Melon/CEPEA: Cold Weather Limits Market Liquidity
According to CEPEA, melon demand, which had shown signs of recovery in early May, significantly weakened last week due to falling temperatures in São Paulo. Market prices consequently dropped, and despite a gradual increase in supply from the São Francisco Valley, overall weak demand forced traders to lower their quotes. Continued low temperatures are expected this week, potentially further dampening demand and increasing stock levels.
Recent reports from the Center for Advanced Studies in Applied Economics (CEPEA) at the University of São Paulo indicate a weakening trend in the melon market. While demand for melons had shown some signs of warming up at the beginning of May, it significantly tapered off last week due to a sharp drop in temperatures recorded in São Paulo.
Researchers from CEPEA's Hortifrúti team noted that prices at the São Paulo wholesale market (Ceagesp) have already fallen. Concurrently, although the supply of melons from the São Francisco Valley region (Bahia/Pernambuco) is gradually increasing after the rains experienced over the past two months, it has not yet reached substantial levels.
In this scenario of rising supply coupled with weakening demand, traders have been compelled to lower their price quotes. Looking ahead, Climatempo's forecast suggests that low temperatures are expected to persist in the capital this week. This could further reduce consumer demand, potentially leading to increased stock levels and sustained downward pressure on market prices.