Cooxupé, the world’s largest coffee cooperative and Brazil’s number one exporter, said on Friday it had basically sold all of its supplies in contracts with deliveries extending out as far as May or June next year.
Cooxupé’s head of trading Lucio de Araujo Dias said the company met "surprising strong demand" recently, and it would face difficulties forming new lots for new orders from now on, despite Brazilian farmers having just finished harvesting the 2019 coffee crop.
"If a client calls, I will have to work with associated farmers and try to form new lots, because what we have in storage is already committed," Dias said.
His comments contrast with a general view in the market that supplies are ample, with production surpassing consumption in the last couple of years and the expectation for a record production out of Brazil in 2020.
"I know talks about a large Brazil crop next year have cut prices, but until we get there there is a long time," Dias said.
New coffee lots from Brazil’s 2020 crop will only arrive on the market around July next year.
"Funds sold a large amount of coffee in the market recently, but that coffee does not exist," Dias added.
Funds have been heavily sold in coffee and sugar in the futures markets, betting that prices will remain under pressure from production increases.
Despite Cooxupé comments, most market analysts expect bumper coffee production next year from Brazil, with some suggesting numbers as high as 70m bags.