KCNY and BRL/USD
During the week H1 oscillated between 115.60 and 124.40. The real operated against the dollar between 5.2840 and 5.4501.
This Friday, after the reopening of the market around the Thanksgiving US holiday, highs above 500 points in KCNY and BRL/USD operates between 5,3249 – 5,3786.
Coffee prices at ICENY reflected production forecasts in Brazil for the next harvest and the persistence of rainfall volumes below the historical average. The fall in the dollar also supported the highs in KCNY, with advances in vaccines against Covid-19 and greater investor hunger for less safe currencies.
Heavy rains marked the week in the Southeast, characteristic of the month of November. However, the cumulative rainfall in the coffee producing regions is still below the historical average for the month which could compromise the 2021/2022 harvest of the world’s largest coffee producer.
According to Somar Meteorology, the rains will return for about two days from Tuesday in Paraná (15 mm), Mogiana (20 mm) and southern Minas Gerais (10 mm).
DOMESTIC MARKET AND FOB
Market not very active, either on the domestic market or on export sales. The producers, worried about the size of the next crop, are more conservative on the future sales of 21/22. The lower business volume is also a reflection of a shorter week, with the market closed on Thursday, for the Thanksgiving holiday in the USA.
In most coffee regions of Brazil, producers carried drastic prunings out this year after the high-volume harvesting. Many coffee growers report waiting for a harvest drop of over 30% next year. There are also difficulties in finding Arabica seedlings in the nurseries, and the unit price is higher than in previous years.
BRAZILIAN EXPORTS – OCTOBER 2020
According to the monthly exports report of Cafés do Brasil released by CECAFÉ, new historical records were registered for the month of October, as shown below:
- 4.1 million bags of 60 kg of coffee of all types (+ 11.5% p.a.);
- 3.3 million 60-kg bags of Arabica coffee (81.4% of the total, +12.4% p.a.);
- Exchange revenue of US$ 509.6 million (+ 8.5% p.a.)
- Exchange revenue in reais of R$ 2.9 billion (+49.4% p.a., the highest revenue of the last 5 years)
INTERNATIONAL LOGISTICS IN BRAZIL
The low availability of space on vessels and the scarcity of standard food containers, including with the large shipowners, continue to be a reality for shipments from Brazil.
The understanding and help by importers in the advance shipment of Shipping Instructions, is paramount so we can carry out bookings in advance, in order to avoid delays in shipments of coffee contracts in Brazilian ports.
Brazil has over 171,000 confirmed deaths and a moving average of 479 (+19%), showing an upward trend. In total, there are 6.2 M cases since the beginning of the pandemic. There are no lockdowns in the country.
This week, the world had a new daily record of deaths from the disease, surpassing 12,700 deaths in 24 hours, totaling 1.4 million lives lost since the beginning of the pandemic.
Some big global economies, like the USA and Germany, announced the possible arrival of vaccine in their countries still in 2020, which brought great excitement to the market.
Lets keep believing and investing in the culture of coffee so together we can keep moving coffee forward!
Atlantica Coffee Team