Weekly Report - Brazilian Coffee market - Oct 4-9, 2020 - Atlantica

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KCNY and BRL / USD
This week, the market was calmer: KCZ0 fluctuated between 106.20 and 112.45. The real operated between a low of 5.4865 and a high of 5.6785 against the dollar.

INTERNAL AND EXTERNAL MARKET
Domestic and foreign markets with little activity and few businesses. The producers, besides being capitalized by sales at good prices of previous weeks, believe and wait for the resumption of coffee prices. Nevertheless, they are cautious about the sale of the 21/22 crop, due to the weather. There is also a high flow of coffee in the warehouses and a longer payment period.

WEATHER AND CLIMATE
The maximum temperatures in the producing regions were, on average, above 35ºC, close to the maximum historical levels, and there is low relative humidity. These conditions, besides being stressful for the arabica species, favor evapotranspiration, reduce the efficiency of the plant, favor the attack of pests, etc. Many crops have defoliation and symptoms of water deficit.

Throughout this week, irregular rainfall and below normal volumes for October were recorded. With the high temperatures, in some regions hail accompanied the rain showers, as in Matas de Minas / Zona da Mata. In the Alta Mogiana region, it has not rained for over 100 days.

The second flowering, very intense, opened amid the drought, low soil water availability and a strong heat wave. Rain is forecast for the next days of October in the coffee regions.

PRODUCING REGIONS
During this week we spoke with 31 coffee producers, partners of Atlantica in the regions of the South of Minas, Mogiana, Cerrado, North of Minas and Matas de Minas. All respondents have already completed the 20/21 harvest, with high production and above average quality.

For the high production in 20/21, the consequent depletion of the plants, the concern with the water deficit and the off-cycle year, the expectation is that the 21/22 harvest will be at least 30% lower, which can vary in different regions and climate conditions. Many producers are doing renewal pruning, due to the above-mentioned crop conditions.

INTERNATIONAL LOGISTICS
The difficulty with space in vessels and food grade containers remains a reality. We reinforce the request for customers to send Shipping Instructions in advance and to certify with the shipowner when closing the freight contract if there are guaranteed units. Working with bookings in advance is essential for shipments to take place without delay.

Lets keep believing and investing in the culture of coffee so together we can keep moving coffee forward!

Stay well,

Atlantica Coffee Team