Brazilian coffee export prices set multi-year highs last month, in sharp contrast to tumbling values shown by other indicators, according to Cecafe, which also revealed the weakest robusta shipments in four years.
Brazil earned an average of $161.63 per bag for its robusta coffee shipments in October, a gain of 3.3% month on month and the highest total since May 2017, the industry group said.
Arabica exports were priced at an average of $253.14 per bag, also up by 3.3% month on month – to the highest since March 2012.
‘Prices remain weak’
The rises contrast with steep declines in coffee prices as reported by other commentators, with Cepea recording a 17.3% plunge in Brazilian robusta prices, in dollar terms, last month and a 19.8% slump in arabica values.
The International Coffee Organization reported a decline of 10.6% in its coffee price index in October, the biggest month-on-month tumble since at least 2008.
London robusta futures fell last month by 13.1% on a spot contract basis, and New York arabica futures futures by 19.8%.
The declines have been widely attributed to favourable weather in Brazilian plantations for the blossoming period, key to 2023 crop prospects, as well as to concerns of economic slowdown undermining coffee demand.
Separately, Gil Barabach, consultant at analysis group Safras e Mercado, reported that “prices remain weak” with values of even better-quality arabica beans “working below R$1,000 a bag, deterring sellers”.
Indeed, the pace of sales is “still very slow in Brazil”, the group said, reporting that producers had priced 65% of their 2022-23 crop as of Tuesday, up by 5 points month on month but behind the 72% figure a year ago.
The strength in the Cecafe figure could reflect a lag effect, an analyst at a leading European coffee roaster told GrainPriceNews, with the values shown for October reflecting deals struck some weeks ago.
“One thing we have noticed is a greater lag in prices flowing through, because of all the logistical hold-ups in the supply chain,” the analyst said.
Günter Häusler, the Cecafe president, reported that there had been no “significant” improvement in global logistics.
Exports remaining dogged by the “lower availability of containers, ships held up in northern hemisphere ports, mainly the US and Europe, difficulties in obtaining bookings, cargo rollovers and very high costs”, Mr Häusler said.
Cecafe reported Brazil’s coffee exports last month at 3.18m bags, up by 37,000 bags month on month but the lowest figure in five years for October.
October has over the past decade been the top month for Brazilian coffee exports.
While arabica shipments, at 3.07m bags, achieved growth of some 3% both year on year and month on month, robusta volumes came in at just 110,000 bags – the weakest total for any month since May 2018, when Brazil’s output was recovering from consecutive years of drought damage.
The fall in robusta volumes, of 26% month on month and 63% year on year, reflected “greater demand from the domestic industry” for the beans, which are used largely in making soluble coffee, of which Brazil is the top producer.