Porto Alegre, February 21, 2020 -
The international coffee market had a week in which the New York Stock Exchange (ICE Futures US) prevailed for arabica, which marks the quotations. Also in London, the robusta ended the low week. The rise in the dollar against the real and other currencies and apprehension with the coronavirus put pressure on the market.
After gains at the end of last week in New York, the stock market was not traded due to the US President's Day holiday on Monday. On Tuesday, NY suffered heavy losses, on Wednesday a slight increase and fell again on Thursday. The rise in the dollar spurred sales, as well as fears about the effects on the Chinese and global economy with the coronavirus, which continues to expand and is expected to affect Chinese demand for agricultural products.
According to SAFRAS & Mercado consultant, Gil Barabach, the coffee market reacted in the last week, but cannot sustain higher prices. “The fact is that Arabica coffee was under a lot of pressure, due to the pessimism caused by the coronavirus. Thus, an external relief was enough for the price of coffee to recover the lost space. And with that, the contract on May 20 was 113.80 cents on February 18. But it went up too much and ended up encouraging achievements and corrections, after all, China's risk is still present ”, he comments.
Barabach indicates that the coffee market remains without major news on the fundamental side. “The global supply remains calm. And the climate remains favorable to coffee crops in Brazil, which supports the promise of a record Brazilian harvest in 2020 (SAFRAS projects 68 million bags). On the demand side, it follows the defensive stance in the face of the uncertainty that is dominating global markets. This should continue to limit the positive potential of the market ”, he warns.
In the balance sheet for the week, Arabica coffee on the New York Stock Exchange for May fell from last week's close from 106.70 to 104.95 cents a pound on Thursday, accumulating a 1.6% loss. In London, the robust for May fell by the same comparative 2.7%.
In Brazil, last week's high in New York, with the dollar also advancing, led the quotations of the best quality Arabicas to exceed the range of R $ 500.00 per bag. Barabach comments that that increase led to a modest improvement in market liquidity. However, the high volatility continues to hamper business. “The fact is that sales are still concentrated in small batches and demand is focused on better drinks. The market rose, supported by the increase in the ICE and, mainly, in the dollar close to historical levels. As a result, the best coffees were once again traded at around R $ 500 per bag, both in terms of availability and for future delivery of the 2020 Brazilian harvest ”, he commented.
However, NY fell and prices dropped again in the country. On the balance sheet, the Arabica good drink in the south of Minas Gerais, which closed last week at R $ 500.00 a bag on purchase closed this Thursday at R $ 485.00 a bag. And that is why the dollar has reached historic highs, with the commercial accumulating a 2.1% increase until Thursday this week, reaching R $ 4.392.
Lessandro Carvalho (firstname.lastname@example.org) / Agência SAFRAS
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