Brazilian coffee growers sold 82% of 21/22 crop

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Sales made little progress in December, despite high prices. Doubts about Brazil’s 2022 crop, tax issues, and the bet on the sequence of gains justify this shorter stance by sellers. It is true that 2022 begins with more interested but still not very active sellers. They have limited trades to small lots, seeking to cover immediate cash needs. On the demand side, there is no major interest either. Thus, trading progress has been slow. Growers must continue staggering positions, guided by the market’s bullish bias. They must only change attitude in case of more significant price lows.

Until January 10, sales of the 21/22 crop reached 82% of production, according to the monthly research from SAFRAS. The sales flow is above the same period last year when 79% of the crop had been sold by growers. It is also well above the 5-year average for the period, which is around 74% of production.

Arabica sales reach 79% of Brazil’s 2021 crop, slightly above the same period last year, when it reached 77%, and also above the 5-year average of 73% for the period. Conillon sales reached 87% of Brazil’s 2021 crop, against 79% sold at the same time last year and 74% on the five-year average for the period.

 Volatility from the ICE futures and the dollar helps enlarge the distance between buyers and sellers, reducing market liquidity. The sellers’ retraction bumps into the weak trading interest, suggesting that buyers have overcome the initial shock from the lack of shipments, higher costs, and peak consumption. Now they stretch their stocks, perhaps already expecting the arrival of new supply from Brazil. In this case, the size of Brazil’s 2022 crop continues to be a determining factor for the market behavior and demand posture.