Coffee Market Report 20th to 24th January 2014

COFFEE MARKET NEWS 20^th January – 24^th January 2014

Coffee Prices, Futures and Currency close levels:

Futures Markets:

Arabica: The market was expecting the Index exposure to fully reflect the changes since the re-weighting into the New Year. Over the week New York was down 3 cents with the open position recording a nominal change of 438 lots higher. Arbitrage values narrowed in line with the weakness edging below 40 cents base March.

Robusta: Robusta attempted to spike higher towards the 1750 option strike but failed to attract enough new involvement to break the levels down. Prices broke down into the week beginning to probe below the 1700 option strike and change the immediate term momentum of the market. The weight of nearby Managed Money longs combined with arbitrage exposure reflects in the March premium narrowing into the high teens.

Currency: On the FX markets, GBP/USD continued to make further gains rising to a 30-month high of $1.6643, however, Sterling lost ground to the euro following the euro-zone PMI data slipping to €1.2121. The euro also made gains against the US dollar pushing to a high of $1.3698.

Physical Markets:

Colombia: Producers and Government still have not agreed on how the subsidy will be paid in 2014. This uncertainty allowed only very little coffee to change hands, has moved up replacement levels and forced several shorts to start covering at a loss.

Brazil: Asking differentials have become firmer for main qualities, after a rather hot and dry January so far some heavier though still patchy rains.

Mexico: Coffee exports from Mexico plunged 20.7 percent in December compared with the same month a year earlier to 159,645 60-kilogram bags, the national coffee organization Amecafe said on Friday. Total exports in the first three months of the 2013/14 season reached 458,369 60-kg bags, down 32.2 percent from the same period last year, Amecafe said.

Guatemala: Guatemala could export 3.45 million bags of coffee in the 2014/15 harvest, national coffee association (Anacafe) president Nils Leporowski said on Tuesday, once the country starts to overcome a devastating coffee fungus outbreak.

Kenya: Kenya's weekly coffee auction was cancelled due to a lack of supply caused by a row between some new regional governments and farmers over where the commodity can be marketed and sold, company, exchange and regulatory officials said on Wednesday.

Tanzania: Mostly offered coffee today is from Northern side. In view of dwindling supplies and partly rather reasonable (Estate-) qualities available prices were steady to firm. From here biweekly auctions are scheduled – how many, however, is unknown.

India: Coffee deliveries of Arabica both washed and unwashed were picked before one week and a few big traders continue to dominate the scene by cornering a major chunk of washed Arabica every day. There are predictions that about 30% of washed Arabica crop has been traded already.