NYSE and BRL/USD
This week, Arabica coffee contracts hit highs not seen since November 2016. On Friday, the July/21 contract surpassed 163 USC/LB, accumulating more than 700 points of high in one day.
Among the factors that supported the highs were concerns about the water crisis in Brazil, the falling dollar, and appreciation of the Brazilian real, which returned to trading at R$5.22 due to macro factors. The situation in Colombia and the expectation of a heated demand in the second semester also contributed. In Franca, an important Brazilian coffee hub, the economic activities were suspended until June 10th as a measure to contain a new outbreak of Covid in the city.
July/21: Min: 147.45 | Max: 163.15 | Last: 162.70 USC/lb
BRL/USD: Min: 5.22| Max: 5.374 | Last: 5.2240
*Data as of the completion of this report
WEATHER
With the low volume of rainfall since October/21 and expected to remain so, the government issued on Friday, for the first time in 111 years, the confirmation of a water emergency alert from June to September for 5 Brazilian states, which includes Minas Gerais, Sao Paulo, and Parana. The accumulated amount for the month of May should close at 27 mm, being the historical average of 98 mm for the month.
HOLIDAY – NY STOCK EXCHANGE
Next Monday (May 31), due to the Memorial Day holiday in the USA, the NYSE will be closed and will reopen on Tuesday. B3 operates normally on Monday.
LOGISTICS
The lack of space on ships and standard food containers in Brazil has already become routine during the pandemic and in our reports. But it is important to be aware:
- The difficulty of accomplishing deadlines in the Port of Santos is even greater, where gate opening dates at the shipment yard are very close to the cargo’s cut-off, with a limited amount of windows.
- The lack of food-grade containers is so critical in Brazil that some shipowners are releasing general cargo containers for food shipments. Atlantica will not allow its contracts to be shipped in units of this category, maintaining our commitment to the quality and food safety of our coffees.
- As of June, Hamburg Sud (see note) and Hapag Lloyd (see note) will charge a bookings cancellation fee for shipments from Brazil ;
In view of this scenario, we ask customers to send their Shipping Instructions as soon as possible. We reiterate that our team is available to inform you in advance of the readiness date and POL of your contracts, in the event that you prefer to proceed with obtaining the place reservation directly.
COVID-19 IN BRAZIL
Vaccinations are progressing in Brazil, with more than 10% of the population fully vaccinated and 21% who have received their first dose. Meanwhile, domestic political tensions are intensifying as the Covid CPI investigations advance into the Brazilian government’s conduct in combating the pandemic.
People who received the first dose: 44 million (+20.75% of the population)
Fully vaccinated people: + 21.6 million (10.22% of the population)
Cases: + 15.9 million
Deaths: + 444 K
Let’s keep believing and investing in the coffee culture!
Take care,
Atlantica Coffee Team