NYSE and BRL X USD
The Arabica futures market, after opening the week down and reaching 126.60 cents/lb, recovered to around 133 cents/lb with the macro support and optimism regarding the resumption of demand in the USA. The BRL had significant depreciation at the beginning of the week, reaching R$5.87, but recovered part of the losses, giving support to the KCNY prices.
The Brazilian scenario was marked by strong political tension with the annulment on Monday of the charges of Lula, a former president of Brazil, who returned to the status of eligible, creating a possible extremely polarized scenario in the 2022 presidential elections. The approval at the end of the week of fiscal mechanisms to avoid the lack of control of public spending for the resumption of the emergency PEC during the pandemic and the intervention of the Central Bank brought more security to investors.
March/21: Min: 126.60 | Max: 133.20 | Last: 132.30 USC/lb
BRL/USD: Min: 5.5248 | Max: 5.8785 | Last: 5.5610
*Data until the completion of this report.
CECAFE – FEBRUARY EXPORTS
According to data from CECAFE released on Tuesday, total Brazilian coffee exports increased by 9% (y/y) in February to 3.3 million bags. The foreign exchange revenue generated was USD 423.7 mi (+4.7% y/y) and BRL 2.3 bi (+30.6% y/y)
BRAZIL’S GDP
Brazil’s agribusiness GDP increased by 24.3% in 2020, representing over 1/4 of the country’s economy. Record crops, high prices driven by the devaluation of the Real and poor performance of other sectors during the pandemic are some factors that contributed to the expansion of the sector’s participation.
DOMESTIC MARKET
The domestic market continues with firm prices and little activity. A week of some business generated for export but still low demand from importers.
LOGISTICS
The lack of food-grade containers continues to be a daily challenge for Brazilian exports, as well as the omission and changes of vessels. We ask importers to send the shipping instructions of their contracts as early as possible, in order to ensure the smooth flow of their shipments.
COVID-19 IN BRAZIL
The pandemic completed 1 year this Thursday, when 2,207 deaths by Covid were also registered in 24 hours in Brazil. We are over 50 days with a moving average of deaths above 1,000. The state of Sao Paulo has announced it has entered an emergency phase, extending restrictions and inspections, which may extend until the end of March.
Vaccinated since Jan 17: + 9.29 mil
Percent of population vaccinated: 4.39%
Cases: + 11.3 mi
Deaths: + 273 K
Recovered: + 9.98 mi
Let’s keep believing and investing in the coffee culture!
Stay well,
Atlantica Coffee Team