Brazilian Coffee Monthly Update: November 2021

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

• Brazil exported 3.4m bags in October 2021, 7.5% higher month-on-month but 23.8% lower year-on-year. The ongoing problems of container scarcity, booking cancellations, and higher freight costs continue to limit Brazilian exports. From January to October 2021, exports reached 33.3m bags, a decline of 6.3% YOY. Logistics aren’t expected to improve until 2022.

• In early November 2021, the spot barter ratio deteriorated by 19.4% MOM, to 4.3 bags/metric ton – the highest level in five years. It represents a worsening of 34.9% YOY, when the index reached 3.2 bags/metric ton. Despite the higher coffee prices, the recent escalation of fertilizer costs is impacting the barter ratio.

• In October 2021, local coffee prices rose to an average of BRL 1,222/bag (60kg) – a record level and an increase of 128% YOY. In November, coffee prices increased to an average of BRL 1,274/bag.

• The price increase of robusta and lower-quality arabica beans caused a reduction in differentials when compared to higher-quality arabica. 

• Rainfall in October was well above the historical average in seven out of eight regions. The situation has been favorable for crop development, especially looking at cumulative rainfall (historical average and the last cycle). Despite the good rainfall, there are concerns about fruit abortion due to the initial suboptimal conditions of coffee trees (drought and frosts). The weather forecast indicates rain in the coming weeks, which will be important for the fruit-setting stage. 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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