Brazilian coffee exports totaled 2.28 mln 60-kg bags last February, down 38% from January and 40% from the same period last year. The data are from Secex. Cumulatively over the 22/23 business season, which began in July and reaches its eighth month in February, shipments amount to 24.76 mln bags. This corresponds to a decline of 7% from the same period last year. The sharp flow in the first half of the season guarantees this performance. Coffee export revenue, despite the recent price low, is 16% above the same period last year, totaling USD 5.72 billion. The flow of shipments tends to remain weaker until the arrival of the new crop. Besides lower availability, the very stance of growers, retracting supply and forcing very firm differentials at ports, ends up reducing the external flow. SAFRAS projects exports of 35.95 mln in the 22/23 season, which ends in late June.
The differentials in the international market, based on the ICO benchmark, have lost some momentum against ICE US. Even so, they remain sharply appreciated, especially other milds and Brazilian naturals. The ICO average price for Colombian coffee is around 55 cents above the second position on ICE US. The description erased part of the spread as it was already operating above +59 cents in January. The low in Colombian milds left them closer to Central American milds, which hover around +53 cents against ICE US. However, the highlight is still the natural from Brazil, which, even with the slight decline, continues to be traded with a positive differential (premium) sustaining +14 cents against the New York benchmark, which is unusual.
Now looking more closely at differentials in Brazil, MTGB good cup is indicated at -4 cents, and fine cup at +10 cents against ICE in the FOB Santos spot market. A very strong basis, given the still very short posture of sellers. Differentials with the new crop (with shipment during the second half of 2023) are weaker and in line with indications of the crop arrival. MTGB good cup is pegged at -19 cents, and fine cup 17/18 at -9 cents against ICE US. This distortion in the external sales bases is explained by the difficulty in finding coffee in the physicals.