CEPEA: Brazilian arabica coffee type 6 down 4.95% month-over-month in October to 468.03 reais/60-kilo bag; robusta type 6 rises 7.28% to 254.50 reais/60-kilo bag

PIRACICABA, Brazil , November 1, 2011 (press release) – Rains registered in late October started to influence new blossoming in many coffee crops in Brazil. If flowers develop into fruits as expected, the production in the 2012/13 season (positive biennial cycle) will be promising and the damage caused by the dry weather may be minimized.

In late October, trees blossomed in the southern region of Minas Gerais state. Agents surveyed by Cepea said that this might be the main blossoming.

Rains have relieved producers in the main coffee producing regions in Brazil. However, excessive rains in other producing countries (Colombia, Vietnam and countries from the Central America) have been pushing production forecasts to lower levels. The scenario of strong rains is attributed to La Niña. In the short-term, the main consequence is the reduction of trades due to difficulties to flow the product and to step up harvesting activities. Moreover, wet weather may cause fungi and diseases in crops and, therefore, damage coffee beans. If weather conditions remain unfavorable in some major producing countries, the world supply might be affected.

In the Brazilian arabica market, trades were sluggish in October. Sellers were still waiting for new price rises to trade. The CEPEA/ESALQ Index for arabica type 6 delivered in São Paulo (capital) closed at 468.03 reais or 276.29 dollars per 60-kilo bag on Oct. 31, moving down 4.95% in the accumulated of the month.

As for the robusta market, in late October, the CEPEA/ESALQ Index for the robusta coffee type 6 hit all-time highs of Cepea series, started in 2001. Prices were firm because sellers refrained from trading.

In the accumulated of October, the CEPEA/ESALQ Index for the robusta coffee the type 6 soared 7.28%, and closed at 254.50 reais or 150.23 dollars per 60-kg bag on Oct. 31. The Index for type 7/8 closed at 244.14 reais or 144.12 dollars per 60-kilo bag, increasing 7.1% in the same period – both available in Espírito Santo state (origin).

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