{"id":21051,"date":"2024-08-19T13:46:25","date_gmt":"2024-08-19T13:46:25","guid":{"rendered":"https:\/\/www.selinawamucii.com\/news\/?p=21051"},"modified":"2024-08-19T13:49:10","modified_gmt":"2024-08-19T13:49:10","slug":"coffee-gains-in-end-week-markets-after-brazilian-real-strengthens","status":"publish","type":"post","link":"https:\/\/www.selinawamucii.com\/news\/2024\/08\/19\/coffee-gains-in-end-week-markets-after-brazilian-real-strengthens\/","title":{"rendered":"Coffee gains in end-week markets after Brazilian real strengthens"},"content":{"rendered":"\n

A strengthening Brazilian real currency delivered marginal coffee gains for September raw bean deliveries on August 15, 2024.<\/p>\n\n\n\n

Both Arabica and Robusta gained in prices by 1.22% and 2.21%<\/u><\/a> respectively at the International Coffee Exchange (ICE) in New York . <\/p>\n\n\n\n

The rise happened after producers in Brazil held back exports due to the strengthening of the local currency against the dollar.  <\/p>\n\n\n\n

The currency\u2019s strength usually brings low cash conversions for Brazil\u2019s exporters, who usually hold back sales. This in turn causes temporary supply dips and international price spikes.<\/p>\n\n\n\n

Hence, the price on the 15th<\/sup> hiked by 0.86% day-on-day to settle at $2.40 a pound<\/u><\/a> in the futures markets.<\/p>\n\n\n\n

According to Market Insider<\/em>\u2019s data, this was the second straight day of improvement after another spike on Thursday the 14th.<\/sup><\/sup><\/p>\n\n\n\n

Though below its 52-week peak of $2.54 a pound, the mid-August 2024 price is still beyond the period\u2019s low of $1.44.<\/p>\n\n\n\n

Interestingly, these coffee gains mark a recovery following a global price decline in the first week of August 2024. Even Vietnam\u2019s world-beating Robusta beans sold lowly wholesale at\u00a0118,400 VND<\/u><\/a>\u00a0($4.72), way below the end July price.\u00a0<\/p>\n\n\n\n

At the time, the then-ongoing harvest in Brazil<\/u><\/a> had caused world prices to lose some momentum as supplies momentarily revamped.<\/p>\n\n\n\n

Coffee Gains on Currency Strength<\/strong><\/h3>\n\n\n\n

The current rally however has nothing to do with harvest pressure but rather currency strength. <\/p>\n\n\n\n

Since early July, the Brazilian real has been showing spurts of strength against the dollar, favoring especially Arabica prices<\/u><\/a>. Again, this is due to producer withdrawal from selling their beans until the rate can weaken and favor them via cash conversion.<\/p>\n\n\n\n

In reality, the currency has actually cumulatively decreased in value against the dollar from a yearlong perspective. Its highest point in 2024 was in January at 1 BRL=$0.20 dollars while its lowest was August 1 at 1 BRL=$0.1739. <\/p>\n\n\n\n

However, during this gradual decrease, the months of July and August have been recouping the currency. For example between July 1 and July 10, the value spiked from a low of 1 BRL=$0.1768 to 1 BRL=$0.1846<\/u><\/a>.  The same has happened lately, from an August 1 low of 1 BRL=$0.1739 to an August 13 high of 1 BRL=$0.1833. <\/p>\n\n\n\n

In short, there is a lot to coffee gains, not least of all the external factor of changing currency rates. To learn more about how Brazil\u2019s real favors or disfavors coffee prices, here is a broad perspective via statistics.<\/p>\n\n\n\n

Coffee Price Vs. Brazil Exchange Rate Statistics <\/strong><\/strong><\/h2>\n\n\n\n

Producer nations such as Brazil contribute to global coffee price swings by not only their harvest levels but currency rate changes against the dollar. A Brazilian supplier will get less local cash conversion when the real<\/em> is strong than when it is weak. For example at the strong August 13, 2024 exchange rate of 1 BRL=$0.1846, the seller in Brazil gets less local cash conversion per sale than during the low August 1, 2024 exchange rate of 1 BRL=$0.1739<\/u><\/a>.<\/p>\n\n\n\n

How has currency in Brazil affected coffee prices historically<\/strong>? <\/p>\n\n\n\n

From January 1 2020 to December 1 2022, the exchange rate of the Brazilian real changed many times but one time it changed by as much as 140% against the dollar. During these upward and downward changes, coffee prices also changed. According to Vietnam-based trade company XLII, coffee prices increased by over 80%<\/u><\/a> in August 1 2021. During this same timeline, the Brazil real had also strengthened by over 60% against the dollar since January 2020. The reverse occurred in December 2022 when the real<\/em>\u2019s exchange rate dipped below 40% since its January 2020 rate. Likewise, coffee prices went down below the October 2022 previous increase.<\/p>\n","protected":false},"excerpt":{"rendered":"

A strengthening Brazilian real currency delivered marginal coffee gains for September raw bean deliveries on August 15, 2024. Both Arabica and Robusta gained in prices by 1.22% and 2.21% respectively at the International Coffee Exchange (ICE) in New York .  The rise happened after producers in Brazil held back exports due to the strengthening of the local…<\/p>\n","protected":false},"author":3,"featured_media":20738,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2],"tags":[],"yoast_head":"\nCoffee gains in end-week markets after Brazilian real strengthens - Selina Wamucii | Food & Agriculture News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.selinawamucii.com\/news\/2024\/08\/19\/coffee-gains-in-end-week-markets-after-brazilian-real-strengthens\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Coffee gains in end-week markets after Brazilian real strengthens - Selina Wamucii | Food & Agriculture News\" \/>\n<meta property=\"og:description\" content=\"A strengthening Brazilian real currency delivered marginal coffee gains for September raw bean deliveries on August 15, 2024. 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