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Weekly Report 12 to 16 August 2013

Coffee Prices, Futures and Currency close levels:







NY Sep-13 c/lb






Lon Sep-13 $/t













Futures Markets:

Arabica:  The physical market was sluggish and weak last week; spot business was slow and little action was to be seen on futures buying either.  A new low for the Brazilian real led to a reflected dip in the market close on Friday and a general bearish sentiment across the board.

Robusta:  As with arabica, the London market is stuck in a rut.  The recent range is moving between 1755 and 1855 and doesn’t show signs of budging until NY persuades traders to take a stronger view.

Currency:  In the US, higher mortgage rates are threatening to slow the momentum in the housing market – a key contributor to the country’s economic recovery.  In August consumer confidence dropped 5% from its six-year high the previous month.  Export growth in the EU was driven by Germany and inflation across the region currently remains at 1.6%.  Sterling is steady against the dollar, hitting a high of GBP/USD $1.5656 on Friday.

Physical Markets:

Brazil: Nothing has been officially published yet following last week’s announcement of the farmer support programme and many are concerned about the potential crop losses in Paraná for next year’s harvest.  Loss estimations vary between 250k and 1 mill. bags.

Colombia: It is still not confirmed if today’s planned producer strike will go ahead.  Many believe the 42cts/lb subsidy does not justify such actions and negotiations continue.  Still in between crops, the Colombian coffee output is slow, awaiting the new crop at the end of the month.  Some business is taking place however, and differentials have weakened. 

Peru: Estimates show that about 70% of this year’s crop has already been harvested and demand is strong for shipments from October onwards.  A strike is planned for tomorrow for the producers of Chanchamayo.

Ethiopia: Current FOB business is close to zero.  Sources say only an increase in current market levels will see exports picking up.  Weather is favourable.

Tanzania: Arabica from the southern regions of the country, as well as robusta and the remnants of the past crop are on offer at the first auction of the season.  Differentials were firm and there was strong interest for the 15,000 bags offered.

Kenya: Main crop has sold out and next week’s auction predicts just 15,000 available bags.

Uganda: Tight supplies equals high prices and as a result, most sales are coming through lower grades and robusta. 

Vietnam: High industry debts (USD 380mill) have led the government to crack down against tax fraud.  If the rumour is confirmed about one key exporter the industry will suffer financial problems on a large scale.  Last week police confiscated 3000 tonnes of coffee from a non-bonded warehouse.