-
7/30/2019 Coffee Market 2610
1/3
VOLCAFE LTD
WEEKLY MARKET REVIEW OCTOBER 19 - 25, 2012 October 26, 2012
BRAZILIAN EXPORTS AN ACID TEST FOR ARABICA DEMAND
1. GENERAL
last season, ie the 11/12 coffee year, arabica coffee
disappearance fell by a startling 6% onthe year to just 60.8 mio
bags by our preliminary count. we use disappearance to guide
ourdemand estimates.
we are expecting arabica demand in importing markets to rebound
a touch in 12/13. perhapsnot to 10/11 levels, but at least back to
09/10 levels.
part of this rebound would entail that the brazil arabica export
pace would pick up.
to support any arabica demand rebound forecast, brazil shouldbe
exporting more than 3 miobags of coffee this month. october is
normally the largest export month of any crop year inbrazil.
cecafe say today that the rate of exports is up only one-third
on last months dire volume ofexports. at this rate, the 3 mio bags
wont be reached.
arabica demand is thus so far underperforming expectations,
again.
all this is not to say total coffee demand is struggling. on the
contrary.
conservatively, we estimate 11/12 global coffee demand at 141.5
mio bags, and see almost146 mio bags of global coffee demand in
12/13.
the world cannot get enough of robusta.
in new york we estimate specs are short 22k lots, and index
funds 42k lots long. london fundposition +11k lots long. ice
certified stocks at 2.39 mio bags, liffe certified stocks at 1.99
miobags.
2. PRICE COMPARISON (all in cts/lb) change vs25.10.2012
18.10.2012
ice dec 12 161.00 2.40liffe nov 12 92.03 0.36arbitrage ice dec
12/liffe nov 12 68.97 2.04
comments basis ice dec 12 at 160.85 and liffe nov 12 at 2026ice:
commerce and industry are sticking to the sidelines for now.
arabica is taking a small breatheras higher lows and lower highs
are forming a pennant over the week. look for a definitive break
ofthe 159 area to dispel this and for the downtrend to
resume.support: 157.2, 156.6, 153.8, 140. resistance: 161.8, 162.5,
165.7, 170.liffe: robusta volume has been abysmal the last few
days. already ranging between 1980-2220, theprice has, like ice,
retreated to an even tighter range over the week. both markets are
waiting for
some action which will likely be significant when it
comes.support: 2015, 2000, 1980, 1822, 1713. resistance: 2072,
2112, 2217-2223.
-
7/30/2019 Coffee Market 2610
2/3
VOLCAFE LTD
3. BRAZIL
local market: the small ny rally early this week brought more
volume to the market. moderate
size was traded and producers are holding large stocks.
replacement differentials have notchanged much, with fine cups
still trading around level money internally. bmf/ny arbitrage a
bitsofter. october shipments should finish higher than september,
but well behind october 2011.
export activity: again, very little activity. fine cup coffees
remain expensive. some exportersoffered good cup qualities below
local market levels, finding some demand, but only for firsthalf
2013.
weather: increased rains, and more shower activity is forecasted
for next week.
bmf: z 206.50 (unch)
arbitrage bmf/ice: z/h 9.00 (2.00 softer)
exchange rate: 2.0250 (reval 0.20%)
4. COLOMBIA/LATIN AMERICAN MILDS
colombia: the internal coffee flow did not change much, prices
remain firm. outside interestwas scattered with most interest
focusing on nearby shipments.
guatemala: some coffee producing areas, such as huehuetenago,
are expecting a very goodcrop and producers are happy with the crop
development. although there are some smalloutbreaks of roya,
plantations look in very good shape, good bean development and
size,and the work of producers in terms of fertilization, renewal
of plantations and cultural practicesis evident.
honduras: no great change in the flow of coffee yet. external
demand was on-and-off withmain interest for early shipment periods,
offering diffs unchanged.
costa rica: outside demand was patchy, quick shipment periods
attracted most attention. peru: mainly low qualities were available
in the internal market as farmers do not want to sell
the better qualities due to the present ice prices. the amazonas
as well as the cajamarcaregions received good rainfalls. the
flowering in the central regions is in full swing.
5. AFRICA/PNG
kenya: no auction this week. harvesting progressing well and
first main crop estate qualitiesexpected to be available for
shipment late december/january. sporadic demand in all gradesfor
nearby shipments.
tanzania: some 27,000 bags on offer this week, whereof some
4,000 bags received no bids atall due to questionable quality.
average waiting time for a vessel in dar es salaam hasincreased to
21 days.
ethiopia: only limited origin biz reported this week. firm ecx
prices of specially sundriedlekempti coffee preventing exporters
from offering at competitive levels. harvesting of newcrop expected
to start in earnest early november in sidamo region.
uganda: drugars have tightened up on the back of strong internal
demand. washed qualitiesattracting increased attention, diffs
tending softer.
png: ongoing poor supply pushing local prices higher. wet
weather reported from the highlandsas well as lae port, with time
between eta & etd of vessels in port increasing. no fresh
bizreported.
-
7/30/2019 Coffee Market 2610
3/3
VOLCAFE LTD
6. ROBUSTAS
vietnam: ideal weather for the start of the season with good
sunshine drying the first pickings.
local market has been lively with good buying opportunities.
stable forex and lending ratesencourage new crop sales from viet
shippers. exports are up 73% year on year as the end ofthe old crop
finds its way out. fob market very active this week despite a
depressed liffe. offersfrom every corner, for all specs with good
diffs. we see trade covering their dec/jan shipmentsand stockpiling
in warehouses as well.
indonesia: volume of asalan has slowed down to between 800 900
mt arrivals per week.differentials remain steady, due to lack of
coffee bean availabilities. asalan traded between idr18,500 and
19,750 per kg this week. local activities are quiet, in conjunction
with idul adhacelebration on 26th october 2012. usd remains firm,
and traded in the range of 9,610 9,635.
uganda: there is a very small early flow from the east where the
crop is not as promising as inthe central area. the weather is hot,
sunny and harvest friendly. the shilling hovers around the2600
mark. logistics are ok.
7. ORIGIN DIFFERENTIALS FOR NOV/DEC SHIPMENT CTS/LB FOB
this week last weekbrazil swedish c - 19 c - 19colombia excelso
c + 10 c + 9honduras hg c - 4 c - 4kenya ab faq c + 34 c +
34vietnam gr 2 liffe - 25 liffe - 10indonesia gr 4 (max. 80
defects) liffe + 30 liffe + 30
regardsVOLCAFE LTD
