Coffee Market report 21st April to 25th April 2014

OFFEE MARKET NEWS 21^st April – 25^th April 2014

Coffee Prices, Futures and Currency close levels:

Futures Markets:

Arabica: This week has been an interesting one, spanning over 20 cents from the high to low. It has become harder and harder to trade this market with volatility hitting a new high while this market has triggered technical reversals time and time again. Volume has been abysmal with yet another very quiet day as the lead month wasn’t even able to break 10,000 lots. This week’s notable news was Volcafe’s estimation for Brazil’s new crop.  It again fell to 45.5 million and the market followed this news reacting as if the estimates are forecasted to fall further.

Robusta: London sat tight in the mid 2100’s Friday. The inability to rouse another swipe at the 2200’s is starting to become a concern because a prior spot continuation prod at the 2260 resistance is looking increasingly like a crest to the up-move.

Currency: On the FX markets, GBP/USD suffered from an early lack of support slipping to a low of $1.6763 before pushing back towards the $1.68 level.

Physical Markets:

Brazil: An unprecedented drought has affected coffee production in Brazil, the world's biggest producer, driving the global benchmark arabica futures price up more than 85 percent so far in 2014 to its highest level in more than two years. In the past, droughts have taken place during the coffee flowering period. While it is widely accepted that an accurate production forecast will not be possible until the bulk of the 2014/15 harvest gets under way, likely in May or even later, some post-drought estimates are starting to be released. On March 7, the International Coffee Organization said the world coffee market will likely shift to a deficit of at least 2 million 60-kg bags in 2014/15, the first deficit in five years.

Colombia: some areas have already reported lower arrivals than originally expected. The southern regions are still expecting better flow for May. The rain went thru most areas and this is positive for the main crop development, the growers are worrying about very dry period, which is expecting from July to September.

Guatemala: The crop has finished in all coffee growing area even high grown.

Nicaragua: Exports from Nicaragua rose 7.4 percent in March from a year earlier to reach 193,447 60-kg bags, the country's national export association, Cetrex, said on Friday. Still, exports from Nicaragua, Central America's No. 3 coffee exporter after Honduras and Guatemala, were down 35.2 percent at 530,501 60-kg bags for the first six months of the 2013/14 season from a year earlier.

Kenya: The maximum price of Kenya's benchmark coffee grade was unchanged, the Nairobi Coffee Exchange said. The east African nation is a fairly small producer of the beans but global roasters usually buy the crop, to blend with coffee from other producers, which offer beans with a lower quality. Nyeri coffees due to come through the auction shortly.

Papua New Guinea: The internal and external market is waiting for the arrival of the main crop, which should come in bigger volume at end of April onwards.

India: When markets are going up, the local traders and speculators take the opportunity to sell their position at the higher level. With a lower production of Robusta, both washed and unwashed is getting traded at high levels.