Steady demand for robusta was seen in Europe’s cash coffee market this week with selling pressure developing as the new harvest in top exporter Vietnam helped reduce price differentials, traders said on Friday. «There was repeated robusta purchasing largely for nearby deliveries with buying spread across a number of roasters,» one trader said. «Differentials are coming down as pressure to free storage space in Vietnam is apparent.»
Old crop Vietnam Grade 2 beans for October/November shipment were offered at differentials of $40 under London’s November robusta contract on Friday against $30 under last week. New crop was also down about $10 on the week but quoted at a premium over futures at $30 above London. Fresh coffee beans from Vietnam’s new 2012/2013 crop are expected to enter the world market on a large scale in November. Harvesting has now started on a small scale and is likely to accelerate in the next three weeks. A larger new crop is generally expected in Vietnam.
«Overall the Vietnamese crop is looking good although development is rather varied,» another trader said. «Estimates of around 27 million bags (of 60 kg) are being heard more often in the market against 24-25 million bags in the previous crop just ended.»
Arabica business was more restrained but with some buying of Brazilian beans noted after differentials were marked down to compensate for an early-week surge in New York coffee futures. Arabica coffee futures soared nearly 4 percent to a 10-week high on Tuesday, on heavy short-covering prompted by concerns of dry weather in top grower Brazil, but drifted down later in the week.
Brazil Swedish-quality beans were at 22 cents under New York’s December arabica contract on Friday against 19 cents under in the previous week. «A small number of some of the bigger industry buyers were seeking arabica from Brazil this week and there was also trader buying from Brazil,» a broker said. «However, there is market talk at the end of the week that perhaps the majority of roasters now have good arabica supply cover up to the end of 2012.»
Buying interest was also seen for Colombian beans as the harvest gathered pace. Colombian Excelso differentials were at 9 cents over New York against 8 over last week. «Buyers are offering 5 cents below this level as they expect a much better Colombian crop this season and so falling differentials,» a trader said.
In the Central American sector, active trade was reported in Honduras beans after producers started to make sales offers for delivery throughout 2013 despite fears about crop losses from disease. Honduras High Grown beans were offered at 6 cents under New York against 4 cents under last week. Some Guatemalan Strictly Hard Beans were traded at 12 cents over New York for shipment from January onwards.
Source: brecorder.com/agriculture-a-allied/183/1245580/
Steady demand for robusta seen in Europe’s coffee market
