Brazilian Coffee Monthly Update: August 2021

Our latest update about the Brazilian coffee industry. Read about exports, prices, weather, stocks, and crops.

• Brazil exported 2.8m bags in July 2021, which is 7.3% and 12.8% lower MOM and YOY, respectively. Brazilian exports were impacted by limited availability of containers, booking and higher freight cost caused by demand increase for food and electronic products in the US and Asia. Global logistics are a concern for the coming months. Despite the current situation, from January to July 2021, the exports reached 23.7m bags, 2.2% higher compared to the same period in 2020.

• At the end of July 2021, the spot barter ratio reached 3.1 bags/metric ton, an improvement of 10.3% compared to the previous month. However, it represents a worsening of 6.9% YOY, when the index reached 2.87 bags/metric ton. The recent increase in coffee prices contributed to the index improvement compared to last month, but the current higher fertilizer costs still impact the barter ratio compared to the previous year.

• In July 2021, local coffee prices rose to an average of BRL 908/bag (60kg) – another record level – an increase of 79.5% YOY. In August, coffee prices increased to an average of BRL 994/bag. 

• July saw dry weather and low temperatures for most coffee-producing regions. In addition, Paraná, São Paulo and Minas Gerais states faced three frosts events in July. In the week of July 18, a tougher frost hit relevant regions such as São Paulo, South and West of Minas Gerais states. Preliminary reports indicate a potential loss from 2m to 6m bags for the 2022/23 crop. Additional losses are expected, depending on farmers’ reaction (pruning rate). From September, rainfall will be crucial for the next crop development (2022/23 season).

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