Amid the futures market volatility and a weak dollar, arabica has experienced a slight correction in early October in the Brazilian physical market. The losses reflect a consolidation of recent gains rather than a trend reversal, as the market awaits updates on blossoming and the first signs of the next Brazilian arabica crop. Also on the radar is the expectation that Brazilian coffee will be included on the U.S. tariff exemption list, which would help unlock the flow of shipments to the world’s largest consumer.
In southern Minas Gerais, good cup coffees, which reached BRL 2,500/bag in mid-September, closed the month averaging BRL 2,297 and are priced at the beginning of October between BRL 2,230 and 2,250 per 60-kg bag. The movement confirms the upward trajectory and maintains a wide positive distance from the same period in 2024 (BRL 1,497) and the five-year average (BRL 1,114)—values adjusted by IGP-M. Thus, the market consolidates a positive difference, expanding the sales window and reinforcing the favorable scenario for growers.
Growers recognize the positive momentum and seek to capitalize on it, but remain without aggressiveness in their selling positions. Sales are generally driven by short-term cash flow needs, as supply is limited due to the smaller crop. Moreover, uncertainties regarding future supply persist, which could lead to further upward volatility and opportunities to sell at higher prices.
The fact is that volatility, which reflects the current uncertainty, ends up hindering the flow of business. Growers have sought to adjust their sales strategy to the profile of the 2025 crop—size and quality. A positive signal for the future Brazilian crop could encourage more sellers to enter the market, but limited physical availability, due to the smaller arabica crop this year, should continue to support prices and market volatility, even if subject to negative corrections in the price curve.
Given this situation, it is essential for growers to be alert to market opportunities, futures market and dollar rebounds, and consider external factors such as high interest rates—the Selic rate at 15% per year, over 1% a month. The decision to sell or hold coffee must take into account this financial earning variable (investment in fixed income).
But the flow of advance sales of the new crop remains modest, limited by the uncertain production of the 2026 crop and futures prices below those in the physical market (the stock market carrying an inverted spread). Recent experience with forward price appraisal in a market more valued than the pre-fixed price explains sellers’ resistance to this modality. The decision to sell in advance (future lock) should be tied to a strategy to protect future financial margins.
Brazilian conillon tries to sustain rally
At the beginning of October, the Brazilian physical market for conillon/robusta is attempting to sustain a rally. Despite Brazil’s large crop and the imminent entry of its main competitor into the market, supply remains tight. Domestic industry demand ensures supply flow, while growers, capitalized and confident of new price highs, maintain supply control, even with high stockpiles.
In Espírito Santo, conillon is pegged between BRL 1,350 and 1,360 per 60-kg bag. This price is lower than the same period last year (BRL 1,528), but well above the five-year average (2020–2024), which for October is around BRL 865 per bag—values deflated by IGP-M (General Market Price Index).
Robusta’s support in London, strong export differentials, and domestic industry demand are maintaining the current price level. However, attention must be paid to the arrival of the Vietnamese crop, which could impact both the London market and export parity, with repercussions on the domestic physical market. The conillon crop blossoming in Espírito Santo was, once again, very positive, which raises expectations for a good crop in 2026.
