Cecafe, noting softer real, ticks up Brazil coffee export hopes

Cecafe, noting the resurgence in the dollar, nudged higher its forecast for Brazil's coffee exports, despite some signs of fresh weakness in Brazilian shipments, which fell 12.2% last month.

Nelson Carvalhaes, the president of Cecafe, the Brazilian coffee exporters' association, pegged at "about 34m bags" the amount of the commodity, including green, roasted and processed beans, that the country will ship this year.

The figure - while well below the 37.0m bags exported in 2015 - represents a slightly more sanguine forecast than that Mr Carvalhaes delivered last month, when he pegged shipments at 33m-34m bags.

And it followed the release by Cecafe of data showing that Brazil exported 3.07m bags of coffee in November, often a large month for shipments, a figure down 12.2% year on year.

That brought to an end a three-month period of relatively slow deterioration in export volumes,  with shipment volumes bolstered by new crop supplies and orders delayed from July, when a strike in Santos disrupted trade.

'Positive foreign exchange'

Mr Carvalhaes flagged the impact of a weaker dollar, a factor which, besides making Brazilian exports more competitive, had "resulted in positive foreign exchange revenue" for the country's own operators.

The real has lost some 5% against the dollar since the election a month ago of Donald Trump as US president raised alarm bells over trade dislocations, and of heavy investment which would stoke US inflation and bring interest rate rises.

Helped by the exchange rate, besides buoyant world bean prices, Brazil's coffee revenues from exports reached R$547.3m last month, a rise of 5.6% year on year, he said.

'Reduced offer of conilon'

Volumes, meanwhile, remained depressed by the "reduced offer of conilon [robusta] coffee, a reflection of the dry spell in the state of Espírito Santo", Brazil's top robusta-growing state, Mr Carvalhaes said.

Brazil's conilon exports actually rose month-on-month in November for the first time since August but, at 28,390 bags, remained some 90% lower year on year, a reflection of the poor harvest.

By destination, the US remained the biggest buyer last month, at 5.81m bags, although this represented a 19.3% decline from November last year.

Exports to Germany, Italy and Belgium, also large importers of Brazilian coffee, fell too, but the declines were in part offset by increases to volumes taken by Japan and Russia.

Exports to Russia surged 23% to 900,536 bags, promoting the country to the sixth biggest foreign buyer of Brazilian coffee, up from eighth in November 2015.