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|Brazil's coffee exports fall, as producers await higher prices
By Mike Verdin - Published 09/08/2017
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 higher prices.
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 Cecafe president.
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.
'General resistance to sell'
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 market".
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 gains.
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
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