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Weekly report – Brazilian Coffee Market – June 27 ~ July 01, 2022

by Jul 1, 2022Market report0 comments


KCNY and Currency

It was a week of high volatility on the NY “ICE”. The large reduction in certified stocks available in Europe gave strength to the bullish movement of quotations. The Real is weakening due to the risk of recession and inflation in the external scenario. In the domestic scenario, we had the approval of the fuel Proposed Amendment to the Constitution, releasing R$ 41.25 billion in aid, causing concern among investors with the fiscal issue.

• According to CEPEA data, the coffee harvest in Brazil is starting to gain speed, however the business volume in the market is still below the level expected for the period of the year;

• According to a Rabobank report, there was a 0.6% increase in coffee demand compared to the first trimester of 2020. If compared to 2021, the demand increased in the United Kingdom by 9%, the United States by 4.6%, and Japan by 5.1%. However, demand still remains lower than in pre-pandemic times;

• Still according to Rabobank’s estimate, the global coffee supply balance in the 22/23 crop goes from a deficit of 5.1 million 60kg bags in 21/22 to a surplus of 1.7 million;

• NY “ICE” certified stocks closed Thursday at 887,431 60-kg bags;

• According to Bloomberg, as of Thursday’s close, NY “ICE” certified stocks are the lowest since January 2000;

SEPTEMBER/22: Min: 217,10 | Max: 236,05 | Last: 231,50
BRL/USD: Min: 5,1757 | Max: 5,3300 | Last: 5,3190
*Data as of the completion of this report


WEATHER

Historically, the month of June is not a rainy month in Brazil, but a cold one. When it does rain, it is isolated, usually in the southeast, and with low intensity.

In this year, there was 0.4 mm in the Zona da Mata and no precipitation in the South Minas, Cerrado and Mogiana regions. In the region of Garça, the cold front that remained partially stationary between São Paulo and Paraná, ended up getting 20 to 22 mm of rain. As predicted, the polar air mass that arrived in recent days in the Southeast region had low intensity and there was no occurrence of frost.

For the next week, a dry continental air mass will act in all coffee regions, with an absence of cloudiness and mild temperatures. The weather models show that a new polar air mass should only arrive in the second half of the month and it could cause a sharp decline in temperatures.

No rain is forecast for the week.


DOMESTIC MARKET and FOB

The local market shows very low liquidity and the FOB with almost no demand during the week.

Strictly soft good cup running screen: seller close to R$1.320,00;
Strictly soft fine cup running screen: seller close to R$ 1.400,00;
Rio Minas:
17/18: R$ 1.280,00
14/16: R$ 1.230,00
Running screen with 30% low grades: close to R$ 1.180,00;
600 defects: buyer close to R$ 1.250,00.


LOGISTICS

In Brazil, Customs and the Ministry of Agriculture continue to work on a reduced scale due to a strike, causing delays in the release of processes and the issuance of phytosanitary certificates.

There is a lot of difficulty in the removal of containers and the releases by the ship owners are delayed, sometimes after the draft deadline. Bookings and ship rollovers are occurring with some frequency and there is moderate difficulty in confirming bookings, depending on the destination and the shipowner.


COVID-19 IN BRAZIL

People who received the first dose: +179.025.100 (89.44 % of the population able to take the vaccine / 83.33% of the total population)

Fully vaccinated people: +167.326.724 (83.6% of the population able to take the vaccine / 77.89% of the total population)

Cases: + 32.358.451 million
Deaths: 671.466 thousand

Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team


FRAUD ALERT

Fraudsters have created accounts at the domains atlanticacoffeee.com (with 3 letters “e”), atlanticacoffees (plural) and atlantlcacoffee (using the lowercase of L instead of the letter i) and for the prefixes using the names of our employees, even imitating our signatures. They are quoting coffee, issuing invoices with altered payment data, mostly to banks in Hong Kong, which we are not ours! Please be aware of the sender of the messages and always question instructions to change bank details!

Our only official e-mail domain is: atlanticacoffee.com