* Brazilian coops report very low stocks, slow start to harvest
* Exporters still dealing with delays after truckers strike
* Importers see possible need to buy other origins as substitutes
By Ana Ionova and Marcelo Teixeira
LONDON/SAO PAULO, June 7 (Reuters) - Trade in arabica coffee in Brazil has slowed to a trickle as stocks dwindle at the height of the between-harvests period and merchants are still dealing with transport disruptions following a nationwide truckers strike.
The slowdown has tightened already scarce nearby supplies of arabica from the top grower where stocks dropped following a 20 percent fall in the last crop compared to the previous season.
While a record crop is expected this year, coffee has been slow to get to the market amid delays to the harvest. The truckers strike deepened worries about hold-ups as it curbed May coffee exports by some 900,000 bags.
“At the moment, there’s only limited business taking place,” said one European dealer.
“We’re not seeing the normal volumes traded.”
The reduced flow from Brazil has not stemmed persistent investor selling ahead of a looming supply surplus expected in 2018/19. But farmers could still make a profit due to a weakening of the local currency.
“If the weakening in the currency carries on, that will increase prices (in local terms) to a point to which the farmer will be incentivised to sell more,” said Steve Wateridge, managing partner at Tropical Research Services.
A weaker Brazilian real improves local currency returns on dollar-traded commodities such as coffee. The recent weakness improved returns by roughly 10 percent in reais, according to cooperative Coocapec, in the Mogiana coffee region in Brazil.
There are discordant voices in the market regarding level of stocks and possible farmer hoarding.
In Brazil, where much of the coffee is produced on large estates, growers often have access to storage facilities and do not have to sell immediately into the market, Ricardo Santos, managing director at London-based Riccoffee, said.
“The large estates are under no pressure at all - they have access to large amounts of cheap finance,” Santos said.
“Brazil is the one origin where large farmers have a very strong financial muscle and the infrastructure is there to hold coffee,” said Carlos Mera, senior commodities analyst at Rabobank.
However, Lucio Dias, head of sales at Cooxupé, the world’s largest coffee cooperative and Brazil’s number one arabica exporter, disagrees.
“There is basically no coffee left (from old crop). Farmers sold everything they had,” he said.
Dias said Cooxupé delayed shipments of 60,000 bags (60 kg) due to the truckers’ strike and estimates the coop will take 20 days to normalise cargos.
Jandir Castro Filho, commercial manager at Coocapec, says harvest has been delayed by around 15 days in the Mogiana area, since farmers were unable to prepare machines and buy fuel.
He said some importers might need to buy coffee from other origins due to delays and reduced flow from Brazil.
“We lost our ship due to the strike. I’m trying to get another vessel to put a container in it,” he said.
“This is a tight stock situation,” one European industry source said. “If coffee is stuck in the supply chain, you could end up in a situation where roasters have to find alternatives.”
Reporting by Ana Ionova and Marcelo Teixeira; editing by David Evans