NYSE and BRL/USD
Arabica prices continue their one-and-a-half-week high, pressured by the expectation of lower Brazilian supply for the 21/22 crop and technical movements. The devalued dollar and the appreciation of the real also provided support to the commodity. On the downside, the growth of cases of Covid-19 in the world brings demand uncertainties.
May/21: Min: 120.55 | Max: 128.85 | Last: 127,25 USC/lb
BRL/USD: Min: 5.5396| Max: 5.6835 | Last: 5.6710
*Data until the completion of this report.
LOGISTICS
The shipping difficulties get worse every day. We are daily facing, not only a lack of containers but also the low offer of space in vessels and the roll-over of bookings with all shipowners. As a mitigating measure, the ship owners have reduced the free time in the ports from 20 to 7 days.
Even at the beginning of April, we already have several refusals by shipowners in bookings for the second half of May, justified by the lack of containers and space. Therefore, we request our customers to urgently send Shipping Instructions and to contact the shipowners to try to guarantee space and equipment available for the fulfillment of shipments in May and June.
DOMESTIC MARKET
The domestic market has shown low liquidity, with only a few occasional deals. The hard drink coffee type 6 revolved between R$650 and R$680. The harvesting of the 21/22 crop has already started in warmer regions, such as Zona da Mata, in the cities of Fervedouro, São Francisco do Glória, Simonésia, Caratinga, and Matipó, where a high percentage of immature fruits are still present, which is typical of the beginning of manual harvesting. The forecast is that these coffees will reach the domestic market in about 20 days.
FOB
In FOB sales, the market was extremely tight, with importers not eager for new shipments in the short term. There was some demand for some specific qualities of certified coffee, but there is little supply of these coffees in the domestic market.
WEATHER
Last week’s rainfall in Minas Gerais, the state responsible for about 51% of Brazil’s arabica production, measured 8.2 mm, which represents only 32% of the historical average. For the next few days, the forecast is for dry weather for most Arabica regions. The rain will intensify again next Friday.
Source: SOMAR Meteorologia
COVID-19 IN BRAZIL
Brazil faces depletion of ICU beds and daily renewal of death records. On Thursday, over 4,000 deaths were recorded for the second time in 24 hours. Besides intensifying isolation, efforts have been focused on trying to accelerate vaccination. Yesterday was another day with more than 1 million doses applied. New cases are decreasing, with a 16% drop in the variation from two weeks ago.
People who received the first dose: + 22 million (10.47% of the population)
People fully vaccinated: + 6.3 million (3% of the population)
Cases: + 13.28 mi
Deaths: + 345 K
Let’s keep believing and investing in the coffee culture!
Take care,
Atlantica Coffee Team