02. 12. 2012

COFFEE MARKET NEWS 15th - 19th February 2010

Futures Markets:

Arabica : Chinese New Year, USA Presidents' Day and Carnival in Brazil: Three good reasons not to get involved with Coffee on Monday. At the end of a slow week, Arabica coffee prices rose 2.00 cents. The beginning of the March position's delivery period attracted high levels of participation by speculators.

Robusta : African Robusta coffee farmers could earn much more from their carefully tended trees if there were global standards for the variety, according to Ted Lingle, executive director of the California-based Coffee Quality Institute. Prices hit a 2 month low on Thursday before a weaker dollar led a bounce back upwards. During the week, Robusta prices declined $28 per metric ton. The Lunar New Year holiday in Asia slowed physical business.

Currency : The Euro hovered near 9-month lows against the US Dollar while stock markets were subdued as investors worried that forthcoming meetings of Euro zone policymakers would produce no quick or concrete proposals for aiding Greece. The US Dllar rose broadly, commodity prices dropped and stocks fell after the Federal Reserve stunned markets by lifting an emergency lending rate for the first time since the financial crisis. The emergency easing cycle began with discount rate cuts. This was all about easing liquidity to banks. So the move to raise the discount rate means the long journey towards (policy) normalisation has begun.

Other Commodities : Gold prices steadied around $1,095 an ounce as pent-up demand from the physical side remained solid despite recent dollar strength.. US crude was steady above $74 last week after stronger-than-expected Japanese growth data eased concerns that energy demand would taper off as China tightens monetary policy.

Monday

Tuesday

Wednesday

Thursday

Friday

NY May-10 c/lb

Closed

135.05 (+0.75)

134.65

136.40

137.05

Lon May-10 $/t

1318 (-10)

1316

1310

1306

1303

£/$

1.5688

1.5788

1.5686

1.5613

1.5463


Physical Markets:

Brazil : Big crop expected. When? Will this cause a drop in the New York coffee price?

Colombia : In the world's Number 3 coffee grower, exports fell 38% to 536,000 bags in January while production dropped 41% as strong drought delayed the ripening of beans, according to the national coffee federation. If estimates are accurate, January's coffee output would be lowest since January 1976 when Colombia produced 345,000 bags and 43% lower than production of 876,000 bags in January a year ago. The federation said heavy rains and low fertilizer use during March and April last year affected the harvests and lowered the production January 2010.

Peru : Coffee reportedly being attracted across the border in Colombia.

Costa Rica : Differentials beginning to rise as shortages of Colombian mild Arabicas takes hold.

East Africa / Congo : The Democratic Republic of Congo (DRC) has joined Eastern African Fine Coffees Association (EAFCA) bringing the number of countries in the coffee body to 11. The announcement was made in the just concluded EAFCA conference in Mombasa which brought together over 700 delegates from all parts of the world to tackle diverse issues in the sector such as coffee production, transport, roasting and marketing. DRC now joins Kenya, Uganda, Tanzania, Ethiopia, Rwanda, Burundi, Zambia, Zimbabwe, Malawi and South Africa. EAFCA Kenya Chapter Chairman Etienne Delbar said delegates from Cameroon, Gabon and Togo also attended the conference and expressed hope that they would join the fast-growing body, which is now the most influential in the region.

Kenya : A Kenyan coffee farmer cooperative says it has seen a dramatic increase in prices following a certification project. Kangunu Farmers from Murang'a region in central Kenya received a record $601 per 50-kg bag for a 46-bag lot sold in mid-December.

Ethiopia : Ethiopia starts trading premium coffee locally. According to reports from Addis Ababa the country moved trade in its specialty coffee to a local commodities exchange, instead of selling the beans at overseas auctions. Up to 30% of the beans from Africa's biggest coffee producer are classified as premium, but higher prices for the fine coffees were not trickling down to farmers, the Ethiopian Commodity Exchange (ECX) said.

Uganda : Uganda has developed seven new robusta lines that are resistant to the Coffee Wilt Disease that decimated much of its fields in the 1990s, an official said on Saturday. The east African producer is the continent's biggest robusta producer. The sector has been recovering from an outbreak that afflicted around 50 percent of its trees.

Japan : According to analysts, Japan's beverage market suffered an "anaemic" start of the year as overall demand continued to decline, but competition in the industry is likely to remain intense, especially after the failed merger of Kirin Holdings Co. and Suntory Holdings. All companies experienced sluggish vending machine sales because of deteriorating economic conditions, and canned coffee sales slumped accordingly, she said. Kirin saw beverage sales volume fall 5 percent in January as "Fire" brand canned coffee drink sales volume sank 14 percent versus a year ago, but tea-based drinks got off to a good start.

ICO : The coffee community mourns the death of globally well known entrepreneur Emilio Lavazza. The man who helped Lavazza coffee business, grow into a coffee industry giant, died in his native Turin at the age of 78. Emilio Lavazza, who began his career at the business in 1955 was at the helm of the company for nearly 40 years. He was appointed as chief executive in 1971. He became president of the company in 1979 - a position he held until 2008. he was then named honorary president. Lavazza coffees are produced today in four factories in Italy, six in Europe, one in India and one in the United States and can be found in supermarkets worldwide. Lavazza was founded in Turin in 1895 by Emilio's grandfather Luigi Lavazza. With an estimated turnover of 1.5 billion dollars, Lavazza is one of Italy's biggest food groups.

UK : Sainsbury's is claiming to have become the world's largest retailer of Fairtrade products, as its annual Fairtrade sales have risen about 10% on this time last year. There are more than 800 Fairtrade products currently sold in Sainsbury's stores but it efforts to convert its own-label products to Fairtrade in particular seem to have largely contributed to its success. Since July 2007, Sainsbury's has converted all its bananas, as well as 100% of its own brand roast and ground coffee and sugar ranges and 95% of its own brand tea ranges to Fairtrade.

USA Cocoa : Lindt USA and Public Service of New Hampshire have struck a partnership agreement for the burning of cocoa bean shells to produce electricity at Psnh's Schiller Station power plant in Portsmouth. The cocoa bean shells are a byproduct of Lindt's manufacturing process at its nearby facility in Stratham. A test burn of cocoa shells in March 2009 demonstrated that a 30:1 blend of coal and cocoa shells can be successfully integrated in one of the power plant's two existing coal boilers. Last month, New Hampshire's Department of Environmental Services approved the plan to incorporate cocoa bean shells as a supplementary fuel source at Schiller Station on a more permanent basis. Lindt is expected to soon deliver the first load of shells to be burned under the agreement.

UTZ Certified : Sara Lee announced that in 2009 it expanded its lead as the world's largest buyer of Utz Certified coffee by exceeding target of 26,500 tons. For 2010, Sara Lee steps it up, and will source more coffee from sustainable sources, 40,000 tons, than in any previous year. Sara Lee's 2010 target is 33% greater than its previous commitment (30,000 tons in 2009). It also represents a dramatic sixteen-fold increase from a target of 2,500 tons in 2004. The organization, which is the world's third largest coffee roaster and sells its coffee blends under flagship brands such as Douwe Egberts, Senseo, Merrild, Maison du Café, and Marcilla, will source 40,000 tons of sustainable coffee in 2010.

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