Coffee growers have already sold 64% of 20/21 crop

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Growers have already sold 64% of 20/21 crop

Commercialization has lost momentum, with a decline in prices and greater resistance from growers. Exporters have also been less aggressive, preferring to hold business a little, saving time to adjust logistics. The concentration of delivery in these first months of the business season generated a bottleneck, such as lack of space in warehouses and lack of trucks.

For the growers who sold their best coffees above BRL 600 per bag, it is difficult to accept the current price levels between BRL 520 and 540 per bag. In general, growers are very calm, as they took advantage of the previous market peaks by staggering positions. Now, more capitalized, they manage their trading better. In other words, growers made good sales, especially in July and August, taking advantage of the high dollar and ICE rebound, and slowed down their pace in the second half of September and early October, waiting for new opportunities.

The monthly survey by SAFRAS indicates that, until October 13, the commitment of the 20/21 crop by growers reached 64% of production. This is a very accelerated selling flow compared to the same period last year and also to the 5-year average, since in both positions only 53% had already been sold.

Arabica sales reach 65% of production (between forward sales, exchanges, and physical negotiations). In the same period last year, sales hit 52%, and the 5-year average is 51%. Growers prefer much more to sell lower-quality coffees, so increasing the supply of these descriptions in the market. They keep the best coffees by believing in the off-season or betting on a new rebound induced either by the exchange rate or weather.

Conillon sales, on the other hand, continued accelerated in September, losing strength only at the beginning of October. The high dollar favored exports. The arrival of Vietnam’s new crop from this October is expected to drive external demand towards the Asian origin. In any case, conillon sales reach 64% of production, against 54% in the same period last year and 60% of the 5-year average.