This report is for the mutts who love to blame the high price of coffee on the Brazilian government.

The blame for the price is on the capitalist market itself.

"Primitive man, savage capitalism."

HOUSTON (Reuters) - Global coffee traders and roasters say they have reduced their purchases to minimum levels as the sector grapples with a sharp rise in prices that suppliers have yet to convince retail stores to accept.

At the annual convention of the National Coffee Association of the USA, held in Houston this week, event participants said they were shocked by the 70% rise since November in arabica coffee futures on the ICE exchange, the benchmark for coffee trading worldwide.

Renan Chueiri, general director of ELCAFE C.A. in Ecuador, said this year is the first time the instant coffee manufacturer has not sold all of its expected annual production by March.

"Normally, we would already be sold out, but so far we have sold less than 30% of production," he said. "The big price increase consumes the cash flow of customers, who do not have all the money to buy what they need."

The increases in coffee prices resulted from reduced production in major coffee-producing regions, especially in Brazil, the world's largest producer, reducing the availability of beans.

"No one wants to expose themselves, no one is buying for future delivery, it's all hand to mouth," said a coffee broker, asking to remain anonymous due to the sensitivity of the issue.

By "hand to mouth," he referred to the practice of buying only what is necessary at the moment and avoiding stockpiling.

Many recent deals in Brazil, he said, were conducted in a very conservative manner.

"You close a deal and have seven days to go to the farm or warehouse and pick up your coffee. You check the quality, and if everything is fine, you make the payment on the spot and leave with the coffee."

A recent Reuters survey projected that arabica coffee prices could fall 30% by the end of the year, as high prices reduce demand and the first signs point to an abundant Brazilian harvest next year.

However, until prices drop significantly, a large part of the coffee sector may face a difficult period.

A CEO of a large roaster in the United States -- the world's largest coffee consumption market -- said that some of his clients are unsure if they will be able to stay in business.

"They don't know if they will be able to sell their products at the new prices," he said, also requesting anonymity. "Some people are going bankrupt."

The CEO said that supermarkets and grocery stores were resisting the higher prices demanded by roasters. Negotiations were taking a long time, and some retail outlets were starting to run out of coffee on the shelves.

"It's been a nightmare," he added.

Coffee warehouses near U.S. ports, which receive beans from Central and South America, currently have half of their normal volumes, said an executive from one of the largest storage companies in the sector.

"Some storage companies are returning silos to owners, canceling lease contracts early," he said.

Michael Von Luehrte, owner of the brokerage MVLcoffee, said that the coffee market, especially on the commercial side, may undergo consolidation.

Companies with more capital will be able to increase trading volumes, while others will suffer from reduced financing, he added.

Commodity trading firm Louis Dreyfus said in a presentation during the conference that the coffee planted area has been expanding in response to higher prices.

The expansion occurred in countries like India, Uganda, Ethiopia, and Brazil. The company believes that if Brazil manages to achieve a large harvest, this, combined with the new planted areas, could lead to a collapse in prices.

(Report by Marcelo Teixeira)#WhiteHouseCryptoSummit $BTC