Brazilian Coffee Monthly Update: December 2021

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

• Brazil exported 2.9m bags in November 2021, a drop of 16.5% MOM and 38.6% YOY. The ongoing problems of scarcity of containers, booking cancellations and higher freight costs are still limiting Brazilian exports. From January to November 2021, the exports reached 36.3m bags, 10% lower YOY. In addition to the logistical issues, the current off-cycle (in 2021/22) should weigh on Brazilian exports in the coming months. Logistics are not expected to improve until 2022. 

• In early December 2021, the spot barter ratio had a slight improvement of 2.3% MOM, at 4.2 bags/metric ton. However, it still represents a worsening of 52.9% YOY, when the index reached 2.8 bags/metric ton. The high fertilizer costs are impacting the barter ratio.

• In November 2021, local coffee prices rose to an average of BRL 1,348/bag (60kg) – another record level – an increase of 138% YOY. In December, coffee prices are averaging BRL 1,464/bag.

• In recent months, despite the boost in the conilon prices, an increase has been observed in the differentials between arabica higher quality (type 6) and conilon (type 7 and 8). 

• After excellent rainfall volumes in October, rains have decreased in November (but remain at good levels). Currently, the situation is still favorable for crop development, especially looking at cumulative rainfall (historical average and the last cycle). However, there are concerns about fruit abortion due to suboptimal initial conditions of coffee trees (drought and frosts). Despite the rainier outlook and the on-cycle output for arabica, the previous weather problems should limit production in 2022/23.

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