The negative realignment in the price curve together with higher market volatility with the conflict in Eastern Europe brought a little more interest on the selling side. However, this interest did not translate into a major business volume. So, sales of the current crop follow at a slower pace, typical of the off-season. The fall in prices has indeed made growers feel more distrust of the market. The perception is growing that the peak of the market is already gone. This view is reinforced by the proximity of the new crop. Even so, growers remain on the defensive, stretching positions and showing no rush. The lower physical availability, due to the failure in Brazil’s 2021 crop, contributes to the slower selling progress in this final stretch of the business season.
Buyers do not show great aggressiveness either. The biggest concern among exporters is the adjustment of the flow of shipments, which is delayed due to the logistical bottleneck generated by the pandemic. The vast majority should only be able to reorganize shipments for the current season in June and July, that is, within the new business season. In recent weeks, an acceleration in the movement of these coffees towards ports has been noticed, which should empty the warehouses a little and help to maintain the rhythm of shipments from Brazil in these last months of the season. And with that, we can have a better idea of the potential carry-over stocks for the 21/22 crop, which must be very low. This delayed flow should affect the buyers’ positions with Brazil’s 2022 crop, at least at the beginning of the new season. There is the expectation that buyers will shorten their positions a little. High coffee prices justify this stance.
Until March 7, sales of the 21/22 crop reached 89% of production, according to SAFRAS monthly monitoring. The sales flow is above the same period last year, when 87% of the crop had been sold by growers. It is also well above the 5-year average for the period, which is around 85% of production.
Arabica sales reach 87% of Brazil’s 2021 crop, slightly above the same period last year, when they reached 86%, and above the 5-year average for the period (83%). Conillon sales reached 94% of Brazil’s 2021 crop, against 91% sold at the same time last year and 89% on the average of the last five years for the period.