KCNY and BRL / USD
During the week KCH1 oscillated between 104.85 and 110.4 and the BRL / USD was traded between 5.3970 and 5.7660, markets experienced a lot of oscillation mainly in view of the expectations of the North American election results. The new wave of COVID-19 and lock-down needs continue to concern Europe and the markets with regard to recovery of economies.
As of October 5th, Covid-19 cases in Brazil reached a total of 5.614.258 with a total of 161.779 deaths. 23.317 new cases in the last 24 hours. Statistics for the past 7 days show a moving average of 392 deaths per day, 11% lower compared to the previous week. 609 deaths in the last 24 hours. In Brazil, the State of São Paulo is the state with more cases and deaths. Rio de Janeiro the second in deaths and Minas Gerais the second in contamination.
INTERNATIONAL LOGISTICS IN BRAZIL
The local warehouses are still very busy with receiving, storing and processing coffee. In addition, concerning international logistics, the situation has not improved so far. The difficulties faced in terms of availability of vessels and containers are mainly for the United States. We reinforce that an important strategy to mitigate part of these difficulties is to act in advance.
Between the 26th and 29th of October, our team of agronomists talked to 45 partner producers from the regions of Matas de Minas, South of Minas, North and Chapadas de Minas, Cerrado, and Mogiana. Each of the regions with their specificities for this harvest, but we summarize the perceptions of our producers about the areas in which they operate.
In Matas de Minas there were 2 more relevant flowerings and in some regions, there was a third. The second flowering was the most representative in terms of production for the 21/22 harvest. There was no water deficit, good rainfall throughout the year. New trees in good condition, the others worn out by the high volume produced in the 20/21 harvest.
In the South of Minas, there were 3 flowerings with more vigorous flowers in new or pruned crops. Producers shared about the large water deficit that can compromise the set-up. Some regions of the South of Minas, went through about 120 days of drought, October rains between 10 and 90 mm depending on the location. The average temperature of the last 60 days was 23.6 ° C with a historical average for the same period of 22.2 °C according to INMET.
In the North and Chapadas de Minas the main flowering, which represents 65% of the region’s production, occurred at the end of last week. There was no water deficit for the year, rains of 100mm in the last 7 days.
In Cerrado, three flowerings were reported. Even with irrigated crops, the lack of rain and high temperatures raise concerns about the picking of fruits for some of our partner producers. In October there were 170 mm of rain, however, some producers report a water deficit of up to 150 days.
In Mogiana the flowering was very irregular due to the lack of rain in the region, aggravated by high temperatures. Producers reported between 5 and 90 mm depending on the region. The average temperature in the last 60 days was 25.7 °C against the historical average for the same period of 23.5 °C according to INMET.
In all the regions mentioned above, except the North and Chapadas de Minas, crops that were worn out by the volume produced in the year 20/21 were reported, of course depending on whether this is a new crop or not, and also on the volume of precipitation throughout the year. In the North and Chapadas de Minas, the crops are well leafed and with good vegetative vigor.
DOMESTIC AND FOB MARKET
Domestic market was not active, some businesses reported, but in low volumes. Coffee growers are well capitalized and towards the end of the year, they are less interested on new business at the current prices. On the FOB, the week was of many quotations for January/21 and future crops but only a few deals, importers are expecting wider differentials.
Lets keep believing and investing in the culture of coffee so together we can keep moving coffee forward!
Atlantica Coffee Team