Brazilian coffee farmers resist higher prices, consultant says
BRASILIA, November 19 (Reuters) – Despite good prices, sales of the next crop of coffee in Brazil have shown little progress over the past month, due to uncertainties in production and expectations that prices will rise further, consulting firm Safras & said on Friday. Mercado.
Arabica coffee on the New York ICE exchange is at its highest level in nearly 10 years, reflecting concerns over supplies affected by adverse weather conditions.
Despite this, sales of the 2022/23 crop of the world’s largest coffee producer and exporter only increased by one percentage point in the month to November 12, to 26% of its production potential, a declared Safras & Mercado.
“Doubts about production, rumors of a lack of coffee deliveries and a bet on higher prices explain such behavior by sellers,” said Gil Barabach, consultant for Safras & Mercado.
He added in a note to clients that the short “spread” for longer positions in ICE also reduced sales interest.
The first arabica coffee contract at ICE KCc1 was listed at around $ 2,369 a pound around 1:30 p.m. EST, a higher value than quoted for the farthest KCc2KCc3.
Barabach said the prevailing view is that prices may rise further as they do not fully reflect the losses this year inflicted by frosts and prolonged drought on the production potential of the next Brazilian crop. The producers therefore resist and postpone sales as much as possible.
Arabica producers committed 29% of their 2022 harvest, and 18% in the case of conilon, according to Safras & Mercado, while the commitment of the 2023 Brazilian harvest remains around 9%, mainly in arabica (12% ).
(Reporting by Roberto Samora; Editing by David Gregorio)
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