Brazilian Coffee Monthly Update: September 2021

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

• Brazil exported only 2.7m bags in August 2021, 6.3% and 25.2% lower MOM and YOY, respectively. The ongoing problem with ocean freights (scarcity of containers, booking cancelation and higher freight cost) have been limiting Brazilian exports. From January to August 2021, exports reached 26.3m bags, 1.8% lower YOY. According to Cecafé, 3.5m bags weren’t export in 2021 due to the current problems. An improvement in logistics is not expected until 2022.  

• At the end of August 2021, the spot barter ratio deteriorated by 2.4% MOM, at 3.2 bags/metric ton. It represents a worsening of 11.9% YOY, when the index reached 2.81 bags/metric ton. Despite the higher coffee prices, the increase of fertilizer costs still impacts the barter ratio compared to 2020. However, the situation is still better than August 2019, when the index was at 3.61 bags/metric ton.  

• In August 2021, local coffee prices rose to an average of BRL 1,034/bag (60kg) – another record level – and an increase of 79% YOY. In September, coffee prices increased to an average of BRL 1,081/bag.

• August saw low rainfall levels for most coffee-producing regions. In addition to favouring the harvest progress, the dry weather contributed to a better cup quality produced in 2021. The 2021/22 crop is forecast at 56.7m bags (36m bags are arabica, 32.1% lower than 2020/21). The ongoing drier conditions bring concerns regarding the potential for the next harvest, especially after the frosts, which hit the key arabica regions. From September onwards, the flowering season begins, and rainfall will be crucial for the 2022/23 development. Isolated rains fell in some producing regions, but widespread rains are expected in the second fortnight.

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