KCNY and Currency
The NY “ICE” market maintained its volatility during the week. The predominant upward movement in commodities, including coffee, reflected the general devaluation of the dollar.
- Reuters attributed the depreciation of the dollar to better expectations of a possible easing of China’s zero-Covid policy;
- According to Bloomberg, Vietnam’s coffee exports increased by 2.6% when compared to the same period a year ago;
- Also reported by Bloomberg, coffee exports from Honduras in November fell by approximately 26% when compared to the same period last year;
- The NY “ICE” certified stock closed Thursday at 605,192 60-kg bags;
- According to data from Container Trade Statistics, demand for containers in September fell by 8.6%, reaching the lowest level since February of this year. It is important to note that September is generally a month of accelerated trade. This drop reflects increased stocks in the destination countries against a decrease in consumption in general, allowing a reduction in freight rates after a considerable increase in the last two years;
- According to Davi Fiss, from Kantar, coffee consumption in Brazil had a slight growth of 1.1% in 2022. Given the fears of decreasing consumption, it has been noticed that there is a search for more accessible and economical brands;
- According to a report from the Commoditiy Futures Trading Commission (CFTC), funds increased their short position by 1,076 lots to 24,453;
MARCH/23: Min: 160,05 | Max: 174,35 | Last: 164,00
BRL/USD: Min: 5,1637 | Max: 5,4301 | Last: 5,1800
*Data as of completion of this report.
WEATHER
Due to the action of the La Niña phenomenon, a higher frequency of cold fronts was observed in Minas Gerais in November, especially in the northern, central and Zona da Mata regions.
Rainfall was above the historical average in the Zona da Mata (45% above average) and Cerrado (18% above average) coffee regions, and below average in the South Minas (58% below average), Mogiana (64% below average) and Garça (19% below average) coffee regions.
Rain forecast for the week:
South Minas region: between 50 and 60 mm.
Zona da Mata region: between 50 and 60 mm.
Cerrado region: between 50 and 60 mm.
Alta Mogiana region: between 50 and 60 mm.
Garça region: between 40 and 50 mm.
DOMESTIC MARKET and FOB
The FOB market had low liquidity during the week. There was demand in volume for good cups, fine cups and semi-washed for shipment throughout the whole year of 2023. However, exporters do not feel like offering differentials that are attractive to the buyers.
In the domestic market, some business has been reported, but producers and sellers remain firm on prices, maintaining low liquidity.
The expectation is that after the new year there will be more opportunities for business and liquidity.
Strictly soft good cup running screen: close to R$ 1.000,00
Strictly soft fine cup running screen: close to R$ 1.040,00
Rio Minas:
17/18: R$ 1.040,00
14/16: R$ 1.020,00
Running screen with 30% low grades: close to R$ 900,00
600 defects: close to R$ 930,00;
*The price bases mentioned above are the buyer’s ideas, the market is short of sellers and no trades reported on these bases.
LOGISTICS
Some shipowners are already out of space remaining for 2022 on routes to Europe. We are already receiving booking confirmations for January 2023.
Standard food container stocks are still in short supply. Again, we have been negatively affected by cancelled schedules.
Some shipments of cargoes had also been delayed due to cargo cuts and lack of stopover at the Port of Itaguaí-RJ.
COVID-19 IN BRAZIL
People who received the first dose: +182.184.894
Fully vaccinated people: +172.203.727
Cases: + 35.336.482
Deaths: 689.998 thousand
Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team