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WEEKLY REPORT – COFFEE MARKET IN BRAZIL

por jun 19, 2020Coffee0 Comentários

Dear valued partners,

 

During this week, a sum of events gave support to dollar movements, hitting R$ 5,875 on Thursday, 7, another record low of Brazilian currency against the dollar.

 

The Selic rate, the basic interest rate of the economy, fell from 3,75% p.a. to 3% p.a., its lowest historic level, which reduces the attractiveness of investing in Brazilian public debt bonds. The risk rating agency Fitch has revised  Brazilian national scale ratings to BB- (negative). Brazil’s economy minister Paulo Guedes said “The Brazilian economy is beginning to collapse” due to the impacts of the pandemic.

 

Here in Brazil, the prices on-the-spot Market are more expensive than the new crop offers that have already started to appear. That’s because coffee availabilities are getting smaller, typical of betweenharvest season. In parallel, there is a lack of demand from abroad for new businesses for the short and medium terms.

 

The climate and striking uniformity of the coffee cherries are favorable for a new record crop and of very good quality in Brazil. In some regions of the country, the harvest is in progress, with preventive adaptations in the routine of the farms, but without difficulties. With the intensification of the harvest between May and June, there’s a greater need for labor, a time when problems may arise if the preventive care is not maintained.

 

For the 2020/2021 crop, good volumes were traded, but with very different opinions around the percentage in relation to production. The optimistic forecasts for supply are accompanied by doubts regarding the global demand for coffee, given the drop in consumption away from home, concerns about the increase in the unemployment rate at expressive levels, among others.

 

The Covid-19 pandemic changed all global relations. In a scenario of so many uncertainties, there are great impacts on the economic, social and emotional environments that interfere in the routine and decision making of individuals, companies, governments and, in this context, the coffee chain.

 

There are many variables to be analyzed and their possibilities. Only with time we will we be able to understand the
extent of these impacts in the new times that we are living.

 

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

 

Stay well!

Atlantica Coffee team