After weeks with rising prices, the Brazilian physical coffee market has gone through corrections, surprising growers and slowing down negotiations. Good cup arabica in southern Minas Gerais, which had been trading above BRL 2,500 per bag, has fallen to the range of BRL 2,250 to 2,300, depending on quality. Despite the drop, prices remain well above the BRL 1,800 level seen in early August. Weaker differentials at FOB Santos, with Brazilian MTGB good cup (14/16 screen) between -25 and -26 cents against the position in New York.
Conillon type 7/8, in Colatina (ES), also showed an adjustment: it is currently set at BRL 1,380 per bag, compared to BRL 1,525 at the beginning of September. Even so, it remains at a significant high compared to August, when it was sold for less than BRL 1,000.
Despite the correction, the outlook remains favorable for growers. The tight supply situation ensures sustained prices, keeping the trading window open—perhaps narrower than before, but still relevant. This is not the time to rush sales, given the production uncertainties and limited supply. However, it may be appropriate to take advantage of this positive momentum (manage opportunities) to shore up cash flow, especially for those with commitments in the coming months. This will provide greater peace of mind for managing the flow of sales for the remainder of the crop.
