Brazilian growers sold 77% of 19/20 season
Growers took advantage of surging prices, which explains the good flow of sales in December, despite tax issues and the natural slowdown in the holiday season. One way for growers to skip the tax issue was to close deals with payment in early January. In any case, the market remained very active, which is fully justifiable in the wake of extremely attractive prices. Hard cup with 15% of defects from southern Minas Gerais exchanged hands at BRL 570 per bag, with some descriptions reaching BRL 600 (lots of finest and certified cups). In early January, coffee dropped about BRL 100 a bag, and turnover became much weaker.
The survey of SAFRAS indicates that until January 13 the commitments of the 19/20 season by growers hit 77% of production. Selling flow remains much faster compared to the same period last year, when sales reached 68%, as well as above the 5-year average for the period (73%).
The highlight is arabica, with sales reaching 76% of the expected output. Sales of these coffees are well above the same time last year (65%) and also higher than the average for the period (72%). Conillon sales also gained pace and reached 79% of the crop, above the same period last year and the 5-year average for the period (both at 77%).
Despite the good flow in the physical market, the highlight was actually the new crop. Strong commitment with high prices leaves growers very quiet for the arrival of the season. Thus, after the bullish bubble and strong trade dynamics in late 2019, it is natural that the coming few months have a slower flow in both physical market and new crop positions.