KCNY and Currency
During the week, which ends with the celebration of World Coffee Day, there was a lot of volatility in the quotations of coffee on the NY stock exchange and the exchange rate. Signs of tightening of global supply in the short term, the dollar remaining weak and the options expiration for May/23 were factors that contributed to the unstable scenario.
In the exchange rate, the Real appreciated and, therefore, the dollar worked below R$5.00 most of the time, this being the lowest level in the last 10 months. The external scenario is one of a certain optimism regarding inflation control and the expectation that there will be no major adjustments in American interest rates, while in the domestic scenario there is a perception of lower fiscal risk, which is favorable to the Real for foreign investments.
On Wednesday (12), Cecafé published the number of Brazilian exports, which continue to fall, for March/23: 3.088 million 60-kg bags were exported, 19% less than the same period in 2022. This brings the accumulated exports for 2023 to 8.358 million bags.
Certified stocks on the NY exchange closed Thursday (13) at 710,687 60kgs bags, representing a drop of 74,890 bags over the past 30 days. Currently There are no bags awaiting certification.
MAY/23: Min: 181,60 | Max: 199,70 | Last: 195,20
BRL/USD: Min: 4,8920| Max: 5,0930 | Last: 4,9360
*Data as of completion of this report.
WEATHER
The first half of April was marked by rainfall in all coffee-growing regions, as predicted by meteorological models. The warm air mass that was present in previous months started to weaken, allowing for the passage of cold fronts throughout the Southeast of Brazil.
Next Saturday, a cold front is expected to reach the coast of São Paulo, which may result in moderate rainfall in the coffee-growing regions of Matas de Minas and South Minas throughout the week. The forecast for the second half of April still indicates the possibility of significant rainfall in the coffee-growing regions.
Rainfall forecast for the week:
South Minas region: between 40 and 50 mm.
Matas de Minas region: between 40 and 50 mm.
Cerrado region: between 15 and 20 mm.
Alta Mogiana region: between 20 and 25 mm.
Garça region: between 10 and 15 mm.
DOMESTIC MARKET and FOB
With the gains in coffee prices on the New York stock exchange and the appreciation of the Brazilian Real, there have been changes in the selling prices in the domestic market, resulting in numerous reported offers and transactions. These movements have also benefited the FOB market, where exporters were able to offer better differentials for the current crop, leading to increased liquidity in transactions. However, sellers remain cautious and are conducting business according to their specific demand in the short term for replacement.
The selling ideas in the domestic market are as below:
Strictly soft good cup running screen: seller close to R$ 1.100,00
Strictly soft fine cup running screen: seller close to R$ 1.150,00
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$ 1.000,00;
LOGISTICS
Published by the Brazilian Association of the Food Industry, a groundbreaking study by ApexBrasil (the Brazilian Agency for Promotion of Exports and Investments) indicates that the elimination of tariffs resulting from the potential implementation of the agreement between Mercosur and the European Union could create opportunities for Brazilian companies. After two decades of lengthy negotiations, this potential agreement would constitute one of the world’s largest free trade areas, with a combined population of approximately 720 million inhabitants and a GDP of $19.2 trillion in 2021, representing a quarter of the global GDP. Brazilian exporters have once again felt the negative impact of insufficient availability of food grade containers, particularly at the port of Santos. Container stuffing has been canceled and reservations have been transferred. Some buyers have opted to switch shipping lines in FOB sales as a workaround.
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.