Porto Alegre, February 19, 2021 – Global coffee differentials remain firm, especially for milds. The aggressive demand and easier supply, overcoming the bottleneck with the arrival of the crop from Colombia, Central America, and Vietnam, justify this positive movement. In the case of robusta, the greater demand associated with the prospect of a negative correction in the size of the Vietnamese output strengthened differentials. Brazilian naturals, in spite of also showing a positive movement, sustain much smaller gains, still under a strong influence of record Brazilian shipments.
In FOB Brazil, good cup with screen 14/16 (MTGB) is indicated at -25 cents against ICE US, showing good recovery. It is good to remember that this description exchanged hands at -30 cents in November and was at -40 cents last September in the face of strong pressure from the arrival of Brazil’s 2020 record crop. But even so, it is still well below the basis reached a year ago, when it was trading at -14 cents against ICE US.
While sellers look at production losses in Brazil’s 2021 season and the short stance of growers at that time, considering differentials too wide, demand is supported by the strong flow of shipments of a record crop to keep differentials relatively under pressure. The distance between the tips is more evident in the future positions with the new crop. The idea for the new crop is -25 cents for Jul/Dec 2021, which was bothering sellers. The position for Jan/Jun 2022 is at -23 cents.