Coffee Market Report 2nd to 6th September 2013

COFFEE MARKET NEWS 2nd – 6^th August 2013

Coffee Prices, Futures and Currency close levels:

Futures Markets:

Arabica:  Fairly slow this week as Central America appear sporadic at best. Spot business and second hand business is quite active. A good part of trades are noticed in short covering of difficult coffees.

Robusta: Certified stocks are at the lowest level in four years. A reduction of export from Vietnam is the main factor causing the fall. Nearby differentials have firmed slightly with most interest looking towards new crop prices.

Currency:  After a better than expected UK economic data was releases, last week ended with disappointing industrial production and trade figures for July. Sterling gained further support on the back of the robust PMI release with GBP/EUR hitting a 4-month high of €1.1868. Similarly, GBP/USD has pushed through the $1.56 level ahead of today’s BoE and ECB rate announcements.

Physical Markets:

Brazil:

Buying interest from the end of 2013 to mid-2014 is a good 2 to 3 cents difference at presence, Weather watching remains a major pastime as the cold weather is shifting into rain.

Colombia:

The government has reaches some agreement with farmers, last on reached yesterday with truckers, there are some regions where the strike is still on going. Main crop is around the corner and expected to start with important volumes in the next few weeks.

India:

The erratic journey of the rupee continues to dominate the economic scene in India even as the currency recorded its lifetime low of 68.58 against the e US$. There is still more than half a million bags of Cherry Robusta left in the market and are in strong hand. 

Costa Rica: Roya is still spreading on the coffee plantations. Last year, there was 30% less rain and this year there is again 15% less which help to spread the Roya to the coffee plantations. The main region affected is San Vito and Sabalito located near the Panama border, and Coto Brus and Turrialba. Costa Rica seems to have sold PTBF basis up to max 45% with almost nothing fixed. If market continues to go on the downside producers might abandon a good part of their farms on a longer term. Differential have been rising further on a weekly basis.

Ethiopia: Volumes of coffee at the ECX are decreasing weekly. Sundried coffees are proving too expensive for most buyers. Spot sundried are being bought with immediate effect as European buyers are covering their short positions.

Kenya: Diffs remain steady. This week’s auction has 13,000 bags on offer and will most likely remain around similar quantities for the month. Fortnightly auctions expected from 8^th October.