02. 12. 2012

COFFEE MARKET NEWS 1st - 5th February 2010

Futures Markets:

Arabica : London had a quiet sideways day and NY rallied on short covering, but the mood has changed over the last few sessions - the US is not going to the moon in more ways than one! High differentials and shortage of higher quality Arabicas still persists but the market is now focusing on a high Brazil crop and commodity bulls have gone out to graze. Looks sideways in both markets although the Dollar weakness might provoke another small rally.

Coffee futures settled lower Friday amidst falling commodity and world stock markets. Speculative liquidation and producer selling caused the fall. The weak technical performance added pressure on the prices. The breaking through the 130.00 cents level makes prices vulnerable to further losses. This level was the base of the recent rally when the market posted the highs for the 2009 and 2010. During the week, Arabica futures dropped 2.90 cents or 2.2 %.

In London, the Robusta market closed lower. The March position fell $14 to settle at $ 1,310 per metric ton.

Robusta : activity remained rather subdued Activity was moderate. Some producer selling added the bearish sentiment. Farmers in Vietnam usually increase selling ahead of the Tet holiday.

Currency : Sterling weakened against the dollar and euro as investors weighed the risks ahead of a key Bank of England decision later in the week. The euro hit a seven-month low against the dollar on Thursday as concerns intensified that Greece's fiscal problems would spread to other highly-indebted euro zone countries, while European stocks followed Asia lower.

Monday

Tuesday

Wednesday

Thursday

Friday

NY Mar-10 c/lb

132.55 (+0.85)

135.05

133.00

131.55

128.80

Lon Mar-10 $/t

1322 (-2)

1339

1324

1310

1295

£/$

1.5960

1.6015

1.5905

1.5769

1.5618


Physical Markets:

Brazil : The 2010 coffee harvest in world top grower Brazil is developing unevenly as a result of unusually heavy rain but measures to avert a resulting dip in quality are not economically viable, producers said this week. Brazil's coffee trees are in an upswing year in the biennial cycle in which output rises and falls from one year to the next and production has been estimated upwards of 46 million bags, but much could be of lower quality than usual.

Coffee growing areas in the world's top grower Brazil will be dry for the rest of the week, bringing a welcome respite from months of daily showers that will hurt the quality of the coming harvest. Data from meteorologists Somar showed there would only be a sprinkle of a few milli-meters of rain in the main growing states of Minas Gerais, Espirito Santo, Sao Paulo and Parana, and trees would bask in sunshine until Sunday at least.

Colombia : Differentials remain high and availability scarce.

Nicaragua : Nicaragua's National Coffee Council, or Conacafe, expects coffee production in the current 2009-10 crop cycle to rise 20 percent to 1.38 million 60-kilogram bags, significantly higher than Ico estimates. Coffee exports from Nicaragua in the 2008-09 coffee year went down 13% at 1,382,082 bags, from 1,585,731 bags in the previous cycle, according to data released last year by the Nicaraguan Export Center, or Cetrex.

Tanzania : Auctions reduced to fortnightly prices remain very high.

Kenya : Local shorts keeping prices very firm.

Uganda : Coffee exports from Uganda dropped to 264,314 60-kilogram last month, from 329,211 bags a year earlier, down 20.4 percent, reported yesterday state-run Uganda Coffee Development Authority. Export earnings totalled US$25.4 million, down 17% from US$30.7 million.

Ivory Coast : rubber output is rising and will jump next year as soaring demand from China encourages its farmers to switch from growing cocoa and coffee. "Production has increased slightly this year ... after 2010 it is going to rise sharply as thousands of hectares of new plantations come in," according to the general secretary of the Ivorian natural rubber association (APROMAC).

India : coffee exports up 28% in January as demand for the new season crop picked up, Coffee Board data showed on Monday. Total exports were 10,668 tonnes during the first month of 2010 compared with 8,353 tonnes in the year-ago period.

Indonesia : robusta coffee exports from the main growing area in the southern part of Sumatra fell 54%in January from a year ago, trade data showed on Wednesday, as exporters ran out of stocks. "We did not have much carry over stocks at the start of the year," said Muchtar Lutfi, an official at the local chapter of the Indonesian Coffee Exporters Association (AEKI) in the main coffee-growing province of Lampung.

Transportation : The world's biggest container shipping company, Maersk Line, said on Monday it would raise rates on routes from South Asia and the Middle East to Europe from Feb. 1, but said rates remained unacceptably low. The company, part of Danish shipping and oil group A.P. Moller-Maersk , said it would raise rates on 20-foot containers by $300 and rates on 40-foot containers by $600 for transport of dry commodities on those routes.

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