It is true that the physical market ended up falling a little, following the slowdown on ICE and the dollar adjustment after the definition of elections in the Brazilian Congress. Despite the decline, prices remain very close to the peak and, therefore, sustain a scenario that is largely favorable to sellers. In view of this, growers stretch their positions, splitting coffee lots or covering immediate needs. The losses of Brazil’s 2021 crop and the expectation of price improvement in 2021 justify this more retracted stance.
The best cups are still highly valued, as is arabica coffee in relation to conillon. In addition to the prospect of a sharp decline in arabica next season (30%), the stance of sellers reinforces this stratification. Growers continue preferring the trading of weaker cups and hold the best coffees, betting on the continuation of the upward movement. Buyers show more interest in better coffees. This mismatch even helps to generate some price distortions.