Brazilian Coffee Monthly Update: October 2021

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

• Brazil exported 3.1m bags in September 2021, 11% higher MOM but 26.5% lower YOY. Ongoing problems with ocean freight shipping (scarcity of containers, booking cancellations, and higher freight costs) still limit Brazilian exports. From January to September 2021, exports reached 29.8m bags, a decline of 4.1% YOY. According to Cecafé, despite the current smaller crop, there is available coffee from the last record crop to export. An improvement in logistics isn’t expected until 2022.

• By the end of September 2021, the spot barter ratio deteriorated by 13% MOM, at 3.4 bags/metric ton. It represents a worsening of 8.8% YOY, when the index reached 3.2 bags/metric ton. Despite higher coffee prices, recent increases in fertilizer costs (especially urea) are impacting the barter ratio.

• In September 2021, local coffee prices rose to an average of BRL 1,088/bag (60kg) – another record level and an increase of 93% YOY. In October, coffee prices increased to an average of BRL 1,186/bag. The price increase of robusta and lower-quality arabica beans caused a reduction of differentials when compared to higher-quality arabica.

• Rainfall in September was below the historical average in seven of eight regions. However, the rains in October have improved the situation, especially looking at cumulative rainfall (historical average and the last cycle). Flowering has been reported in all coffee regions. In the coming weeks, the weather forecast indicates good rainfall volumes, which will be important for the fruit-setting stage. Despite the rainier outlook and the on-cycle output for arabica, the previous dry period and frost events should limit production in 2022/23.

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