Colombia cash coffee: Premiums firm as new supply squeeze nears
31-07-2009

Physical trading failed to pick up this week in the Colombian cash arabica coffee market, despite premiums staying firm against stronger futures prices in the New York arabica market, traders and exporters said.

As supply from the mitaca, or mid-crop, is reported all sold out, traders say exporters already are worrying about availability in the last two quarters of the year, with the buying season ahead of the peak consumption rush in Europe and the U.S. soon expected to start.

“We are already receiving calls from roasters not only in the U.S. but in Europe who want to be sure they can get their supply needs covered for the fall and the coffee is just not there,” said one physicals trader in New York.

As the supply squeeze – which goes back more than a year after three consecutive Colombian crops failed because of bad weather – continued to be reported in the local market, premiums for all main grades edged higher in anticipation of a looming supply deficit in the coming months.

Cash differentials for “usual good quality” Colombian beans were quoted at minimum premiums of 67c/lb, up from minimum premiums last week of 65c/lb.

“There isn’t any supply available anywhere in the producing regions, everything from the mitaca has been collected and sold and although there has been some little business done this week we are talking about very tiny volumes,” said one exporter in Bogota.

With the completion of the mitaca harvest, which was reported to be down up to 50% in all key producing regions of southern Colombia’s coffee belt, exporters are headed for a period of up to four months before new supply will arrive.

As the pressure continued to build, the daily Colombian export price set by the National Federation of Coffee Growers, or Fedecafe, this week hit a recent high of $1.9266/lb, up from last week’s high of $1.9048/lb and just a little over a month  since it reached at 12-year high at $2.26/lb.

Arabica prices at the ICE Futures U.S. exchange in New York closed higher on Thursday, with the active September ‘C’ contract settling up 2.10 cents at $1.2495/lb, and up 60 points on the week.

Colombia is the world’s largest producer of mild washed arabica coffee, with annual output of between 11.5 million and 12.5 million 60-kilogram bags in recent years, and is the third-largest coffee producer overall after Brazil and Vietnam.

31-07-2009

Physical trading failed to pick up this week in the Colombian cash arabica coffee market, despite premiums staying firm against stronger futures prices in the New York arabica market, traders and exporters said.

As supply from the mitaca, or mid-crop, is reported all sold out, traders say exporters already are worrying about availability in the last two quarters of the year, with the buying season ahead of the peak consumption rush in Europe and the U.S. soon expected to start.

“We are already receiving calls from roasters not only in the U.S. but in Europe who want to be sure they can get their supply needs covered for the fall and the coffee is just not there,” said one physicals trader in New York.

As the supply squeeze – which goes back more than a year after three consecutive Colombian crops failed because of bad weather – continued to be reported in the local market, premiums for all main grades edged higher in anticipation of a looming supply deficit in the coming months.

Cash differentials for “usual good quality” Colombian beans were quoted at minimum premiums of 67c/lb, up from minimum premiums last week of 65c/lb.

“There isn’t any supply available anywhere in the producing regions, everything from the mitaca has been collected and sold and although there has been some little business done this week we are talking about very tiny volumes,” said one exporter in Bogota.

With the completion of the mitaca harvest, which was reported to be down up to 50% in all key producing regions of southern Colombia’s coffee belt, exporters are headed for a period of up to four months before new supply will arrive.

As the pressure continued to build, the daily Colombian export price set by the National Federation of Coffee Growers, or Fedecafe, this week hit a recent high of $1.9266/lb, up from last week’s high of $1.9048/lb and just a little over a month  since it reached at 12-year high at $2.26/lb.

Arabica prices at the ICE Futures U.S. exchange in New York closed higher on Thursday, with the active September ‘C’ contract settling up 2.10 cents at $1.2495/lb, and up 60 points on the week.

Colombia is the world’s largest producer of mild washed arabica coffee, with annual output of between 11.5 million and 12.5 million 60-kilogram bags in recent years, and is the third-largest coffee producer overall after Brazil and Vietnam.