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Weekly report – Brazilian Coffee Market – Nov 15-19, 2021

by Nov 19, 2021Market report0 comments

Siga e ouça no spotify! Novos episódios em português aos sábados pela manhã.


KCNY and dollar
Week of jumps in NY “ICE” and of currency devaluation. During the week NY ICE hit important resistances reaching levels not practiced for about 8 years back. March/22 reached 239.55 usc/lb so far, reflecting several variables such as the revision of the Colombian crop size, the La Ninã, the continuous decrease of the certified stocks, some purchase moves from investors, late fixations, reports of lesser flower fixation and the well-known logistical problems.

• Local cooperatives expect an important decrease, but not yet quantified, for the 22/23 crop size, as an effect of climate issues, especially the drought, which affected the flower fixation;

• According to Cecafé, in October 2021, Brazil exported 3.431.172 bags of 60 kg, which is 23.8% less than in October 2020;

• Bank Itaú revised downwards its projection for the growth of the Gross Domestic Product (GDP) for 2021 from 5% to 4.7%;

• In Brazil, political parties are currently voting and defining candidates for the 2022 elections;

• New lockdowns are starting in European countries in response to the new wave of COVID-19.

March/22: Min: 219,25 | Max: 239,55 | Last: 232.45
BRL/USD: Min: 5.4304| Max: 5.6100 | Last: 5.5910
*Data as of the completion of this report


WEATHER

In November rains, coming from 3 cold fronts, took place so far in all coffee regions. The last cold front, this Thursday, supported rains in Minas Gerais and São Paulo states, volume of rains until now during November/21:

• South of Minas: between 30 and 60 mm;

• Zona da Mata: rains have already exceeded 100 mm in all cities;

• Cerrado: between 20 and 40 mm;

• Garça: between 5 and 10 mm;

• Alta Mogiana: between 5 and 10 mm;

Weather forecast for the next 7 days: The cold front that arrived on 11/18th, last Thursday, should cause moderate rains in the coming days at Cerrado and light rains in all brazilian coffee regions.


DOMESTIC MARKET and FOB

• Domestic market with little liquidity and distorted prices due to the movements of the week, buyers and sellers are still distant. Domestic sellers remain firm on prices, some deals reported during the week.

• Stricly soft running screen: sellers in between R$1.350 and 1.360 for a good cup and for a fine cup in between R$1.400 and 1.420;

• Rio Minas: in between R$ 1.270 and 1.280 for a running screen with 30% of low grades, even with the high prices market has a few sellers only;

• Rio Minas screen 17/18 prices around R$1.430 and screen 15/16 around R$1.400 at the local market;

On the FOB, some demand emerged at the end of the week for group 1. Buyers seek to see updates on the differentials after the highs. Differentials are wider but still not bringing attractiveness. For Rio Minas, buyers do not show an appetite for the updated prices in outright, even with a better differential.


LOGISTICS

The United Nations Agency for Trade and Development (UNCTAD), said yesterday that the high ocean freight tariffs threaten the recovery of the world economy and should increase consumer prices in 2022.

• According to Valor Economico (local newspaper), around 80% of the world trade is carried out by sea;

 • The secretary-general of UNCTAD, Rebeca Grynspan, said in a note that “The current surge in freight rates will have a profound impact on trade and undermine socioeconomic recovery, especially in developing countries, until maritime shipping operations return to normal,”.

 • Importers, concerned about the volume of rolled cargo and delays at ports, are beginning to show interest in paying more expensive freight rates at origin in order to ensure that the shipment takes place. Some contracts being ammended from FOB to CFR with freights 2 or 3 times more expensive than the values negotiated at destination, but with guaranteed bookings and containers.


COVID-19 IN BRAZIL

The brazilian federal government approved this week to extend the third dose of vaccines against covid-19 to the entire population over 18 years old. Previously, the extra dose was restricted to the population over 60 years old.

  • People who received the first dose: 157.474.941 (73,82% of the population)
  • People fully vaccinated: 127.422.765 (59,73% of the population)
  • Cases: + 21.989.459  million
  • Deaths: 612.177

Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team


FRAUD ALERT

Fraudsters have created accounts at the domains atlanticacoffeee.com (with 3 letters “e”), atlanticacoffees (plural) and atlantlcacoffee (using the lowercase of L instead of the letter i) and for the prefixes using the names of our employees, even imitating our signatures. They are quoting coffee, issuing invoices with altered payment data, mostly to banks in Hong Kong, which we are not ours! Please be aware of the sender of the messages and always question instructions to change bank details!

Our only official e-mail domain is: atlanticacoffee.com