Brazil | Production and markets
A report reveals the variations in coffee prices and the current scenario of the industry in Brazil
The pandemic, rising input costs, supply difficulties and the weather are some of the factors that impact industrialists and influence the final value of the product.8/6/2021
From sowing until the coffee reaches the table, the beans go a long way. There are many factors that influence the price paid for merchandise on the shelf, such as the rise in the exchange rate, the increase in input costs, the volume of the harvest, the climate and the continuation of the pandemic .
According to a study carried out by the Brazilian Association of the Coffee Industry - ABIC, in the period from December 2020 to July 2021, the amount paid for the raw material is on average 82% more expensive. However, on the supermarket shelves, the readjustment in the price of coffee reached an average of 15.9% for the same period, a percentage well below the 57% increase in the average of products considered basic, such as milk. , rice, soybean oil, and beans.
The industry margin is at its worst
The margins of the coffee industries are at the worst level and many will not be able to avoid the transfer to the consumer due to the strong appreciation of inputs, which continues to occur in the market.
“Without readjustments, there is a commitment to the sustainability of the business. For the consumer to continue to have access to a quality product, to which he is used, he will have to understand the readjustment that the shelf will present. In this scenario, the consumer will have to be aware of and distrust those brands that offer very low prices ”, says Celírio Inácio, Executive Director of ABIC.
Production and supply
In 2020, there was a good harvest in Brazil. The 2021 harvest began to be compromised in the first quarter of this year, as a result of the prolonged drought in the coffee park and a year of decline in the coffee biennial, which, according to the National Supply Company (CONAB), is estimated at 49 million bags. However, 27 years ago, Brazil did not register such intense frosts in the coffee sector, which at this moment generates a lot of uncertainty about the size of the next harvest. This situation affects the supply of coffee in the market, causing prices to move. Right now, commodity prices, calculated in reais, are rising like never before.
Brazil maintained its position as the second largest coffee consumer in the world and, despite the pandemic scenario, the demand for coffee continued its growth rate. The country registered an increase of 1.34% compared to the same period of the previous year.
Despite the concerns about the economic impact, the social effects and the well-being of the people have great relevance in this gear. Coffee will always be a good companion to overcome crises. Today, in Brazil, there are cafes for all tastes and budgets.
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