02. 12. 2012

COFFEE MARKET NEWS 1st - 5th March 2010

Futures Markets :

Arabica : coffee futures settled almost unchanged on the week. Friday's session had the lowest volume of this year. The lack of action reflects the lack of industry interest and lacked attraction for speculators. In the mean time, producers were selling in small quantities. During the week, the Arabica market declined 80 points. Prices consolidated inside a small range. The action was dominated by small specs that tried unsuccessfully to push prices to break the recent lows. A stronger U.S. dollar and a weak technical chart pressured the market near a 5 ½ month low. The physical market remains tight especially for good quality beans.

Robusta : Robusta futures closed lower everyday last week; declining by $52 or 4 %. The market was influenced by the US dollar and a general dip in most commodity markets. In Vietnam, the government plan to stockpile coffee has failed to take off. Lack of funds to finance the plan has caused uncertainty amongst farmers and local dealers.

Currency : The Pound was under pressure in the first half of the week as currency dealers focused on the prospect that the General Election will produce a hung parliament that will fail to tackle Britain's record Budget deficit. The Pound slid below $1.50 for the first time in almost 10 months as polls showed Britain might have its first minority government since 1974, hampering efforts to reduce the nation's debt. Sterling slumped against all 16 of its most-traded peers, weakening against the Euro to more than 91 pence, amid speculation the European Union is nearing an agreement to help Greece manage its budget deficit. During the week the Pound dropped as much as 3% to $1.4784, the lowest level since May 1 2009, trading at $1.4907. It depreciated 1.5% to 90.78 pence per Euro.

Futures and Currency close levels:

Monday

Tuesday

Wednesday

Thursday

Friday

NY May-10 c/lb

131.75 (+0.55)

132.30

132.10

130.20

130.40

Lon May-10 $/t

1294 (+10)

1279

1284

1249

1232

£/$

1.4984

1.4957

1.5103

1.5035

1.5152


Physical Markets:

Brazil : Rain should return to Brazil's main Robusta coffee-growing region this week, easing more than 2 months of drought, however the hot weather has already destroyed a large quantity of cherries. Brazil's Espirito Santo state is the largest producer of Robusta coffee outside Vietnam and farms have been suffering drought since the beginning of the year, when Brazil's tropical summer was unleashing daily rain showers over other nearby states.

Colombia : Colombia's coffee production in February showed little sign of recovering to levels last seen over a year ago as drought delayed ripening of beans, destroyed trees and reduced quality of beans for export. Coffee growers estimate the Colombia produced around 700,000 bags in February, 19.4% lower than the 868,000 bags produced in February of last year and much less than the 1.09 million produced in February 2008.

Guatemala : Guatemala wants to renegotiate a free trade agreement with Mexico to make import tariffs on roasted and ground coffee equal for both countries. The agreement signed in June 2000 between Mexico and Guatemala, which also included El Salvador and Honduras, fixed tariffs for roasted and ground coffee exported from the Central American countries to Mexico.

Tanzania : According to the Tanzania Coffee Board (TCB), a paltry 4,781 bags were offered at last week's coffee auction, with 3,923 bags sold. At the last auction on February 18, 7,263 bags were offered and 5,324 bags sold. Overall average prices at the Moshi exchange were down by $4.16 per 50kg compared with the last auction.

Kenya : Most of Kenya will receive normal to slightly above-normal rainfall during the March-to-May rainy season after heavy downpours in the first two months of 2010, according to the country's Meteorological Department. A succession of below-normal rains in east Africa's biggest economy in the past few seasons has hurt production of tea, coffee and staple food crops such as maize, in addition to lowering water levels at the dams that supply much of the country's power.

Uganda : Ugandan coffee exports tumbled 17.7% in February from a year earlier, depressed by the impact of widespread drought last year, data from the state-run Uganda Coffee Development Authority (UCDA) shows. Uganda is Africa's second biggest coffee grower after Ethiopia and is a leading foreign exchange earner which produces mainly Robusta.

India : exported 84,091 metric tons of coffee since the beginning of the 2009/10 coffee year, up 33% from the 63,148 tons shipped a year earlier, the Coffee Board reported. Exports recorded a 22% increase in value to US$188 million. Coffee production in the subcontinent is expected to rise to 289,600 tons, up 10% on year earlier, according to a forecast issued by the Board in December. Overseas sales in the April-February period were relatively unchanged. Italy and Russia were among the key buyers of Indian coffee.

Indonesia : Robusta coffee exports from the main coffee-growing area on the southern part of Sumatra dropped 35% in February from a year ago. The fall in exports was mainly a reflection of the fact that less stock was carried over from the end of 2009.

Vietnam : Vietnamese coffee farmers held back beans this week in the hope that further gains are possible after a rise in prices from recent lows. Robusta prices advanced in Vietnam's main growing province of Daklak.

UK : Starbucks UK is launching an integrated marketing campaign, promoting its Fairtrade ranges of coffee and brownies. The campaign will include a television advertisement, created by Amv/Bbdo, highlighting Starbucks commitment to coffee quality and its ten-year relationship with Fairtrade.

UK : Costa will launch its new 'Coffee Club', a free card-based reward programme enabling customers to earn points with every purchase. Customers will collect five points for every £1 spent in-store (every point is worth a penny). Points can be exchanged for any free food or drink in-store.

USA : Coffee Bean International, the Portland, Ore.-based specialty coffee roaster and wholesaler, last week announced the launch of the direct trade program, "Project Direct." Through Project Direct, Coffee Bean International works directly with farmers to achieve the mutually beneficial goal of paying higher prices for better-quality coffee, directly improving coffee growers' farms, communities and quality of life. The program now offers Coffee Bean International's private brand retail clients the opportunity to source coffees through these impactful buying relationships. Direct trade, single origin is not a new concept in the coffee world, where micro-roasters have pioneered the practice, but the scale of Coffee Bean International's undertaking is unprecedented. Already, two major national retailers -- Target and The Fresh Market -- have added Project Direct coffee to their private brand offerings.The first Project Direct coffee is from the San Ignacio region of Peru. Working with over 20 independent coffee farmers -- 90 percent of whom are growing organically -- Coffee Bean International is setting coffee growing standards that will lead to the continued improvement of the coffee crop, while farmers receive between $0.40 and $1.00 per pound more than established fair trade prices.

Tea : Kenya produced 37.7 million kg of tea in January, up 48 percent from a year earlier thanks to wet weather in the first half of the month, the Tea Board of Kenya said. Kenya's January production was also 27 percent higher than the same month of 2008, but 9 percent lower than the record 41.6 million kg produced in January 2007. Kenya exported 39.2 million kg in January 2009, up 12 percent from a year earlier.

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