Brazil's coffee trade has been mixed this week with some sellers tempted to sell on upward price swings while others held out for better prices, industry sources said Thursday.

May coffee is down 20 points at $1.0850 a pound Thursday, while one dollar is at 2.38 Brazilian reals.

"It's slow so far today, with key factors the prices in New York and currency less favorable than Wednesday," said Tiago Ferreira, a broker at Futura Commodities in Sao Paulo.

The trader said that business was brisk on Wednesday when the rise in New York encouraged producers to sell their beans.

The nearby March contract on Wednesday settled 300 points higher, at $1.0710, which helped to craw back some of the losses after a fall of around 600 points on Monday.

Ferreira said that good quality arabica Swedish coffee was being traded in the local market for BRR260-BRR265 per 60-kilogram bag on Wednesday.

Major international traders such as Sara Lee Corp. (SLE) were active in the market to meet export obligations, according to traders and brokers.

Major multinationals have been showing a lot of interest in buying Brazilian arabica coffee for the second half of 2009, said a broker at Interagricola in Santos.

He said that Brazilian coffee is seen as competitively priced compared to coffees from markets such as Central America.

A broker at a Sao Paulo-based brokerage said that despite some trade on Wednesday, producers remain reluctant to sell.

"On Wednesday some small volumes of coffee were sold, but overall trade is slow after a fall [in coffee prices on New York] earlier in the week," he said.

Brazilian coffee producers are looking for prices of around BRR300 per bag for good arabica coffee, he said.

John Wolthers, a trader at coffee exporter Comexim in Santos, said that slow business this week reflects external economic conditions rather than good Brazilian coffee fundamentals.

He said that a good Swedish arabica coffee was being traded this week for around 24 points under the July and September arabica coffee contracts in New York. The trades were for shipment July to September. Little business is being done at this price, he said.

Brazil is the world's No. 1 producer of coffee.

-By Tony Danby, Dow Jones Newswires; 55-11-2847-4523; Anthony.Danby@dowjones.com