Sales of the 22/23 crop remain very slow. Harvest delay and doubts about production serve as a justification for a more restrained stance on the part of growers, which in turn reinforces the feeling of tight supply. Some growers have even sought official financing not to sell coffee at this time. The result of all this is a very slow selling flow for a beginning season. Demand, in turn, prefers to work on a hand-to-mouth basis, avoiding lengthening stocks at a time of economic and financial uncertainty, which helps to take away liquidity from business.
The SAFRAS survey indicates that, until June 12, sales of the 22/23 crop in Brazil reached 39% of the expected production. As a result, the growers’ current commitment remains well below the same time last year, when sales reached 48%. Last season, production was lower, and the flow of sales in advance was much more intense. Even so, this year’s sales remain above the five-year average, which indicated sales in advance for the period of 36% of production.
Arabica sales reach 39%. The ideas for Brazil’s 2022 arabica crop fluctuated a lot during the production cycle, which hindered the early sale strategy. The harvest delay with fears of lower-than-expected production ended up causing an even more retracted posture at the start of the season. Growers still remember the post-harvest price high last season and fear a similar movement for the current business cycle. In the same period last year, the commitment on the part of growers was around 48%, and the five-year average is around 36%.
Conillon sales have gained a little more pace, despite the harvest delay, and reached 37% of the expected output. Despite this, they are still well below the same period last year, when they were at 47%, but already slightly above the average of 36% for the period. In recent weeks, however, growers have slowed down a little, while the industry continues to work slowly. As a result, trading has lost some fluidity.