Brazilian physical coffee market very firm at beginning of 2021

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    Porto Alegre, January 14, 2021 – The brazilian physical coffee market has been firmer in the first days of 2021. The best cups advance above the level of BRL 600 per bag, following either the dollar or ICE. The sellers’ withdrawal ends up favoring internal gains. The fact is that growers are more capitalized after good sales last year. Thus, they manage better sales opportunities. This reduces the supply on the market and creates a more favorable environment for higher prices.

    Good cup with 15% of defects from southern Minas Gerais is trading around BRL 625 per 60-kg bag. The market not only managed to overcome the resistance at BRL 605 but also advanced positively into the level of BRL 600 a bag. Since the beginning of the year, the price of good cup has risen 5.9%, returning to a favorable level to sellers. Without the same strength as in the physical market, forward positions with future crops also increased, ranging from BRL 645 to 650 for Sep/21 and from BRL 670 to 675 for Sep/22.

     Fine cup from Cerrado de Minas is trading at BRL 650 per bag in the physicals. The idea for delivery and payment in Sep/22 reaches BRL 700, perhaps BRL 710 per bag. A shorter supply and good demand explain the value of this description. In Mogiana, fine cup is trading at BRL 645 per bag.

     In the Matas de Minas region, Rio cup is pegged at BRL 415 a bag.  Weaker cups, although not showing the same strength as group 1 coffees, also end up benefiting from higher prices.  Conillon type 7 is trading at BRL 410 a bag, finding support from a better domestic demand and lower available supply.

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