Bloomberg News

Brazil’s Coffee Growers Harvest 30% of Robusta Crop; Sales Slow

May 17, 2013

Coffee growers in Brazil, the world’s largest producer, have probably harvested about 30 percent of this year’s robusta coffee, while sales of the variety remain slow, according to Rio de Janeiro-based broker Flavour Coffee.

Brazil will produce 48.6 million bags of coffee in 2013, a record for a year in which trees enter the lower-yielding half of a two-year cycle, the government’s crop-forecasting agency known as Conab said on May 14. Production of the arabica kind, favored by Starbucks Corp. (SBUX:US), will total 36.4 million bags, while output of robusta variety, used in instant coffee, will be 12.2 million bags. Private traders estimate the crop higher at 53 million tons to 57 million tons, according to Flavour Coffee.

“Harvesting procedures are in full swing by now, with picking probably reaching 30 percent of the crop,” the broker said in a report e-mailed yesterday, commenting on the robusta crop. “There is still no flow of business in spite of the increasing availabilities with new crop arrivals.”

Conillons, as Brazilian robusta beans are known, were trading at a premium of 7 cents a pound ($154 a metric ton) to the price on NYSE Liffe in London for shipments from May to July, data from the broker showed. That is up from a premium of 6 cents a pound last week. Robusta coffee for July delivery fell 0.2 percent to $2,043 a ton by 11:18 a.m. in London.

Dry and sunny weather in the southern states is helping bean maturation and harvesting, the broker said. Harvesting of robusta beans usually starts before arabica in the South American nation. A cold front approaching the coffee areas is unlikely to disrupt pickings, according to Flavour Coffee.

Arabica Trades

A “good volume” of arabica beans was traded over the past week, with sales from the new crop concluded for shipments as far ahead as June 2014, Flavour Coffee said.

Arabica beans of fine-cup quality from last year’s crop were at a discount of 12 cents a pound to the price on the ICE Futures U.S. exchange in New York, unchanged from a week earlier, data from the broker showed. Fine-cup quality beans from this year’s crop were at a discount of 16 cents a pound from 17 cents last week. Arabica coffee futures for July delivery advanced 0.8 percent to $1.409 a pound on ICE.

Coffee of good-cup quality from last year’s crop in Brazil was at a discount of 19 cents a pound from 18 cents a pound last week, according to Flavour Coffee. New crop beans were at a discount of 22.50 cents a pound to 23 cents a pound from 21 cents a pound a week earlier. Fine cup beans are usually more expensive because of their taste profile.

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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