Buyers of arabica coffee from Brazil, the world’s largest-producer, are getting a bigger discount for beans from the new season that starts in July as exporters don’t need to buy now, according to Flavour Coffee.
Fine cup beans from the new season are trading at a discount of 13 cents a pound to the price on the ICE Futures U.S. exchange in New York for shipment from August to December, the Rio de Janeiro-based broker said in a report e-mailed yesterday. That compares with a discount of 8 cents a pound for beans from the 2011-12 season, the broker said.
Buyers of good cup quality beans from the new season were getting a discount of 22 cents a pound to the exchange price for shipment from August to December, compared with a discount of 15 cents a pound for beans from the 2011-12 season, Flavour Coffee data show. Fine cup beans are usually more expensive than good cup ones because of their taste profile.
“Exporters do not seem desperate buyers but they still need to cover their later 2011-12 crop commitments therefore they keep in the market,” Flavour Coffee said.
Roasters are “waiting for differentials to soften even more,” Thiago Cazarini, a broker at Varginha, Brazil-based Cazarini Trading Co., wrote in a separate report yesterday.
Rains that reached arabica growing regions this week suspended harvesting, Flavour Coffee said, adding that more rainfall is expected in the next seven days. Some beans from the new season that were drying on patios may be affected, Cazarini said.
Buyers of robusta coffee from Brazil were paying a premium for their beans even as about 30 percent of the new crop has been harvested and supplies are improving, according to the Flavour Coffee report.
Conilons, as Brazilian robusta coffee is known, are trading at a premium of 2 cents a pound ($44 a metric ton) to the price on the NYSE Liffe exchange in London for June shipment, according to the broker.
“Prices firmed up further despite the great availability due to increasing arrivals of new crop,” the broker said. Local roasters accelerated purchases and exporters were also buying, according to the report.
Robusta coffee for July delivery was up 0.5 percent to $2,198 a ton by 10:39 a.m. on NYSE Liffe. Arabica coffee for July delivery was little changed at $1.803 a pound on ICE Futures U.S.
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.