KCNY and Currency
Coffee prices in New York Market remained volatile during the week as expectations for data releases from world economies continued. With a volatility of 890 points, the range of the week was between 156.00 and 164.90 cents per pound.
According to Cecafé’s monthly statistical report, Brazil exported 2.991 million 60kg bags in July 2023. This volume represents a growth of 18.7% compared to the same period of the previous year. With emphasis on Conilon coffee, which represented a volume of around 505 thousand bags. In 2023, the United States remains the main importer of Brazilian coffee, but with a lower percentage compared to the volume of the same period in 2022.
In the domestic scenario, after the beginning of the interest rate reduction cycle last week, changes in the text of the fiscal framework are being discussed, and the expectation is that the government will need to further increase revenue in order to zero the primary deficit of 2024.
In addition, the market waited for the new minutes of the Copom, which indicates future signals about the cycle of interest rate cuts. The minutes, released on Tuesday, predicted further cuts in the interest rate given the outlook for inflation improvement. However, this Friday inflation data were released, and came in above expectations, up 0.12% year-on-year. The projections reported in the Focus Bulletin show that the IPCA (Extended National Consumer Price Index.) should end the year above the target estimated by the Central Bank.
Inflation data from the United States were released on Thursday and came within the expectations projected by the market, indicating that there may be a new discussion on whether there will be a pause in the interest rate increase by the FED.
Certified coffee stocks closed Thursday at 520,869 60-kg bags, with 1,299 bags up for approval. Honduras and Brazil remain in their positions of origin with the highest volume of certified coffee last week: 1st and 2nd place, with 337,760 and 157,467 60kg bags respectively.
SEPTEMBER/23: Min: 156.00 | Max: 164.90 | Last: 157.70
BRL/USD: Min: 4.8416 | Max: 4.9410 | Last: 4.8891
*Data as of the completion of this report.
WEATHER
Between Tuesday and Wednesday of this week, light rains were observed in some municipalities in the coffee regions of Northern Espírito Santo, Southern Bahia and the Zona da Mata. The circulation of the air mass that came behind the cold front – that passed along the coast of the Southeast region – is what was responsible for the increase in cloudiness in the regions.
A new cold front is expected to pass along the coast of the Southeast region from Sunday. The frontal system arrives with weak intensity and may only cause increased cloudiness in South Minas and the Zona da Mata between Sunday and Wednesday. Temperatures are expected to remain high in all Brazilian coffee growing regions in the coming days.
There is no rain forecast for the week.
DOMESTIC MARKET and FOB
The NY ICE movements have rattled the market a bit during the week, although the expectation is still not close to reality. Occasional trades were reported, but nothing significant.
In the domestic market, liquidity was still low, and few over-the-counter offers left the market stuck.
The requests from sellers in the domestic are as below:
Strictly soft good cup running screen: seller close to R$ 850,00
Strictly soft fine cup running screen: seller close to R$ 900,00
Rio Minas: Running screen with 25% low grades close to R$ 750,00
600 defects: close to R$ 720,00;
LOGISTICS
The A Tribuna portal reports that the concession contract for the Northern section of the Rodoanel was signed on August 9. The agreement was established between the State Government and the Via Appia consortium, which emerged as the winner of the auction held on March 14 in the city of São Paulo. Via Appia will assume responsibility for completing the project, which is estimated to be worth R$3.4 billion. Additionally, the consortium will be in charge of the maintenance and operation of the stretch for the next 31 years.
Under the agreement, the consortium will have up to one year to develop a revised engineering project to continue the initiative. This venture has the potential to have a positive impact on cargo transportation to the Port of Santos. The construction phase is expected to take about two years, although the state government intends to advance the schedule as much as possible.
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.