CARRYOVER STOCKS SURVEY – MONTESANTO TAVARES GROUP
Following our policy of transparency and sharing important information about the market, major trends and projections with our partners, including crop projections and Brazilian stock positions, as recently done by disclosing our 21/22 crop survey, a study prepared by a specialized company. The Montesanto Tavares Group presents our THE SURVEY OF CARRYOVER STOCKS OF BRAZILIAN COFFEES.
The numbers represent the position of Arabica coffee on April 30th., 2021 and Conilon on March 31st., 2021 respectively. The same company prepared this information, using data collected in various regions, technical and scientific criteria, which presented the following conclusion:
- Carryover stocks in Brazil in the year of 2021, mainly related to coffee harvested in the 20/21 harvest, were positively surprising by presenting a volume of 23.1 million bags, 31.4% higher than the stocks collected in the same period in 2020.
- From this total, we have 19.4 million bags of arabica, which represents 44.9% more than the survey carried out in the same period in 2020, and 3.7 million bags of conilon, 11.4% less than the survey in 2020.
These numbers led us to conclude that although the projected 21/22 crop is significantly lower than the 20/21 of Arabica coffee, there will be no problems for Brazil to meet the great global coffee demand.
NYSE and BRL/USD
In a week of mixed oscillations, the market followed the resumption of rain forecasts in Brazil and the situation in Colombia that remains complicated and already affects the shipments of coffee from the country, the world’s second largest producer of Arabica. The consumption of coffee in the U.S. is increasing, and the U.S. is resorting to Brazilian coffee to meet the high demand. Certified stocks of Arabica on ICE increased by 38.6 thousand bags to 2.125 million bags.
The fall of the dollar in most emerging markets supported the strengthening of the Brazilian Real, which returned to operate at around R$5. The improvement of the Brazilian currency reflects the improvement in economic activity, which helps to improve fiscal indicators and boosts the rise in commodity prices.
September/21: Min: 158.00| Max: 165.50 | Last: 157.55 USC/lb
BRL/USD: Min: 5.0188| Max: 5.1386 | Last: [5.1260]5.1260
*Data as of the completion of this report
WEATHER
Throughout the week, there were frequent rains in the producing cities of Minas Gerais, Sao Paulo and Parana. According to Somar meteorologia, between today and Monday rain is forecast for Sao Paulo, South of Minas Gerais, Zona Mata, Espirito Santo and Cerrado.
With the advance of cold air mass to the continent, there is forecast of cold up to 6°C in Parana and 9°C in Varginha -MG next Monday, but without risk of frost.
CROP
In general, the coffee plants show good vegetative vigor, without signs of hydric stress, with good productive potential for the 22/23 harvest. The Zona da Mata region is more advanced in harvesting, representing most of the fresh coffees available, with an average of 5% of borers. In Sul de Minas, harvesting intensifies in the coming weeks. The expected start of harvesting in most Cerrado plantations is for the end of June.
DOMESTIC MARKET AND FOB EXPORTS
Producers remain firm on prices for the new crop 21/22, around R$830-840, varying with the region. FOB demand is tight, with price ideas very discrepant from the domestic market price, making new business difficult, especially for Rio Minas.
LOGISTICS
The situation with shipments to the USA ports is critical (there is great congestion in the port of Oakland) and Cartagena – Colombia. To these destinations, practically all the shipowners have already committed vessels for June and July. The August ships are still closed for new bookings;
- Great difficulty in getting food-grade containers, especially with Hapag Lloyd and CMA CGM;
- Delays and vessel roll-overs happen daily. This week we noticed a higher frequency of these events with MSC;
- Atlantica will not ship its contracts in containers of categories other than food-grade, maintaining our commitment to the quality and food safety of our coffees;
- There are few windows for container storage;
- The truck drivers’ strike at the Port of Santos did not impact Atlantica Coffee’s coffee export operations.
- From June, Hamburg Sud (see note) and Hapag Lloyd (see note) will charge a bookings cancellation fee for shipments from Brazil ;
The delays and rollovers of the vessels are generating many extra costs for the Atlantica Coffee operation. We ask our customers to reinforce with the shipowners the commitment to the bookings contracted. We also ask them to send the Shipping Instructions as soon as possible. We reiterate that our team is at your disposal to inform you in advance of the date of readiness and POL of your contracts, in the event that you prefer to proceed with the booking directly.
COVID-19 IN BRAZIL
People who received the first dose: 52,790 mi (25% of the population)
Fully vaccinated people: + 23,520 mi (11% of the population)
Cases: + 17.2 million
Deaths: 482,135 K
Let’s keep believing and investing in the coffee culture!
Take care,
Atlantica Coffee Team