New Brazilian coffee has not yet effectively appeared on the market. The harvest is slower than expected, including conillon/robusta, which began to be reaped earlier and should already have a larger volume available. The restricted supply, combined with the external appreciation, has sustained prices in the domestic physical market, justifying the recent upward movement. In practice, international gains have more than compensated for the loss in value of the dollar, which would have a negative effect on domestic prices.
Good cup arabica from the south of Minas Gerais has once again been traded above BRL 2,600 a bag, with some descriptions reaching BRL 2,700 per 60-kg bag. Although it has not yet returned to the levels of BRL 2,750 to 2,800 registered in early February, prices have moved away from the recent low, when coffee exchanged hands at BRL 2,430 a bag. This new upward movement represents a sales opportunity for growers before the Brazilian crop advances, which should gain pace in May. It is a fact that this year’s arabica crop in Brazil will be smaller than last year’s due to the drought registered in 2023. Moreover, stocks are very low, reinforcing the scenario of tight supply. However, the market has already priced in much of this tight supply, and the arrival of new coffee tends to cause some negative adjustments in the price curve. To give you an idea, new coffee for delivery in September is being indicated slightly above BRL 2,400 a bag — a decline of around BRL 200 compared to current prices, even without pressure from the arrival of new coffee on the market.
Therefore, especially for growers who still have a lot of remaining coffee or those who need to get cash to cover the initial harvest costs, this moment of firm prices represents a good sales opportunity. In any case, the trading strategy with gradual sales, taking advantage of the upward rebounds, remains valid. There is no need to rush, but highs should not be underestimated either. It is also important to continue following the first results of the crop and monitoring the evolution of polar air masses in Brazil, which can pose risks and bring new climate volatility to the market.
In the case of conillon/robusta, prices remain under greater pressure, reflecting a significantly more comfortable supply scenario. The canephora (conillon/robusta) crop in Brazil is expected to be larger this year, with good weather conditions favoring productivity. In addition, signs are positive for the robusta crop in southeastern Asia, especially in Vietnam and Indonesia, which reinforces the perception of greater global availability.
This scenario weighs on prices, which had already fallen with the first news of the arrival of new coffee in Brazil. However, prices are now showing some support, driven by strong demand from the domestic roasted and ground industry, which has sought conillon as a more affordable alternative to the high prices of arabica. With the more consistent progress of the Brazilian crop, the conillon/robusta prices will likely come under market pressure once more.
