Bloomberg News

Brazil's Coffee Exports Seen Rising This Month From Last

October 26, 2012

Coffee exports from Brazil, the world’s largest producer of the commodity, may rise 23 percent in October from a month earlier, according to Rio de Janeiro- based broker Flavour Coffee.

Shipments may climb to 2.7 million bags of 60 kilograms (132 pounds) this month, the broker said in a report e-mailed yesterday. That compares with 2.2 million bags exported in September, according to data from the country’s coffee exporters’ council, known as Cecafe. Brazil exported 3.175 million bags in October last year, Cecafe data showed.

“The pace of issuing certificates this month is much faster than in September,” Flavour Coffee said. “So far, shipments and certificates are about 20 percent faster.”

Brazilian coffee exports will drop to 29 million to 30 million bags in 2012 from about 33 million bags a year earlier after above-average rainfall earlier this year delayed harvesting and reduced bean quality, Guilherme Braga, head of Cecafe, said in an interview in London on Sept. 25.

Growers have been holding back beans after arabica coffee futures traded on ICE Futures U.S. exchange fell 29 percent this year.

“The volume of business is very low with no interest from buyers or sellers to sell at current levels,” Thiago Cazarini, a broker at Varginha, Brazil-based Cazarini Trading Co., said in a separate report. “Talking about Brazils, it’s a question mark to see who will throw in the towel first, producers or the buyers.”

Fine Cup

Fine-cup arabica coffee beans from Brazil were trading at a discount of 5 cents a pound to the price on ICE, according to Flavour Coffee data. That compares with 9 cents a pound last week. Good-cup quality coffee was at a discount of 12 cents a pound, from 17 cents a pound last week. Fine-cup beans are usually more expensive because of their taste profile.

Rains over Brazil’s coffee belt have been “ideal” for the flowers that blossomed before the 2013-14 crop that starts next year, Flavour Coffee said. A new cold front set to reach the southeast region will bring widespread showers to coffee areas in the first days of November, according to Sao Paulo-based forecaster Somar Meteorologia. Flowerings in the coffee belt suggest “good potential” for next year, Cazarini said.

Conillons, as Brazilian robusta beans are known, were at a premium of 15 cents a pound ($331 a metric ton) to the price on the NYSE Liffe exchange in London, down from 20 cents a pound a week earlier, according to Flavour Coffee data.

“With the continuous huge premium over Liffe” only a few transactions “have been reported to the Middle East and sporadic short covering,” the broker said.

Robusta coffee for January delivery was down 0.9 percent to $2,039 a ton by 12:12 p.m. in London. Arabica coffee for December delivery slid 0.6 percent to $1.60 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.


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