Price Report 08-19-08

Good day,

As the cold season in the Brazilian coffee belt can now be considered as gone, we now look into the harvest results in the many different production zones.

The South of Minas and the Sao Paulo Mogiana areas have already harvested about 60% of their coffees. Other regions in Sao Paulo and in Parana, more than 70% is in store already.

The Cerrado region in Minas Gerais is as usual a bit later in its harvest period and another 50% of the crop is still to be harvested now during the months of Sept and October.

New lots are still very scarce in the market. This is due to plentiful sales made earlier in the year to exporters, governmental inventory and swaps for fertilizers. The late harvest has put many producers and Coops against the wall regarding their priority deliveries.

Another new harvest delaying factor this year is the sharp reduction of labor, as Brazil experiences it’s “El Dorado” season in agriculture, industry, tax revenues, real estate and energy sectors, it has been difficult to find enough coffee pickers for the same money, even higher salaries have proven to be unproductive in attracting more workers.

As the remaining harvest slowly arrives, the internal availability should start to become more visible and promote shipments of the already delayed new crop deliveries to North America, Europe and Japan.

A factor which will have some impact on next years crop is the early outer branch flowering which happened in the entire soft coffee belt as meaningful rainfall was measured last week, in the areas still un-harvested, these flowers will not fructify.

Quality – wise, we remain very positive, the weather has been mostly dry and the logistics have been manageable until now.
Let’s hope that the weather remains dry for another 30 to 40 days and the better natural Arabica preparations will add on to the current inventory increasing the amount of soft and fine cup coffees.

Best regards,

Christian Wolthers

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