NYSE and BRL/USD
Throughout this week the price drops of KCNY predominated, pressured by the concern with the short-term demand for coffee in consuming countries. The worsening of the pandemic in European countries implies further isolation and closure of out-of-home consumption outlets.
ICE-certified stocks have fallen by 5910 bags. The increase in long-term demand amid tight stocks and limited supply from Brazil for crop 21 are supporting prices.
The international logistics bottlenecks, with the lack of containers, and space on ships, worry the market. This Friday, the dollar operates with a slight increase with the global market more optimistic. The devalued Real follows a two-week low, contributing to the commodity’s lows.
May/21: Min: 125.20 | Max: 130.60 | Last: 127.90 USC/lb
BRL/USD: Min: 5.4627 | Max: 5.6811 | Last: 5.7220
*Data until the completion of this report.
LOGISTICS
The shortage of food-grade containers has caused major upheavals for exports from Brazil. Hapag Lloyd and MSC have been the most affected by the equipment shortage. This week we observed difficulty with Evergreen as well. As a palliative measure, the shipowners have reduced free times both at origin and at the destination.
The Suez Canal bottleneck caused by the Ever Given vessel running aground may also contribute to the global container hold. In addition, the beans that Europe imports from East Africa and Asia flow through Suez, which includes robusta coffee from Vietnam.
Atlantica has been working with strong logistical and strategic planning in order to mitigate the impacts of this scenario on our clients’ shipments. Bookings in advance have been an important alternative. Therefore, we ask importers to send Shipping Instructions as far in advance as possible and, when negotiating freight with the shipowner, to check for guaranteed equipment.
DOMESTIC MARKET / FOB
A week with low liquidity in the domestic market and for export sales. The falls in NY caused a selling retraction in Brazil, even with the dollar operating at a high level. Some occasional deals matching demand were done to cover open positions. International buyers are afraid of opening differentials due to the high volatility in prices.
WEATHER
A week of hot and dry days in the southeast region and Paraná due to the establishment of an atmospheric blockade which should break in the middle of next week, when also occurs the advance of a cold front, bringing rains. The rains will return with greater intensity over the South of Minas, Baixa Mogiana, Espírito Santo, and Zona da Mata/Matas de Minas with accumulations between 20 mm and 50 mm until Thursday.
COVID-19 IN BRAZIL
On Thursday (25th), Brazil recorded a record of almost 100,000 confirmed cases in 24 hours, accounting for 97,586 new cases. Butantan announced it is developing the first 100% Brazilian-made vaccine against Covid, the Butanvac, which can immunize the population with a single dose. The institute requested Anvisa’s authorization to start clinical trials in April. Currently, two immunizers are used in Brazilian vaccinations: Coronavac and AstraZeneca.
People who received at least one dose: + 12.6 million (6% of the population)
Fully vaccinated people: + 3.9 mi (1.86% of the population)
Cases: + 12.3 mi
Deaths: + 303 K
Recovered: + 10.8 mi
Let’s keep believing and investing in the coffee culture!
Stay well,
Atlantica Coffee Team