NYSE and BRL/USD
In a week of high volatility in the prices of Arabica and Dollar, the coffee futures market opened the week with an appreciation but soon started technical corrections to the highs of the previous week, operating with devaluation. On Wednesday afternoon, with the news of high inflation in the USA, the markets reacted with a strong rise in the dollar, causing intense falls in the coffee contract’s prices.
Against the macro backdrop, the fundamental factors supported prices, given the difficulties faced by major coffee producers such as Brazil, Colombia in Honduras, and the heated demand with the evolution of world vaccination. This morning, the Arabica opened with a technical devaluation of about 90 points for the main contracts.
June/21: Min: 143.85 | Max: 153.45 | Last: 145.15 USC/lb
BRL/USD: Min: 5.1950| Max: 5.3323 | Last: 5.2610
*Data as of the completion of this report
DOMESTIC MARKET and FOB
The domestic market followed the correction of the highs, bringing back the prices of the type 6/7 hard drink to around R$ 750 to R$ 800, depending on the region. However, producers, very cautious in the marketing of the remaining current crop, are firm in prices mismatched with demand, keeping the market little active.
In export sales, few deals happened. According to Safras & Mercado, 93% of the Arabica 20/21 crop had been sold by May 11, equivalent to 64.53 million bags.
2021/2022 CROP
The harvesting intensifies in the Zona da Mata/Matas de Minas, with some lots of new coffee already available in the market. In the largest coffee-growing region in Brazil, Sul de Minas, harvesting should start in the next two weeks. The prevailing dry weather has been positive for the harvest while compromising the water reserve levels in the soil, which are already below ideal.
COFFEE EXPORTS
According to CECAFE, Brazil’s total coffee exports fell by 8.5% in April compared to the same period last year, which was positive for prices on Tuesday. The 3.3 million bags exported represented the second-best performance for the month in the last 5 years. From July 2020 to April this year, Brazil exported 39.5 million bags, an increase of 16.6% in the crop year compared to the same period of the 19/20 cycle.
The main destinations for Brazilian exports from January to April 2021 were the USA, Germany, Italy, Belgium, and Japan. The highlight was the growth in exports to Arab nations (678 thousand bags +40.5%) and two producing countries (1.026 million bags +62.7%).
The agribusiness exports from Minas Gerais reached in the first 4 of 2021 the best result in 24 years. Coffee represents almost 50% of the exported products from the state, a volume of 10.6 million bags (+24% p.a.). Source: SEAPA
LOGISTICS
The port of Santos has shown a greater backlog of vessels and delays in the opening of gates, generating congestion for the deposit of cargoes in the shipping terminal.
Some shipowners are already overbooked until the end of June, not accepting more bookings. The lack of food-grade containers, port omissions, vessel delays, and postponements, and reduced free time persist. The difficulty is even greater when the destination is in the USA.
Customers, please send your shipping instructions in advance!
COVID-19 IN BRAZIL
People who received the first dose: + 37.7 mi (+17.82% of the population)
Fully vaccinated people: + 18.8 million (8.88% of the population)
Cases: + 15.4 mi
Deaths: + 430 K
Let’s keep believing and investing in the coffee culture!
Take care,
Atlantica Coffee Team