Brazilian coffee growers have already sold 78% of 20/21 crop


        Porto Alegre, January 14, 2021 – The coffee bullish moment on ICE is slowing down. Of course, this is reflected in greater commercial tranquility.  Growers, after good sales of both the current and future crops, ended up increasing their defense lines. This is natural, especially in the last month of the year due to tax issues. The dollar’s reaction even served as a stimulus, marking a nominal improvement in the domestic price curve, but which was only effectively reflected in business in the first days of 2021.

         The internal prices seek to detach from the external reference, finding support in lower selling interest, despite the high volume still available due to the record production of 2020. Demand is still present but only for isolated lots, which is typical of the off-season.

         The monthly survey by SAFRAS indicates that until January 12 the commitment of the 20/21 crop by growers reached 78% of the expected output. This corresponds to an increase of only 4% over the previous month. Even so, the sales flow continues above the same period last year (77%) and are quite accelerated compared to the 5-year average (74%).

    Arabica sales reach 77% of production, against 76% in the same period last year and 73% on average over the last 5 years. Even with the best coffees trading above the level of BRL 600 a bag, growers remain on the defensive. When they show up on the market, they prefer to sell lower quality coffees, holding the best cups for future business, betting on the continuity of the bullish movement. On the other hand, buyers seek the best coffees, which contributes to low business liquidity and can lead to commercial distortions in the face of more needy exporters.

    Conillon sales, on the other hand, remain balanced and focused on domestic demand. The downward correction in the conillon crop reduces the available supply. Thus, conillon sales reach 83% of production, up from 79% in the same period last year and the 5-year average. SAFRAS Latam