Bloomberg News

European Coffee Warehouses Will Contact NYSE Liffe on Delays

November 25, 2011

(Updates with comments from warehouse manager, Pacorini starting in sixth paragraph.)

Nov. 25 (Bloomberg) -- European warehouses that store coffee for NYSE Liffe will contact the exchange within the next week to discuss solutions after complaints that bean deliveries are too slow, their federation said.

A “surprisingly low” shipment rate is reducing the industry’s ability to withdraw inventories in a “timely manner,” London-based brokerage Marex Spectron Group Ltd. said this month. Warehouses usually keep deliveries to 200 metric tons a day, according to Roel Vaessen, secretary general of the European Coffee Federation in Rijswijk, Netherlands.

“We have made a lot of progress,” Jack Steijn, secretary general of the Amsterdam-based European Warehousekeepers Federation, said by phone from London today following a two-day meeting of its members. “We have ideas and will contact Liffe.”

The warehouse group aims to contact the exchange within the next week, Steijn said. He declined to comment on members’ discussions of possible solutions to the delays during the meeting. NYSE Liffe spokeswoman Ada Anunoby declined to comment when contacted by Bloomberg News today.

Kraft, Sara Lee

The European Coffee Federation, representing companies including Kraft Foods Inc. and Sara Lee Corp., wrote to NYSE Liffe to raise the issue of delivery times, Vaessen said in September. The coffee group has received a response from the exchange and declined to comment further.

Port Real Estate NV’s Wilmarsdonk warehouse at the Belgian port of Antwerp is delivering more than 200 tons of coffee a day, according to Charles Contamine, the site’s general manager.

“The recent demand for logistical bagged robusta coffee has been unprecedented,” Contamine said by phone from London yesterday. “We have been doing our very best to meet our clients’ needs and can confirm we have been delivering substantially more than 200 tons.”

Robusta inventories with a valid grading certificate in warehouses monitored by NYSE Liffe have slid 25 percent from a record high in July. Stockpiles came to 311,670 tons on Nov. 14, against 417,420 tons on July 11, data on the exchange’s website show. Inventories at Antwerp, where 69 percent of the beans are stored, fell 21 percent in that span to 214,980 tons, the data show.

Antwerp, Trieste

“The number of coffee bags withdrawn from Liffe in the past four months does not suggest there is the perceived load- out problem,” said Antonio Garcez, chief executive officer at Pacorini Group, which owns coffee warehouses in European ports including Antwerp and Trieste, Italy.

European coffee roasters Nestle SA, Lavazza SpA, Tchibo GmbH and United Coffee have all said their supplies were unaffected by the delays. Sara Lee declined to comment, according to spokesman Ernesto Duran. Laurie Guzzinati, a spokeswoman for Kraft Foods Europe Ltd., was unable to comment when contacted by Bloomberg News yesterday.

“I don’t know what’s happening in other warehouses, but our company has been cooperating with the market,” Pacorini’s Garcez said by phone from Trieste. “We have taken out more than 200 tons of coffee a day on various occasions.”

Traders taking delivery of the November contract on NYSE Liffe have been “experiencing the limitation of the daily load- out volume, resulting in a long wait to receive the product that needs to be roasted,” Rodrigo Costa, a coffee specialist, wrote in a Nov. 6 report for Sao Paulo-based Archer Consulting. Costa is also a director at Tangara Importadora e Exportadora SA.

Contract Expiry

Robusta for January delivery rose 0.3 percent to $1,892 a ton by 3:31 p.m. on NYSE Liffe in London. The contract expires Nov. 30 and deliveries started Nov. 1.

Most of the beans tenderable to the NYSE Liffe contract are handled by four warehouses at Antwerp, according to Angus Kerr, owner of Coffee ag, a trading company in Cobham, England. The exchange doesn’t stipulate a minimum load-out rate for warehouses.

Daily delivery of 200 tons is usually not a problem, according to Vaessen of the European Coffee Federation. Still, Vaessen cited “specific market conditions where coffee owners wanted to take their coffee out of a warehouse promptly and quickly, and were confronted with capacity limitations.”

--Editors: Dan Weeks, John Deane.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net


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