The physical market continues at a slow pace, with interest gradually shifting to new-crop coffees, which are timidly beginning to appear in trading regions. In the case of conillon, where the harvest is more advanced, the arm-wrestling between the local industry and growers remains. Sellers eye the progress of international prices on the London terminal. Industry, on the other hand, lengthens positions waiting for the advance of the harvest and weaker internal prices. The slight decline in prices, however, ended up attracting buyers a little more to cover immediate needs.
New arabica is gaining a little more visibility in the Matas de Minas region. However, most of the lots offered in the market have a rate of defects above 40% and a high percentage of green beans, which does not meet the patterns required by very selective buyers, who only show interest in coffee with less than 30% of defects.
In the South, Cerrado and Mogiana, coffee supply is still small. Price indications between the physical and new crop markets remain distant, despite the recent approximation. Good cup in southern Minas is bidded in the physicals at BRL 1,040 a bag, while new crop indications are around BRL 970 a bag. The difference has dropped to BRL 70, after hitting BRL 100 a bag. Even so, it is still an expressive step that should be mitigated with the progress of Brazil’s 2023 crop and lean toward new crop prices in view of the confirmation of full production in Brazil. And the seasonal effect of the arrival of the new crop is linked to the behavior of growers, who continue to have a low percentage of sales and, therefore, are vulnerable at the arrival of the crop.