Weekly report – Brazilian Coffee Market – Oct 04-08, 2021 | Atlantica
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+55 31 98258-7114 Av. Princesa do Sul, 1885 | B. Rezende, Varginha, MG, Brazil | ZC: 37062-447

Weekly report – Brazilian Coffee Market – Oct 04-08, 2021

by Oct 8, 2021Market report0 comments

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


KCNY and dollar

  • After a long period of a predominantly bullish market, coffee started the week at a low, readjusting prices with the resumption of heavy rains in Brazil and news of higher production in Colombia. Prices rebounded sharply at the end of the week, with a sharp drop in U.S. stocks of Arabica and Robusta coffee and reduced expectations of an ICO surplus.
  • On Thursday, the Arabica market rose 445 points, oscillating the day between 193.80 and 200.25 c/lb. On Friday, it opened higher by over 100 points, ending the week with an adjustment of KCZ1 at 201,35 usc/lc ;
  • The fall of 138,241 bags between Monday and Thursday in certified stocks of Arabica GCA to 1.9 million bags, may indicate a greater attractiveness of stocks at the destination in relation to direct purchases at origin, given the international logistical constraints and high spot coffee prices and/or more heated consumer demand, a bullish factor;
  • The ICO is betting on an increase in global coffee consumption to 167.26 million bags (+240 K) and has reduced the estimate of a coffee surplus of 2.63 million bags to 2.39 million bags;
  • Next Friday, another GCA stock report will be released and together with the rains in Brazil should be a determining factor in price formation;
  • Due to the national holiday, we will be closed on October 11 and 12, resuming activities on Wednesday. Many companies in Brazil will be closed during this period, so it should be a week of few businesses in the country;
  • With the stronger dollar and the political tension in Brazil, the Real has weakened and returned to the R$5.50 level.

December/21: Min: 191.30 | Max: 206.85 | Change: 201.35 USC/lb
BRL/USD: Min: 5.3738 | Max: 5.5369 | Last: 5.5200
*Data as of the completion of this report


WEATHER

  • Many heavy rains in this first week of October in several coffee areas;
  • Despite the drought relief, it is still necessary to have a lot of rain to replenish the moisture levels of the soil and plant;
  • More rain is forecast for the weekend;
  • Optimism in relation to heavy and consistent rains in October contributes to the fall in coffee prices;

CROP

Matas de Minas (Zona da Mata region of Minas Gerais): After the rains, we had a very encouraging and apparently vigorous second flowering opening. It is important to note that, although the good bloom by itself gives the impression of high production, it may not reach its full potential, given the low soil moisture levels and the low leaf area, important for the flowers to turn into fruit. The expectation for the 2022 harvest in the Zona da Mata is more optimistic than for the other regions.


DOMESTIC MARKET and FOB

  • A week of very volatile prices, of uncertainty and few offers of coffee and very cautious players;
  • The producers, capitalized, believe in new highs in the short term;
  • Short selling domestic market, with demand from buyers for replacement, but few offers that made business possible;
  • Bica corrida dura type 6/7 at R$1110 to 1180 in Matas de Minas, R$1150 to 1200 in the South of Minas, Mogiana and Cerrado;
  • Bica Café Rio with 25% cata at R$1100 to 1110;
  • On Thursday, with the high with 500 points, the buying opportunities in the internal increased, with more business happening;
  • In the FOB export was also a week of little demand and movement. The unstable market and expensive freight make it difficult to do business both outright and differential, bringing uncertainties in relation to the attractiveness of prices.

LOGISTICS

  • It is rare to find space on a vessel, and when there is, shipowners, in most cases, decline later;
  • The freight prices are more expensive every day, about 3 to 5 times the value that was closed in the sale in months prior to shipment. To ship, the exporter or importer, depending on the Incoterm, ends up having to bear the high extra cost, causing great losses in the chain;
  • The chaotic lack of containers congests the general warehouses and delays coffee shipments;
  • Finally, if, with luck and a lot of rework, the exporter managed to find space in a vessel, container and freight, there is still a great chance that ships will delay or the bookings will be cancelled, a highly unstable scenario;
  • October vessels with all shipowners are full. There are spaces only for mid-November, very restricted and only to a few destinations. December is still outside the confirmation window (6 weeks);
  • Most shipowners are already sold out for the first half of November;
  • MSC has no more slots for Ashdod for 2021;
  • MSC, CMA CGM and Hapag LLoyd with very low container availability.

COVID-19 IN BRAZIL

People who received the first dose: +148.8 million (69.78% of the population)
People fully vaccinated: +97 million (45.57% of the population)
Cases: + 21.5 million
Deaths: 599.865 thousand

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”) and atlanticacoffees (plural) and 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

The international freights are in a rhythm of successive highs, as it is already known. Therefore, temporarily, in Atlantica, the new sales are being based FOB only. We can attend clients with CFR or CIF demands, however, the businesses are confirmed FOB and after the contracted freight we pass on the values to the clients. This is a temporary measure in response to the various differences in freight prices between sale and shipment, that caused high extra costs for the exporter, even though we have made reservations and agreements with freight forwarders, who have not maintained the freight values. We are continuously working to adapt to the new reality and making our best efforts to minimize the impacts of the global logistical chaos on our customers’ operations.

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