Weekly report – Brazilian Coffee Market – Aug 23-27, 2021 | Atlantica
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Weekly report – Brazilian Coffee Market – Aug 23-27, 2021

by Aug 27, 2021Market report0 comments

Siga e ouça no spotify! Novos episódios em português aos sábados pela manhã.

KCNY and DOLLAR

In a week of appreciation, the market kept climatic and the contract C December/21 closed the week at 192.20 USC/lb. With the dollar falling and the real stronger, the Brazilian currency operated the week at R$5.20, giving support to coffee quotations.

  • December/21: Min: 180.00 | Max: 194.15 | Last: 192.20 USC/lb
  • BRL/USD: Min: 5.1900| Max: 5.4016 | Last: 5.2041
  • *Data as of the completion of this report

WEATHER

  • A hot and dry air mass brought days of strong heat and low humidity in most of Brazil;
  • The lack of precipitation, low relative humidity and high temperatures are favorable conditions for the coffee leaf miner, a pest that causes defoliation of the plants;
  • There are forecasts of low volume and scattered rains in the next few days in areas of Sao Paulo and Minas Gerais. If confirmed, they may trigger the first Arabica flowering of the 22/23 crop;
  • The forecasts for September are for more significant rains. However, according to SOMAR Meteorologia, conditions are for above average temperatures in the arabica regions, which is worrisome for the crops;
  • Producers are waiting for the return of the rains to determine how to conduct their plantations, especially those affected by frost;
  • In Alta Mogiana our technicians observed signs of water shortage, such as wilting and dry leaves, especially in young crops under 5 years old.

DOMESTIC and FOB MARKET

  • Sporadic business, with very little movement. There is demand from the external market, but supply in the domestic market is short and replacement prices are mismatched;
  • Prices in the domestic market remained high, with offers of bica corrida good cup between R$1030 and 1050, fine cup R$ 1070 to 1100 and sporadic offers of bica de Rio Minas 17/18, closing the week around R$1000;
  • The 21/22 crop, despite low volume, has shown good quality in the cupping profile and short supply of Rio Minas. As for the screen size, it has been similar to that of 2020;
  • The atypical difficulty of replacement in the harvest period may be linked to several factors, such as the 21/22 off-cycle crop with lower production and the moment of caution with future deals, while the impacts of drought and frost in the next crop are still being evaluated, among others;
  • The arabica harvest in Brazil is nearing its end, estimated at about 90%. There are reports of yields below the averages of the last 6 years.

LOGISTICS

There is no prospect of a more optimistic scenario in 2021 for the world port crisis, which affects global supply chains. Logistics companies expect the situation to extend into the first quarter of 2022. Highlights of the week:

  • Spaces on September vessels for the US, Japan and Europe are very scarce and expensive, with most requested bookings confirmed only for shipment from October onwards;
  • China has suspended preventive measures to Covid in the world’s third busiest port after a terminal was shut down for two weeks due to a confirmed case of the disease. In reflex, other ports in China have congested, exacerbating shipping problems due to lack of vessels, containers, and space on docks around the world;
  • The effects of the 1 week-long blockade of the Suez Canal in March of this year are still being felt in international logistics;
  • Many cargo rollover, lack of containers with MSC, Hapag-Lloyd and Hamburg Sud. Other shipowners have low equipment stocks;
  • Sending Shipping Instructions to the exporter on dates very close to the shipment is very risky for reserves.

COVID-19 IN BRAZIL

The moving averages of cases and deaths show stability in Brazil. Young people over 18 are already being vaccinated. Some cities, such as Rio de Janeiro and São Paulo, will start requiring proof of vaccination for entry into some establishments. The Ministry of Health announced the application of the third dose starting September 15 for some risk groups.

  • People who received the first dose: +127,000 (60.02% of the population)
  • Fully vaccinated people: +58.6 million (27.7% of the population)
  • Cases: + 20.67 million
  • Deaths: 577.605 thousand


Let’s keep believing and investing in the coffee culture!
Stay well,
Atlantica Coffee Team

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