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Weekly Market Report 21 to 25 May 2012


Futures Markets:

Arabica : It has been a bearish week, especially on Wednesday when the market fell 8 cents. NY has suffered from the influence of the wider macro. Speculators remained nervous with their longs whilst origins are buffered by weaker local currency (as USD getting stronger). Roaster buying is in small volumes.

Robusta : The London market went in a completely different direction than NY. London ended the week on its highs. There was strong buying which propelled the market to 2249, highest level since September 2011. Specs and funds were buying with roasters obliged to chase the market higher in order to stay within their covered position range. Indeed, origins are happy to feed the “bull marker” on a light scale basis.

Currency :  The euro declined over 2% against the US $ hitting the lowest level since July 2010 and then recovered some of the loss by the end of the week on news that Greek New Democracy party, which supports the bailout plans,  was placed first in six opinion polls. Sterling also declined against US$ on latest reading of UK public Finances with a larger shortfall than a year ago. Public sector net borrowing in April was £11.5 billion from £9 billion in April 2011, Also the pace of consumer price inflation in the UK fell to 3.00% in April. US$ was getting stronger against all other currencies.


Futures and Currency close levels:







NY Jul-12 c/lb






Lon Jul-12 $/t













Physical Markets:

Brazil : Quiet business activity as NYC fell and US$ getting stronger against Brazilian real. In terms of weather, it is dryer than the previous week and temperature remains steady around 15degrees with scattered rains, which is good for the coming crop.

Colombia : Coffee flow from Mitaca is better than last year, which given lack of demand , and contributed for weaker differential, the lowest one since November 2009. May exports are 405,000 bags compared with 382,000 bags in May 2011.

Honduras: Exporters are still in busy mode to complete shipments. There are still good offers due to overstock in farmers hands.

Guatemala: Exporters became active offering good qualities in decent volumes for nearby shipments. However, roasters are running their positions as they covered well ahead; this is the reason why prices are softer.

Kenya : The auction number 25 took place last week with 18,626 bags on offer. Major qualities seen were grinders and Mbunis indicating the near end of the season. Now, mills are expected the fly crop. Heavy showers have been reported making farmers worry about drying parchment.

Tanzania : Only leftover grades were on offer at the last auction with mainly poor quality and low prices. Some early harvesting has been reported in most part of the country. The next auction is expected to take place by early August. Last year volume production of 33,000 tonnes (Split as: 17, 2720 tonnes Arabicas and 20,280 tonnes) should be easily topped up this season as there were plenty of rains for optimal coffee production especially in the southern areas. Nearly half of the total export has been shipped to Japan.

Uganda : Activity is rather limited, rains restricting the processing in the mills and drying in the field.

Ethiopia :  Exporters need to wait for some recovering market of NYC or a fall of ECX Auction in order to meet the overseas demand.

India: Internal situation remains difficult, coffee flow and prices firmer than ever. Volume of Robusta cherries and parchment is tight. Weather looks favorable; the first Monsoon showers are expected to show off in Kerala by mid June.

Vietnam : Exporters are willing to sell versus July Terminal. They are not in hurry to sell thanks to Liffe performance.