Buyers of robusta coffee from Brazil, the world’s second-biggest grower of the variety, are paying a premium for the beans even as up to 30 percent of this year’s crop has been harvested, according to Flavour Coffee.
Conillons, as Brazilian robusta coffee is known, are trading at a premium of 3 cents a pound ($66 a metric ton) to the price on the NYSE Liffe exchange in London for June and July shipments, the Rio de Janeiro-based broker said in a weekly report e-mailed yesterday. That compares with a premium of 2 cents a pound a week earlier, Flavour Coffee data show.
Harvesting of the 2012-13 robusta crop is 25 percent to 30 percent complete, the broker said. Growers in the South American country will pick 12.3 million bags of conillons this season, up from 11.3 million bags last year, according to the government. Estimates from the private sector are higher, with Terra Forte Exportacao e Importacao de Cafe Ltda., the country’s second- biggest exporter, forecasting 16.5 million bags.
“Despite the increasing availabilities, the market is behaving surprisingly steady with big local demand,” Flavour Coffee said in the report. “Offers remain at premiums over Liffe for all qualities but dealers’ bids are in general too far apart.”
Roasters have been “active buyers” in the local market, and traders who had sold beans for delivery in May are purchasing most of the new crop arrivals, the broker said. Most of the beans that were dried and cleaned have already been sold, according to the report.
Buyers of arabica coffee continued to get a discount, the report showed. Fine cup beans for May and June shipments were trading at a discount of 9 cents a pound to the price on the ICE Futures U.S. exchange in New York, compared with 8 cents a pound last week, according to Flavour Coffee data.
Good quality cups for June and July shipments were at a discount of 15 cents a pound, unchanged from last week, Flavour Coffee said. Fine cup beans are usually more expensive than good cup ones because of their taste profile.
Brazil’s growers will harvest 38.1 million bags of arabica coffee, up from 32.2 million in 2011-12, according to the government. Trees have entered the higher-yielding half of a two-year cycle. A bag of coffee weighs 60 kilograms (132 pounds). Brazil is the biggest arabica grower.
Robusta coffee for July delivery was up 0.7 percent to $2,239 a ton by 10:26 a.m. in London. Arabica coffee for July delivery was little changed at $1.6705 a pound in New York.
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.