Siga e ouça no spotify! Novos episódios em português aos sábados pela manhã.
KCNY and DOLLAR
Week of unexpected movements and high volatility. The December/21 Arabica contract opened on Tuesday the 7th, quoted at 196.10 USC/lb. During the week, it kept falling, breaking important supports despite concerns about coffee availability for the 21/22 crop and the stagnation and high logistical costs. For the 22/23 crop, the concerns are about the rains, the high temperatures and the impacts of the frost of July/21.
During the week the dollar strengthened against other currencies, including the real, which also depreciated because of the increase of the Brazil Country’s Risk. However, yesterday the real appreciated significantly after President Bolsonaro’s letter that moderated the speech and relieved the markets.
- The Independence Day protests for the President Jair Bolsonaro took place in several Brazilian cities with significant support.
- Markets during the week did not react well to political , institutional impasses and Brazilian inflation.
- Truck drivers started a strike but demobilized the action after the President’s request.
- The ICO released data informing reduction on consumption, but still forecast a global deficit for the 21/22 harvest.
December/21: Min: 183,75 | Max: 197,45 | Last: 187,20 USC/lb
BRL/USD: Min: 5,1558| Max: 5,333 | Last: 5,2310
*Data as of the completion of this report
CLIMATE
- Water shortage continues to raise concerns. It is estimated that reserves in the Southeast/Midwest regions may reach lower levels than in 2001, a year with blackouts and energy rationing in Brazil. Also concerns of its impacts on the agribusiness and the brazilian inflation.
- During the week, it has been observed by our technical staff, in areas of South of Minas that were heavily hit by the frost that plants are sprouting. If this sprouting is perpetuated, it could mean lower costs with renovation and a faster recovery of some affected areas.
- Most of the country with low relative humidity levels, except the coastal regions and the extreme south of the country. Many fires taking place throughout Brazil and its different biomes.
- Forecasts show dry weather, little rain in coffee-growing regions before September 20th and moderate rain starting from that date, which is expected to be a relief for the plants.
- The main Arabica regions await the rains for the first flowering. Some small flowerings in irrigated regions were noticed, also in Matas de Minas and Espírito Santo. Good blossoming at the Conilon region.
DOMESTIC and FOB MARKET
It’s been a short week due to Labor Day on Monday the 6th in the US and Independence Day on Tuesday the 7th in Brazil. A few demands for the FOB. At the domestic market the pace of business was slow, with another week of great volatility.
- Producers remain firm with prices, believing in new highs, due to the shortage of rain and high temperatures.
- The good cup running screen is offered in between R$1040/50 and the fine cup in between R$1080/1090, these prices are about R$30 to R$40 apart from buyers’ idea.
- The Rio Minas businesses are practically illiquid, due to a much smaller offer than in previous years.
- Prices for Rio are very close to group 1. Rio Minas 17/18 is R$ 1060 and R$ 1020 for the 14/16. The running screen around R$ 980 with 30% of low grades.
- For the 21/22 crop in Brazil above 97.5% is harvested.
LOGISTICS
The scenario of difficulties in maritime logistics remains very delicate.
- For the fourth quarter of 2021, freight rates have not yet been defined, making it impossible to confirm bookings for shipments within this period.
- The shortage of food containers is high, as well as bookings rollover and uncertainties about the increase in international freight prices.
- The logistical bottleneck has become a nightmare and today impacts all segments, from our daily coffee to the furniture, automobile and other industries that depend on the import of products and inputs.
- Industries are struggling to manage their production chain, meet post-reopening demands and maintain prices in the face of the inflationary crisis around the world.
- FRAUD ALERT: Scammers created accounts under the domains atlanticacoffeee.com (coffeee with 3 letters “e”) and atlanticacoffees (coffees as plural), using the names of our company’s team, even imitating our signatures. These fraudsters are quoting coffee, issuing invoices with altered payment details, mostly to banks in Hong Kong. Please double check the message senders and company’s domain as well as any requests of ours for changing the payment instructions. Sorry about the inconvenience!
COVID-19 IN BRAZIL
- People who received the first dose: +136 mi (63,77% of the population)
- Fully vaccinated people: +68.95 mi (32,32% of the population)
- Cases: + 20.958 million
- Deaths: 585.205 thousand
Let’s keep believing and investing in the coffee culture!
Stay well,
Atlantica Coffee Team