Siga e ouça no spotify! Novos episódios em português aos sábados pela manhã.
KCNY and DOLLAR
Arabica contracts opened the week at low levels, with the appreciation of the dollar and expectations of rain in Brazil. With the drop of around 40.000 bags in NY certified stocks and the lower than necessary rain volumes here, the coffee started to trade positively again with signs of low supply in 2022, ending the week with a positive variation of 795 points.
- CONAB, in its 3rd Survey of the 2021 Crop, announced that Brazil should produce around 46.9 million bags in 2021, a cut of 25.7% in relation to the 2020 crop, justified by the off-cycle year and adverse weather;
- The reopening of borders in some countries, such as the USA, brings a more optimistic feeling about coffee demand, but the serious and expensive international maritime logistics scenario worries the market regarding the shipments;
- Inflation in Brazil rose again and the IPCA, an index that measures the variation in prices of a set of products and services most consumed by Brazilian families, had the highest rise last month in 21 years;
- With fears about the Chinese real estate developer Evergrande and risk aversion, the dollar advanced against the real heading to end the week up over 1% against the Brazilian currency.
December/21: Min: 182.35 | Max: 195.30 | Adjustment: 194.35 USC/lb
BRL/USD: Min: 5.2490| Max: 5.3775 | Last: 5.3342
*Data as of the completion of this report
WEATHER
- After days of very high temperatures and very low air humidity – around 10-15%, a cold air mass that reached the southeast region brought some relief with the drop in temperatures and cold winds;
- The conditions are for a return of rain starting today in the Cerrado and starting tomorrow it will reach the south of Minas Gerais, the Triângulo Mineiro, Paraná, and the north of São Paulo. If confirmed, they may bring corrections to the highs or vice versa;
- The most voluminous rains are expected for the second week of October/21;
- The rains are highly expected by the market and predominant in pricing because with their return, we can better understand what the 2022 harvest will be.
DOMESTIC MARKET and FOB
- The domestic market followed the upward trend, but still short of offers;
- Bica corrida bebida dura type 6/7 at R$1050 to 1100 per bag;
- Low offer of Rio Minas, quoted between R$1080 for the sieve 17/18 and R$1050 in the 14/16;
- In the Zona da Mata, most warehouses are still full and facing difficulties to ship coffee, as there have been many cancellations due to the low availability of containers. Consequently, some warehouses are unable to receive coffee because stocks are not decreasing;
- In the FOB, there was a demand for more punctual business and apparently a little higher demand.
- Demand for Rio Minas was strong, but facing difficulties in absorbing new freight bases and high replacement prices;
- For the main destinations of Rio Minas, such as Turkey, North Africa, and Arab countries, the freights are around USD 5,200 for 1 container of 40 feet. At the beginning of the pandemic, these freight cost around USD 1700.
CROP
- The arabica harvest in Brazil is almost over. In higher altitude plantations it is still happening, where fruit maturation is slower. It also still occurs in those of selective handpicking harvesting;
- In general, the 21/22 harvest shows very good quality, favored by the absence of rain during the harvest, very positive for the Good and Fine cup qualities, but at the same time negative for Rio Minas quality, which has presented very low supply;
- The water shortage situation affects, in different intensities, the main Arabica regions in Brazil;
- In the region of Zona da Mata (Matas de Minas), the opening of the first flowering was recorded in the first half of September, mainly in low altitude regions. It is worth noting that the Matas de Minas region has less water deficit, when compared to the South of Minas and Mogiana. In addition, frosts did not hit the region;
- The first blooming was also registered in Sul de Minas, but it is very important that there is consistency in the rains for the setting of the flowers.
LOGISTICS
- Destinations North America: spaces close as soon as the new ships open for booking. There are new bookings only for November departure;
- Destinations Japan: restricted spaces as well. This week we could get an allocation for late October and early November;
- Destinations Europe: new bookings have been confirmed only for November;
- The international maritime freights quoted in the spot are with exorbitant prices and no guarantee of space;
- Due to the high and volatile international freight spot prices, Atlantica is temporarily quoting only FOB for new sales (More details in the footnotes);
- The lack of containers, delays of ships, closed gates, terminals without windows, difficulty in getting bookings and high freight prices continue to generate many delays in coffee shipments.
COVID-19 IN BRAZIL
Almost 40% of the population is vaccinated and 67% have already received the first dose in Brazil. The moving average has returned to an upward trend after 3 months.
People who received the first dose: +144 million (67.6% of the population)
Fully vaccinated people: +84 mi (39.6% of the population)
Cases: + 21.307 million
Deaths: 593,018 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.