Conillon coffee remains very strong in Brazil. The appreciation in the London exchange, given the difficulty with the supply of robusta, continues to provide upward traction to prices in the Brazilian physical market. External demand for Brazilian conillon remains high, which maintains the higher value (+7 cents against ICE Europe, converted into cents per pound), even with the record levels reached at the London terminal. Finally, the volatility of the dollar itself also favors the support to conillon prices.
Type 7 conillon from Espírito Santo is pegged in Vitória at BRL 1,460 per bag (USD 260 per bag) and keeps setting highs prices for the description, which once again widens the gap from the deflated 5-year moving reference (BRL 628 per bag). This is more than double the price normally practiced in the market.
Domestic industry replaces conillon with arabica and works from hand to mouth
Conillon has increased the positive distance from the good cup arabica with 600 defects intended for domestic consumption, which is pegged at BRL 1,330 per bag (USD 236 per bag). The difference is currently around BRL 135 per bag. The relative increase in the price of conillon has led the domestic industry to limit purchases of this description as much as possible, replacing it with weaker arabica. This changes the sales dynamics in the domestic market and helps to support the prices of weaker cup arabicas.
Faced with the dilemma between the high price and the difficulty in passing the price on to the shelves, and the risk of further highs and tight supply, as a result of the drought in Brazil, the industry maintains a conservative stance and continues to work from hand to mouth.