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Weekly Market Report 19 to 23 November 2012

 

Futures Markets:

 

Arabica: As news of high physical output from major producing countries dominates, it continues to have a negative effect on the market. Throughout the week a weaker Dollar supported the falling price as people continued to take on further short positions.

Robusta: The market fell throughout the week as speculators persisted to have a dominant role on the sell side – possibly now taking their net position into short territory. Fundamentalists are still wondering why London is placed at such a level, but lower levels has been an unsatisfactory pastime so it is hard to argue against this trend in a myopic point of view.

Currency: The Dollar found comfort in the height of the 1.59s, as news that there is uncertainty among consumers and companies with the impact of quantitative easing on the economy. The US Fed Chairman, Ben Bernanke encouraged politicians to make progress on avoiding the $600bn tax increase and spending cuts, know currently as the “fiscal cliff” which is scheduled for January.

 

Futures and Currency close levels:

 

Monday

Tuesday

Wednesday

Thursday

Friday

NY Mar-12 c/lb

157.40

152.45

153.45

153.45

150.80

Lon Jan-12 $/t

1898

            1870   

1862

1873

1859

£/$

1.5904

1.5912

1.5902

1.5969

1.5959

 

 

 

 

 

 

Physical Markets:

 

Brazil: Estimates for the Brazilian coffee production during the marketing year remained unchanged at 55.9m bags, which is an increase of 6.7m compared to the previous year.

Colombia: The coffee growing federation on Saturday lowered its production target once more for 2012 to around 8m bags, as poor weather hits the world’s producer of high-quality Arabica beans for another year. 

Kenya: The port in Mombasa stated that it plans to increase cargo-handling tariffs by 10% to match a rise in container traffic at East Africa’s main trade gateway which serves several countries in the region.

Honduras: A 5% decrease in exports is predicted, as the outbreak of coffee leave rust damage, is slowly being verified.

Guatemala: Guatemala’s coffee association that collates figures from most of the Arabica growing regions stated that Mexico, Colombia, Peru and Dominican Republic export figures rose by 18.5% in October from the same month a year earlier.

India: Coffee prices fell at this week’s auction on lack of buying by exporters and on selective purchases by local traders; this resulted in below average quality coffees being heavily discounted according to the auction statement.

Vietnam: Production for the year is estimated around 24.2m bags, a lower output against the previous year of around 9% due to a large amount of pre-seasonal rain during the coffee flower blossoming, which has a negative effect on the cherry development.