1% from the July 2016 figure which was itself a weak total, sapped in
particular by the dent to robusta supplies from successive years of drought.
Indeed, last month's total was the lowest July figure since
at least 2007, reflecting in part a further drop, of 57% year on year, in robusta
shipments to a minimal 16,346 lots.
The five-year average for July robusta shipments is just shy
of 250,000 bags.
However, arabica exports dropped notably too, by 6.9% to
1.50m bags, a nine-year low for the month, and more than 600,000 bags below the
average of the previous five years.
The July coffee shipments from Brazil, the world's top
exporter, were "below what we had estimated", said Nelson Carvalhaes, the
He attributed the shortfall to factors including a low level
of pipeline stocks, and a new crop which has come onstream from Brazil's recent
harvest "at reduced speed, weakening supply".
The comments tally with reports from other sources of weak
supplies, thanks in part to 2017 being an off-year in the country's cycle of
alternate higher and lower arabica production years.
Analysts peg Brazil's overall coffee output this year at
some 50m bags, down 5m bags year on year.
This fall comes despite some recovery seen in production of
robusta beans, thanks to drought relief, albeit with volumes seen remaining at
historically soft levels of about 12m bags.
However, weather has maintained some hindrance to progress,
with research institute Cepea warning last week that "low temperatures delayed
the processing of beans, mainly the drying process, limiting supply in the spot
Furthermore, there has been talk of a reluctance among
growers to sell at prices which, on New York's arabica futures market, touched
a 15-month low in June of 113 cents a pound.
In Brazil, where strength in the real has enhanced the fall
in dollar prices local terms, arabica values in June hit their lowest in nearly
two years, according to Cepea.
Cepea said that, in the robusta market in particular, "many
growers expected prices to rise more sharply to close trades… trading only when
in need of cash flow".
Separately, merchant I&M Smith flagged "an apparent
continuation of general resistance from largest arabica producer Brazil to
participate as sellers".
Supply rise ahead?
Reports of pest damage to arabica crops in Brazil have also
raised concerns over supplies of quality coffee for export, besides supporting price
Nonetheless, Mr Carvalhaes said that "we estimate that, by September, exports should
resume normal levels, as a result of the harvest entering, albeit slowly, into