Bloomberg News

Rains in Colombia Are ‘Still a Problem’ for Coffee, Volcafe Says

October 28, 2011

Oct. 28 (Bloomberg) -- Rains in Colombia, the world’s second-largest producer of arabica coffee after Brazil, are “still a problem,” according to Volcafe, the coffee unit of commodities trader ED&F Man Holdings Ltd.

The Andean nation may produce its smallest crop in two years in 2011 due to the excessive rainfall, said Mario Gomez, a board member of Colombia’s National Federation of Coffee Growers. Output may slide to less than 8.5 million bags this year, he said last week. In August, the federation cut its forecast to 9 million bags, from 9.5 million previously.

“It keeps raining,” Volcafe said in a weekly report e- mailed today. “The access to the main ports remains difficult.”

Coffee flow within the country remains “disappointing,” the Winterthur, Switzerland-based coffee trader said in the report, adding that the volume of offers remained limited.

“Some intermediaries are withholding coffee and release it on rallies only,” Volcafe said. About 525,000 bags have been registered to date in October, compared with pre-2009 levels of 800,000 to 1 million, the trader said.

Colombian coffee for November and December shipments was at a premium of 20 cents a pound above the price on the ICE Futures U.S. exchange in New York, up from 19 cents a pound the previous week, data from the trading company show.

Arabica coffee for December delivery rose 0.6 percent to $2.36 a pound by 12:16 a.m. on ICE. The beans, which are grown mainly in Latin America, are brewed by specialty companies including Starbucks Corp.

--Editors: Sharon Lindores, Claudia Carpenter

To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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