Ordem Mínima
+55 31 98258-7114 Av. Princesa do Sul, 1885 | B. Rezende, Varginha, MG, Brazil | ZC: 37062-447
Brazilian Language
  1. Home
  2. /
  3. Market report
  4. /
  5. Weekly report – Brazilian...
  1. Home
  2. /
  3. Market report
  4. /
  5. Weekly report – Brazilian...
  1. Home
  2. /
  3. Market report
  4. /
  5. Weekly report – Brazilian...

Weekly report – Brazilian Coffee Market – July 12-16, 2021

by Jul 16, 2021Market report0 comments

NYSE and BRL/USD
Throughout the week, the Arabica traded with a significant appreciation for the main contracts.

  • The fundamentals were strong, such as the lack of rain in Minas Gerais, the forecast of new frosts in the Brazilian coffee park and the expectation of heated demand with the advance of vaccination in the world.
     
  • According to GCA, USA green coffee stocks fell by almost 36,000 bags to 5.8 million 60-kg bags, near a 6-year low.
     
  • The prices of KCNY fell temporarily on Tuesday, with the disclosure by CECAFE of the new record in Brazilian exports in June, totaling 2.73 million bags, an increase of 0.3% p.a., signaling high supply.
     
  • The exchange rate also supported the commodity’s highs, with the dollar falling amid rising inflation in the U.S., and the Real appreciating against a more optimistic scenario in Brazilian taxation.

September/21: Min: 150.10 | Max: 161.95 | Last: 161.35 USC/lb
BRL/USD: Min: 5.0520| Max: 5.2839 | Last: [5.1106]5.1106
*Data as of the completion of this report

WEATHER
A cold air mass arriving over the weekend brings similar drops in temperatures as at the beginning of the month, but not as cold and with a less range.

  • Between Sunday and Tuesday, temperatures should drop by about 12ºC in Paraná, with strong frosts risk.
     
  • For the south of São Paulo, the forecast is for moderate frost.
     
  • The mass also reaches the Triangulo Mineiro and South of Minas Gerais, with weak frost risk.

DOMESTIC MARKET

The domestic market is more active, following the commodity’s highs.

  • The Arabica Duro type 6/7 was quoted between R$ 800-860 / bag, varying between regions, with emphasis on the high volume of business done in the Zona da Mata.
     
  • The harvest, although a little delayed in relation to previous years, is happening without difficulties with the weather or labor, estimated at 60% in the Zona da Mata, 40% in southern Minas, and 30% in the Cerrado.
     

FOB EXPORT
The FOB export market is not very active, with a demand for coverage by some specific qualities. Buyers are still looking for very aggressive differentials, mismatched with the domestic market offers.

LOGISTICS
The logistics scenario is very uncertain for logistics in the second semester. The tendency is for freight prices to the US and Europe to increase in the last quarter, when demand for ships and containers for agricultural commodities is high. Worth noting:

  • Hapag Lloyd has been the shipowner with the lowest availability of food grade containers, causing bookings to be transferred;
     
  • The difficulties in the port of Rio are more critical than in the port of Santos;
     
  • Shipments to the United States have been extremely difficult. This week, all requests, with all shipowners, were declined due to a lack of space or restrictions in American ports.
     
  • Freight to the US is being quoted at USD 10,000/container. Before the pandemic they were sold at USD 1500;
     
  • The situation also worsens for destinations in Europe, with space on vessels only for the middle of the second half of August;
     
  • Destinations in Japan: some reservations, for smaller lots, have been confirmed for the end of August.

COVID-19 IN BRAZIL
Brazil maintains a downward trend, with about 15% of the population fully vaccinated.

  • People who received the first dose: 87 million (41.11% of the population)
  • Fully vaccinated: +32.6 million (15.4% of the population)
  • Cases: + 19.261 million
  • Deaths: + 539 thousand

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