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Weekly report – Brazilian Coffee Market – April 03rd ~ 06th 2023

by Apr 6, 2023Market report0 comments

KCNY and Currency

The first week of April was a busy one on the NY ICE, and volatility was a constant factor. The market worked much of the time above 174 cents/lb and had a volatility around 1300 points in this week, which is a shorter week, as NY ICE will not work on Friday (07) due to the Good Friday holiday.

Many lots were traded during the week, where most of it was due to position rollovers out of the May/23 due date – whose delivery period starts on April 20th – and the negotiation of spreads for other due dates.

In the exchange rate, the Dollar worked with a certain stability, considering the variations seen in the previous weeks. The market continues to pay attention to the US economy and to the internal and external interest rates, which favored the weakening of the Dollar against the Real.

Certified stocks on the NY exchange closed this Thursday (06) at 730,659 60kgs bags, the lowest level since December 14, 2022. There are no bags pending approval since last 27th.

MAY/23: Min: 171,25 | Max: 184,55 | Last: 183,60
BRL/USD: Min: 5,0143 | Max: 5,0993 | Last: 5,0610 

*Data as of completion of this report.  

WEATHER

The next few days should be marked by the occurrence of rains during the afternoon and evening throughout the Southeast of Brazil. The cold front that arrives on the coast of São Paulo at the end of the week should advance to the states of Minas Gerais, Rio de Janeiro and Espírito Santo.

Despite the cold front arriving with weak intensity, the heat combined with high humidity could organize isolated thunderstorms starting in the afternoon. There is a risk of occurrence of hail in the coffee regions in the South Minas, Mogiana and Matas de Minas.

Rain forecast for the week: 

South Minas region: between 40 and 50 mm. 

Matas de Minas region: between 40 and 50 mm. 

Cerrado region: between 40 and 50 mm. 

Alta Mogiana region: between 40 and 50 mm. 

Garça region: between 5 and 10 mm. 

DOMESTIC MARKET and FOB

The Dollar devaluation and the volatility in the NY stock exchange had a direct impact on the domestic market. On the buying side there is still a lot of caution and on the producer’s side the expectation of upward movements in NY ICE remains. There were many offers but the deals that were done were more punctual, since prices are still very mismatched. As for the FOB, the pace of negotiations was slower.


The ideas of sellers in the domestic market are as below:

Strictly soft good cup running screen: seller close to R$ 1.050,00
Strictly soft fine cup running screen: seller close to R$ 1.080,00
Rio Minas: 
Running screen with 30% low grades close to R$ 950,00
17/18 around R$ 1.060,00
14/16 around R$ 1.030,00
600 defects: close to R$ 940,00;

LOGISTICS

According to the Brazilian Foreign Trade Secretariat (Secex), Brazilian coffee bean exports in March closed at 2,724,073 60-kilo bags, with 22 working days counted (daily average of 118,438 bags). Revenues reached US$ 600.776 million (daily average of US$ 26.120 million), with an average price of US$ 220.54 per bag.

The average daily revenue obtained was 30.2% lower when compared to the daily average of the same month in 2022, which was US$ 37.434 million. The average daily volume shipped was 23.0% lower than in March 2022, which had registered an average of 153,775 daily bags. The average price, in turn, fell 9.4%. The data are from the Secretariat of Foreign Trade (Secex).

According to SPA (Santos Port Authority), manager of the Santos port complex, unmanned aerial vehicles (drones) have been used by the Port Guard to reach places of difficult access or with poor visibility, becoming allies in the supervision and efficiency of operations at the port.

For another week we had a negative impact on operations due to the low container stock of some ship owners. There was no noticeable restriction on ships leaving in the next 4-6 weeks for the main ports in the USA, Europe and Asia.

Atlantica Coffee Team

Disclaimer: 

This analysis report aims only to provide information about the coffee market, based on internal and public sources, valid at the time of its dissemination. It does not aim to guide recipients in making any decisions, which are therefore solely the responsibility of the recipient. Atlantica Coffee is exempt from any liability arising from direct or indirect losses.