The flow of coffee sales in the Brazilian physical market has been quite erratic. Although the escalation of prices has been a powerful encouragement to sales, the smaller crop and doubts about the productive potential of Brazil’s 2022 crop acted as a strong brake on negotiations. In this sense, the sales flow, especially in the physical market, has been unsteady and very segmented. In regions with a high percentage of sales in advance of Brazil’s 2021 crop, growers focused on preparing coffee for deliveries, which reduced liquidity in new business. There have been some requests for contract rollovers due to low availability, but the volume of coffee involved has been small so far. New business was restricted to the seller’s need for liquidity.
In places with a less intense dynamic of future commitments, business flowed more intensely, with emphasis on Matas de Minas and conillon-growing regions. The limited physical availability of the weaker cups of arabica and the aggressiveness of the domestic industry towards conillon boosted the prices of such coffees, proportionally more than coffees with better cups bound for exports. And that ended up attracting more sellers.
Until September 6, sales of the 21/22 crop reached 60% of the expected production, according to SAFRAS monthly survey. Even with the grower’s caution, the sales flow continues slightly above the same period last year, when 58% of production had been sold by growers. And well above the 5-year average for the period, which is around 48%.
Arabica sales reach 58% of Brazil’s 2021 crop, losing a bit of pace. In the same period last year, it was at 60%. Even so, it remains well above the average for the period, which is around 46%. The high percentage of early commitment on the part of growers, especially in the Cerrado and south of Minas Gerais, and in Mogiana (São Paulo), justify this performance.
Conillon sales continue to stand out, in line with the good demand from the local industry. The price of conillon above BRL 700 per bag boosted sales, bringing more growers to the market. As a result, conillon sales reach 63% of Brazil’s 2021 crop, advancing 8% over the previous month. They easily surpass the level of 55% in the same period last year, besides remaining well above the 5-year average of 54% for the month of August.