Coffee Market Report 17th to 21st February 2014

COFFEE MARKET NEWS 17^th February – 21^st February 2014

Coffee Prices, Futures and Currency close levels:

Futures Markets:

Arabica: This week more so than any other week may have left us all a little worse than usual after an incredible and unprecedented move. Even though the week was shorter than usual, we had the best two day rally we have had in the last 5 years of the coffee market and on the weekly chart the largest move of the last 10 years. This week the NYC rallied 27.70 edging out the week ending August 19th, 2011’s 26.35 move.

Robusta: Likewise, after a stab at the weekly downtrend (2000) the day prior, London also suffered a bit of a twitch Friday with a narrower inside day performance.

Currency: On the FX markets, EUR/USD rose to a high of $1.3758 following the disappointing US housing data. However, the lower than expected UK retail sales data saw Sterling under pressure with GBP/USD falling to $1.6610.

Physical Markets:

Brazil: Fundamentally these are the worst droughts in Brazil’s history and have even left certain cities under water rationing. Rains have started to move into the regions but have yet to make a dent in making up the typical averages this time of the year. This has put this market in a very volatile state with the ability to break in either direction.

Guatemala: Even the market level has made a double rally the internal and external prices have not changed. Same high differentials, which makes the trade from this origin more complicated.

Nicaragua: exports from Nicaragua fell 10 percent in January compared with the same month last year, to reach 89,550 60-kilogram bags, the country's national exports association, Cetrex, said on Monday. Nicaragua, Central America's No. 3 coffee exporter after Honduras and Guatemala, shipped 189,111 60-kilogram bags during the first four months of the 2013/14 season, Cetrex said, down 63.7 percent compared with the same four-month period last year.

Kenya:  The top price of Kenya's benchmark coffee grade rose by 20.5% per 50 kg bag at this week's auction, the Nairobi Coffee Exchange (NCE) said. Industry regulator Coffee Board of Kenya forecasts production will rise to 50,000 tonnes of coffee in 2013/14 (Oct-Sept), up from 39,825 tonnes the previous season, buoyed by improved weather, better crop husbandry and bigger investment by farmers.

Ethiopia: Market rally helped for Ethiopia to increase export business, as differentials became much more palatable for coffee industry guys.

India: prices in India edged higher at a weekly auction due to strong overseas leads and robust export demand for the beans. Coffee output in India may fall 10.23 percent to 311,500 tonnes in the crop year started October 2013 due to untimely rains in southern Karnataka state, the major producer, the government-run Coffee Board said in its post-monsoon crop forecast.

Papua New Guinea: The weather conditions are more promising than in Brazil, which will help for the upcoming crop to be promising good.