Weekly report – Brazilian Coffee Market – Sep 13 – 17, 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 – Sep 13 – 17, 2021

by Sep 17, 2021Market report0 comments

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

KCNY and DOLLAR

  • The December/21 contract closed Friday at 186,40 USC/lb, with a negative weekly variation of 165 points;
  • The Brazilian Real (BRL) traded at 5.20, but spiked on Friday, surpassing BRL 5.34, after the announcement of the increase in the financial operations tax IOF and its fiscal impact, in order to fund the increase in the value of the government’s new social program, Auxílio Brasil (Brazil Aid), which comes into force in 2021, before the 2022 presidential elections;
  • According to CECAFE, Brazilian coffee exports fell 27% in August to 2.33 million bags, much due to the international logistical chaos and shipping difficulties;
  • Climate shocks in Brazil such as the biggest frost since 1994, historical water deficit, heat waves, and others affect agricultural production, energy, and consequently inflation in Brazil, with effects to be felt in the short, medium, and long term;
  • GCA stocks increased by 56,138 bags, to 6,130,484 bags;
  • Delta’s new cases diminish expectations of a quick resumption of global activities and the economy, a downward macro factor.

December/21: Min: 182.50 | Max: 189.85 | Adjustment: 186,40 USC/lb
BRL/USD: Min: 5.2001| Max: 5.3461 | Last: 5.2810
*Data as of the completion of this report


WEATHER

  • Temperatures are high and relative humidity is very low in Minas Gerais, near 35ºC and 15% respectively, similar to desert conditions, according to Inmet;
  • Fires in Minas Gerais are breaking records. From January to date, over 4,500 fires have been recorded in the state, more than double what was recorded in the same period in 2020;
  • There was rain over the weekend in the Sul de Minas and Mogiana regions, between 2 and 25 mm, with chances for significant flower opening early next week;
  • However, the days should remain warm and the rains should only return from September 24 to the coffee areas;
  • The big concern with the few September rains is with the soil moisture that has been low for months and is important for the fixing of the flowers. According to Somar meteorologia, soil moisture in Minas Gerais is between 0 to 30%. The ideal humidity for coffee trees is above 60%;
  • Inmet confirmed forecasts of a new phase of La Niña, of short duration, which should negatively influence the volume of rainfall in October in southeastern Brazil, which is worrisome for flowering and the next Arabica crop.

DOMESTIC MARKET and FOB

  • Domestic market with short offers, as the growers are focused on future deliveries and still firm on physical prices, ranging from R$1050-1100 for dura bica corrida type 6/7;
  • Rare offers from Rio Minas, with Bica corrida around R$1000 to 1010 and ready/machined coffee at R$1050, but selling only combined sieve 15/16 with 17/18;
  • FOB Demand in exports was very punctual and little liquidity, given the very firm replacement prices in the domestic market;
  • Some importers of group 1 seem to be assimilating the highs of the last few months and resuming more urgent purchases.

LOGISTICS

In the complex maritime logistics scenario, the general situation is critical. There is a lack of containers, delayed ships, closed gates, terminals without windows, difficulty in getting bookings, and high freight prices. These impasses have generated a lot of rework with the countless transfers and rescheduling that are, week after week, delaying coffee shipments and generating extra costs.

  • In general, all shipowners have a low supply of standard containers. One of the potential explanations is that with the lack of space in vessels, the shipowners, mostly overbooked, hold the release of equipment to regulate the shipment of cargoes without allocation;
  • The biggest difficulty in getting containers has been with MSC, which has not released equipment for over 2 months. Some customers and freight forwarders have shared with us that MSC has announced that as of October 1st, they will apply a peak season surcharge of USD 1,500.00 /container. We ask our customers to send other shipowner options for their shipments;
  • Hapag Lloyd has been releasing containers in Santos. In Rio de Janeiro also, but with some difficulty;
  • Great difficulty in spot freight quotations for shipment November/21 onwards;

    **ATTENTION**: 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.*

COVID-19 IN BRAZIL

People who received the first dose: +140 million (65.8% of the population)
People fully vaccinated: +77.79 mi (36.47% of the population)
Cases: + 21.067 million
Deaths: 589,277 thousand


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

Let’s continue believing and investing in the coffee culture!
Atlantica Coffee Team

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