Amid the volatility of the U.S. dollar, the political and fiscal scenario in Brazil kept the real depreciated by about R$5.40. The concern with Brazil’s coffee supply and other origins supported commodity prices. The market is following forecasts of crop losses and ICE’s coffee stocks continue to rise.
It is increasingly difficult to get containers for exports in Brazil. Nevertheless, there is a substantial reduction in the free-time period at the origin, difficulty with space on vessels and high number of vessel omission. We ask importers to put pressure on shipowners to guarantee equipment available to meet the contracted freight and free-time at the origin for over 10 days, in order to mitigate the uncertainties with the shipments.
A truck driver’s strike is foreseen for Monday (01/Feb), in manifestation to the increase of the ICMS tax over the diesel. However, it is still not known the strength of the movement, once the category is divided. The government is analyzing measures so that it doesn’t gain forces like the strike of 2018, which stopped the road transport of cargo in Brazil for 10 days.
DOMESTIC MARKET x FOB
Coffee prices in the domestic market continue to rise. This week they surpassed R$700 for fine cup and + R$650 for good cup coffees in some regions. Even with the good prices, the producers are still retracted in the sale of their harvest, keeping the business flow very calm. Besides believing in more expressive highs, they analyze closely the high production costs, such as electricity, fuel, inputs, dollar, and others. Export sales are still low, with a high divergence between the buying and selling base.
The volume of rainfall in January in Brazil should end below the historical averages for the month. According to Somar Meteorology, the forecast for the next 7 days is rainfall below normal in the main producing regions and temperatures 6ºC above average in Mogiana. The humidity in the soil seems to be sufficient until the resumption of rains from day 05/Feb. According to Epamig, the phenomenon La Niña should cause rainfall below the volume expected for February in the regions of coffee, an important period for the filling of coffee beans.
COVID-19 IN BRAZIL
Vaccinated since Jan 17: + 1,5 mi
Percentage of the population vaccinated: 0.71 %.
Cases: + 9 mi
Deaths: + 221 K
Recovered: + 7,9 mi
Let’s keep believing and investing in the coffee culture!
Atlantica Coffee Team