KCNY and BRL/USD
During the week, the KCH1 accumulated drops of over 700 points. At the beginning of the week, H1 registered 124.45 usc/lb, following November highs, but suffered significant falls, reaching a minimum of 117.20 usc/lb on Wednesday, after movements to make profits in KCNY.
In the first 3 days of December, the real appreciated over 4% against the USD, being quoted between 5,3968 and 5,1205, renewing on Thursday the minimum of 4 months. The numbers reflect the global weakening of the dollar and optimism in investors’ feelings towards Brazil. Until the moment of finalizing this report, the commercial dollar is quoted at 5.1390 and H1 @120.05.
The producing regions registered in November rainfall indices below historical averages, as also seen in the previous 6 months. However, December arrived, bringing rainfall to the main coffee regions in the Southeast. Rainfall is expected to intensify in the coming days with a cold front, bringing extensive and persistent rainfall, according to SOMAR Meteorology.
Forecasts have put pressure on the sharp drops in KCNY prices recorded this week. The rains favor the recovery of depleted crops, with the emission of new leaves and sprouts. For crops with productive potential for 2021, the beginning of the formation of “chumbinhos” is already observed.
DOMESTIC MARKET AND FOB
Until the end of November, the producers were not very eager in doing business on the market levels, but in the last days of the month, with the advance of future prices, some business was done in the domestic market for delivery in 2022, calming down again after the significant drops in the market.
There is little interest in delivery in 2021, considering the expectation of the producers of having a significant crop drop next year. Many producers are waiting for a greater market valuation to sell their production. With the receipt of the record 20/21 crop, the general warehouses operate close to maximum capacity.
Regarding FOB demand, many importers report doing good business in the previous months, with no need to increase their stocks now, keeping sales to the foreign market low. There is low liquidity on both sides, increasing the distance between the buying and selling base.
GREEN COFFEE EXPORTS – NOV. 2020
According to data from the Ministry of Economy released on Tuesday, Brazil registered in November 2020a new record for monthly exports of green/raw coffee, totaling 4.6 million 60-kg bags (+ 39.5% p.a.). The CECAFE report for month 11 has not yet been released.
INTERNATIONAL LOGISTICS IN BRAZIL
Space on ships and availability of food-grade containers are still very disputed in Brazilian exports, and it is essential, therefore, that importers send shipping instructions as soon as possible.
COVID-19 IN BRAZIL
Cases: 6,49 M
Deaths: 175 K
Recovered: 5.73 M
Lets keep believing and investing in the culture of coffee so together we can keep moving coffee forward!
Atlantica Coffee Team