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Weekly Report 26 July to 2 August 2013

Coffee Prices, Futures and Currency close levels:







NY Sep-13 c/lb






Lon Sep-13 $/t













Futures Markets:

Arabica: Last week saw coffee futures prices falling to their lowest point since July 2009 as the weak Brazilian real spurred selling on the market.  The move below 117.10 and a resumption of the downtrend leaves 110.65 as the next technical swing objective.  The low real is a negative factor for coffee prices as the nation’s export firms become aggressive on the selling side. 

Robusta: In London trading was unremarkable; staying between the ranges of 1883-1861, 1888-1860 and 1883-1863.   The main point of discussion is the decline of exchange stocks over the coming months before the arrival of the new crop from Vietnam.  The ICO states in its latest report that covering the Oct/June period exports reached 17.32 million bags – 5% below the same period the previous season.

Currency: The US dollar was under pressure following details published by the US government about growth in the jobs market.  Fewer jobs were created than expected – 162k jobs, the smallest increase in four months.  Unemployment is currently at 7.4%. 

Physical Markets:

Brazil: Today the much awaited government support programme for coffee producers will be announced, potentially adding 3 million bags of coffee to government stocks.  The idea of this is to support prices, which are currently at their lowest in four years.  The government will then sell options contracts to producers, effectively providing them with a minimum price.

Honduras: Exports are down 63% on the same time last year due to coffee leaf rust disease (roya).  Honduras is the largest coffee producing country in Central America.

Costa Rica: Starbucks has bought its first coffee farm on the slopes of the Poas Volcano.  Its aim is to serve as a ‘global agronomy center’, enabling the company to test new arabica varietals and expand its C.A.F.E practices programme.

Guatemala: Despite the country’s problems with coffee leaf rust, exports are up 7.5% on the same time last year.  The second largest coffee producer in the region exported 417,990 bags in July. 

Vietnam:  Good weather and the prediction of a full and early harvest has pushed down price differentials for the world’s largest robusta producer this week.

Myanmar: A 2014 deadline had been implemented for those members of a coffee growing scheme who have yet to plant their land.  A government project started in 2001 to increase coffee production in the country has not met expected targets.  Of the 18,000 acres in the Pyin Oo Lwin area designated, only 40% are currently producing coffee.