NYSE and BRL/USD
In the last week of April, Arabica prices soared to levels not seen since 2017, with KCN1 registering 147.65 USC/lb on Thursday (29), an appreciation of about 20% between the first and penultimate day of the month.
The bullish boom was influenced by the macro environment with a weakened dollar, strong appreciation of the Brazilian real, optimism with demand due to the reopening of trade and economic recovery in major consumers such as the US, UK, and France, and the estimates of a deficit in the Brazilian 21/22 crop – which have been reinforced daily by drier than normal weather. ICE-certified stocks of Arabica increased by 4270 bags on Thursday, following the trend of recent sessions, taking stocks to the highest level since April last year.
June/21: Min: 137.50 | Max: 147.65 | Last: 142.45 USC/lb
BRL/USD: Min: 5.3293| Max: 5.4897 | Last: 5.4220
*Data as of the completion of this report
WEATHER
The volume of rainfall recorded in April was below the historical average for the month. According to Somar Meteorologia, the forecast is still for dry weather in the next 7 days for most coffee regions, with rains expected only in southern Espírito Santo (10mm) and Bahia (30mm).
DOMESTIC MARKET
A very slow week in the domestic market. Even with attractive prices, above BRL 750, the strong hike in NY and concern about the water deficit in crops kept producers cautious in selling their production, believing in more significant increases in the coming days.
The FOB demand was heated this week for certified coffees from June/21. Also, there were some B2B deals.
LOGISTICS
Every day we face several problems in the maritime market, such as the lack of standard food containers, reduction of shipping routes, lack of space on vessels, port omissions, delays, and postponements of vessels. As a mitigating measure, shipowners have significantly reduced free time in ports. In addition, they have taken the alternative of immediately confirming bookings for the second half of May.
We therefore ask our customers to urgently send their shipping instructions in advance, so that we can secure space on vessels and fulfill the May and June shipments. It is also important that you share with shipowners, all these challenges faced by the coffee industry so that they can develop better solutions.
CROP 21/22
Normal pace of harvesting in the lower and warmer areas of Matas de Minas/Zona da Mata. In May, most properties will start harvesting in the other regions, with greater intensity in the second half of the month. The crops are vigorous, with good vegetative development, which will contribute to the 2022 harvest, an on-cycle year.
COVID-19 IN BRAZIL
During this week, the Covid numbers have been trending downwards in Brazil. However, yesterday we reached the sad mark of 400,000 deaths from the disease, the 2nd country with more deaths and the 3rd with more confirmed cases. Three months after the start of vaccination in Brazil, the country is the 5th in the world that has applied the most doses, and 7% of the population has received full immunization against Covid-19, either from AstraZeneca or CoronaVac.
People who received the first dose: + 31 mi (+14.7% of the population)
People fully vaccinated: + 15.1 mi (7.15% of the population)
Cases: + 14.592 million
Deaths: + 401 K
Let’s keep believing and investing in the coffee culture!
Take care,
Atlantica Coffee Team