KCNY (USC/lb)
Min: 123.40 | Max: 128.75 | Last: 123.20
The market started the week with technical falls and pressured by the CECAFE export report, released on Monday. On Thursday, CONAB released its first survey of the 21/22 coffee crop, inciting a drop between 32.4% and 39.1% for Arabica, which pushed up prices. According to the company, the Arabica production area for 2021 presents a reduction of 6.8% over the previous year, totaling 1.76 million hectares, reflecting the climate and farming conditions of 2020.
BRL/USD
Min: 5.2310 | Max: 5.4348 | Last: 5.4680
This week the dollar gained strength with the inauguration of John R. Biden, the new president of the U.S. and possible new monetary stimulus from the world’s largest economy, which brought optimism to the market. In Brazil, COPOM maintained the basic interest rate of the Brazilian economy at 2%, which contributed to the stability of the Brazilian currency.
*numbers until the conclusion of this report
INTERNATIONAL LOGISTICS IN BRAZIL (!)
The lack of food-grade containers with most shipowners and space on vessels is critical and getting much worse. It is of utmost importance that importers put pressure on shipowners to ensure equipment for bookings compliance. Also, sending shipping instructions as early as possible is very important to guarantee bookings.
DOMESTIC MARKET
Prices were high in the domestic market, surpassing BRL 700 for fine coffees. Even with good prices, coffee growers remain very cautious and keeping the domestic market quite calm. Besides being well sold and capitalized, they are waiting for new market highs. Normal flow of operations in warehouses and trucks.
FOB
Export sales were calm and differentials stable, even with high market levels. Fears renewed by the spread of the virus and vaccinations at slower steps than expected, also contribute to the caution of international buyers.
CAFES EXPORTS FROM BRAZIL – CECAFE
In 2020, exports of coffee from Brazil grew by 9.4% compared to the previous year, totaling 44.5 mi bags of 60 kg and USD 5.63 billion in foreign exchange revenue (+10.3% p.a.). The average price per bag in the year was US$ 126.52.
The main destinations were the United States, Germany, Belgium, Italy, Japan, Turkey and Russia, respectively. Arabica green coffee represented 79% of total coffee exports, an increase in volume of 8.4% compared to 2019.
WEATHER
A week of high temperatures and little rainfall in most coffee regions. According to Somar Meteorology, for the next 7 days rainfall is forecast below historical averages and high temperatures, the latter being typical of summer.
In many producing areas, the availability of water in the soil seems to be sufficient for the coffee tree until the resumption of more voluminous rains in the second half of next week.
COVID-19 IN BRAZIL
The vaccination started in Brazil this week and at least 400 thousand people have already been vaccinated, as health professionals and other priority groups. Despite the good news, the crowds at end-of-year parties and summer vacations have led to an enormous increase in the number of cases and deaths.
Cases: 8,697 M
Deaths: 214,147 k
Recovered: 7,673 M
Let’s keep believing and investing in the coffee culture!
Stay well,
Atlantica Coffee Team