WEEKLY REPORT - COFFEE MARKET IN BRAZIL

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PDF download available: COVID-19 Weekly update – Atlantica Coffee – 04-17-2020

 

Dear valued partners,

We believe that collaborative efforts can provide a positive example of how the coffee community can come together and show unity to face these challenging times of pandemic.

We would like to share our market perception from the origin and some measures we are taking to reduce the impacts of COVID-19 not only on our operations but also on those of our partners.

 

Health and safety always come first

We at Atlantica Coffee put the health and safety of our employees, suppliers, customers, partners and community first.

As such, on Monday, we released a video on our social media with recommendations to producers of good harvesting practices to prevent the spread of Covid-19.

The video reached over 28,000 people in Brazil in four days, according to Instagram data, which reinforces that our capillarity in Brazil also plays an important role in helping to reduce the spread of the disease in the countryside through information.

Our employees are still working at home and only a few is present at the quality lab to maintain the fluidity and quality of the entire operation.

 

Remain flexible at atypical times

This pandemic has clearly changed all the factual circumstances along the coffee chain, and in recent weeks, we have observed some unusual requests of shipping postponement from some of our customers.

The switches are not fulfilling the carrying costs which are warehousing, insurance and financing. Carrying costs have increased despite it is not reflected at the forwards, which is pretty much precifying the uncertainties on the short term, and not really the cost to carry.

Although these costs impact our business, we are seeking to remain flexible, as a fundamental value of being a great partner to our stakeholders.

We kindly ask you to keep us updated at the destination if you see any challenges with ports, shipping lines, etc. that may influence the fulfilment of the open contracts. Please share the information with our Customer Care cc@atlanticacoffee.com .

 

Credit offer and operation lines

In view of the great economic instability set up by the pandemic and the increase of Brazilian and global risks, fundings are asking for more expensive rates. Banks taking advantage of companies’ high demand to guarantee their liquidity are increasing rates of credit supply.

 

Eyes at the origin

In the main coffee cities where we have operations, we have local teams responsible for maintaining daily remote contact with producers, for monitoring the harvesting, processing, buying and also assisting producers.

Although there is a great concern on the impacts on the harvest of the new crop, we still do not see any slowdown on it that would impact the coffee supply. Only a few properties have already started it. Most producers will start harvesting in May, as usual, and plan to hire local workers and take all recommended preventive measures, as discussed in our previous update.

Regarding the supply of the current crop, it is scarce as it is a between-harvest time. Some deals are taking place timidly with cooperatives or capitalized producers, which managed to save part of their crop before, that now have the opportunity to sell it at better prices.

 

Let’s keep believing and investing in the coffee culture so together we can keep moving coffee forward! Stay well!

Atlantica Coffee team