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+55 31 98258-7114
Av. Princesa do Sul, 1885 | B. Rezende,
Varginha, MG, Brazil | ZC: 37062-447
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Weekly report – Brazilian Coffee Market – December 02nd ~ 06th, 2024

by Dec 6, 2024Market report0 comments

KCNY AND CURRENCY

This week, coffee prices on the NY exchange continued to exhibit the volatility seen previously, with a total fluctuation of 4,165 points—an even wider range than last week. Monday (02) was marked by a 6.9% drop compared to last week’s close, but throughout the week, prices gradually recovered to levels seen the previous Friday, peaking today (06) at $331.70 cents/lb. 

Additionally, the resistance to negotiations observed in the trading hubs has supported market increases. At the same time, Vietnam revised its 24/25 production estimate upward to 28 million bags, 1 million more than the previous forecast. 

Prices for the March/25 expiry date since 01/01/24. Source: Barchart. 

In the context of the dollar, exchange rates fluctuated above and below R$6.00, with a peak at R$6.0950 and a low of R$5.9602. Last Saturday, U.S. President-elect Donald Trump demanded that BRICS members commit not to create or support currencies intended to replace the dollar, threatening tariffs as a consequence. 

During the week, Finance Minister Fernando Haddad criticized the market’s reception of the fiscal package announced the previous week, arguing that the measures are sufficient for the current situation. Nevertheless, skepticism surrounding the fiscal package has limited the depreciation of the U.S. dollar against the real. The House of Representatives approved the urgency regime for the proposed spending containment measures, expediting the process. 

This Friday (06), the U.S. jobs report was released, showing the creation of 227,000 non-farm jobs, exceeding previous forecasts. Next week, the Monetary Policy Committee (Copom) will meet to discuss and decide the direction of Brazil’s monetary policy. 

On Monday (02), the Commodity Futures Trading Commission (CFTC) released its Trader Positioning Report for the week ending Tuesday (26), showing a reduction in long positions by 1,021 contracts, resulting in a net balance of 39,729 long contracts. 

Certified stocks ended this Friday (06) totaling 905,831 60kg bags, slightly over 5,000 bags more than last Friday, with 106,133 bags still pending approval. 

 
March/25: Min: 290.05 | Max: 331.70 | Last: 330.25  
BRL/USD: Min: 5.9602 | Max: 6.0950 | Last: 6.0814 

*Data up to the finalization of this report  


WEATHER

December began with rainfall across all coffee-growing regions, with accumulations exceeding 70 mm. 

The weekend will feature partly cloudy skies; however, a new cold front is expected to reach the Southeast region starting Monday (09), bringing moderate rainfall throughout the week across all coffee areas. 

Rain forecast for the week:  

South Minas region: between 40 and 50 mm.  

Zona da Mata region: between 40 and 50 mm. 

Cerrado region: between 30 and 40 mm. 

Alta Mogiana region: between 40 and 50 mm. 

Garça region: between 30 and 40 mm. 


DOMESTIC MARKET AND FOB

Despite the market’s decline at the beginning of the week, the FOB and domestic markets remain stalled, reflecting the sharp fluctuations and instability of the NY ICE. In the domestic market, in addition to volatility and expectations of high prices, the fiscal year-end period further hampers activity, discouraging new business. 

The requests from sellers in the domestic are as below: 

  • Strictly soft good cup running screen around R$ 2,100.00 
  • Strictly soft fine cup running screen up to R$ 2,200.00 
  • Rio Minas running screen around R$ 1,900.00 
  • 600 defects around R$ 1,950.00 

LOGISTICS

Brazilian ports are once again facing low stocks of food-grade containers, including 40-foot units, causing disruptions to some shipping schedules. 

Frequent changes in vessel arrival and operation schedules have led to missed warehouse stuffing appointments, with some shipments unable to be rescheduled due to limited availability, resulting in cancellations. 

  • A Centronave report warns that inadequate port infrastructure in Brazil could hinder the use of new container ships from 2026, potentially causing annual losses of over $20 billion and undermining the country’s competitiveness in global trade. Urgent investments in infrastructure are critical to mitigate these impacts. (Source: Agrimidia) 
  • Coffee producers are struggling with significant logistical challenges due to outdated port infrastructure, which has failed to keep pace with agribusiness growth. The Port of Santos, responsible for 67.4% of exports, reported delays in 74% of operations, while the Rio de Janeiro port complex faced delays in 70% of vessels. (Source: Agroemcampo) 

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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.