CEPEA: Brazilian arabica coffee type 6 averages 485.52 reais/60-kilo bag in July-Dec. 26 period, up 45.7% year-over-year; robusta type 6 rises 38.1% to 245.54 reais/60-kilo bag

PIRACICABA, Brazil , January 4, 2012 (press release) – Prices of arabica coffee registered high levels in 2011. This is attributed to the low world production, which may not be enough to meet the increasing global demand. As a result, stocks dropped to the lowest levels in history in both consuming and producing countries.

According to ICO (International Coffee Organization), the world production in the 2011/12 season might amount 128.6 million bags, 3.4% lower than the previous one (2010/11). The reduction is related to the negative biennial cycle in Brazil and weather problems in major producing countries (Colombia, Vietnam and Central American countries). Regarding Brazil, according to Conab (National Company for Food Supply), the production might total 43.48 million bags, a drop of 9.6% in relation to the 2010/11 season.

The world stocks for the beginning of the 2011/12 crop, according to ICO, were 29.1 million bags, 6.1% below that at the beginning of the 2010/11 season. Estimates of ICO indicate that the world consumption moved up 28% over the last ten years, amounting more than 135 million bags in 2010.

The decrease in the world supply and the steady demand pushed up coffee quotes both in the domestic and international markets.

In Brazil, the average of the CEPEA/ESALQ Index for arabica type 6 delivered in São Paulo (capital) hit a record in April, keeping steady in the following months. In the partial of the 2011/12 crop (July until Dec. 26), the average of the Index was 485.52 reais or 283.43 dollars per 60-kg bag, upping 45.7% compared to the same period of 2010.

Regarding exports of green coffee beans, in the partial of the season (July to November 2011), the revenue with shipments have already surpassed 3.6 billion dollars, according to data from Secex (Foreign Trade Secretariat). This amount is 41% higher compared to that in the same period of the last season (2010/11). On the other hand, the exported volume totaled 12.7 million bags, 9.1% lower than in the same period of 2010.

The quality of Brazilian coffee beans is better compared the 2010/11 season. This is because it practically did not rain in the harvesting period in the main producing regions, which have resulted in high quality coffee.

Robusta prices have also edged up in 2011, despite the production of the 2011/12 crop hitting a record in Espírito Santo state. According to Conab, the season might amount 8.5 million bags, 15.5% more than the registered in the 2010/11 (7.4 million bags).

Since early 2011, the robusta coffee type 6 has been traded above 200 reais per bag, increasing almost daily from mid-October onwards. In the partial of the 2011/12 crop (July – Dec. 26), the average of the CEPEA/ESALQ Index for the robusta coffee type 6, available in Espírito Santo state (origin), was 245.54 reais per bag (143.34 dollars), upping 38.1% compared to the same period of the last crop.

Exports of robusta coffee soared 80% between July and November compared to the same period of 2010/11, totaling 1.2 million bags (Cecafe - Coffee Exporters Council in Brazil).

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