Internal physical coffee market is very firm

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The Brazilian physical market has been very firm at the beginning of the year, with the best cups even breaking through the level of BRL 700 a bag at the end of last week.  Even after erasing part of the earnings, they remain highly valued, thereby opening up new opportunities for sellers.

Good cup with 15% of defects from the south of Minas Gerais is around BRL 640 per 60-kg bag, consolidating the description above the old sell price of BRL 600 per bag. However, even with this inviting price, sellers must remain on the defensive.  Growers have already made good sales and are capitalized and, therefore, will likely adopt a quieter stance, holding new positions and paying attention to the development of Brazil’s 2021 crop. 

Fine cup from Cerrado de Minas exchanges hands at BRL 670 per bag in the physicals. The idea for delivery and payment in Sep/21 ranges from BRL 680 to 690 a bag and for Sep/22 from BRL 700 to 710 a bag. A shorter supply and good demand explain the value of the description. In Mogiana the fine cup is negotiated at BRL 665 per bag available.

The weakest cups, while not showing the same strength as group 1 coffees, also end up benefiting from higher prices. In the Matas de Minas region, Rio cup rose to BRL 430 a bag. Conillon type 7 in Colatina, Espírito Santo, is trading between BRL 410 and 415 per bag in the physicals. So, conillon loses its relative value in relation to arabica, especially the best cups.