DJ India Coffee Prices Up On Export Sales, Firm World Prices

Indian coffee prices continued to climb higher in the week to Thursday in line with international prices, good demand for exports and tight supplies.

Arrivals of the new arabica crop have begun slowly but growers beat a hasty retreat in anticpation of a further rise in prices.

“New arabica beans have arrived in bits and pieces but by and large growers are holding back stocks,” said a Coonoor-based trader in south India.

He said there have been several sales over the week, and many more deals may be struck for exports next month.

Arabicas are being sold for shipment in March, said an exporter from Hassan, a coffee growing region in the southern state of Karnataka.

India’s coffee marketing year runs from January to December, but arrivals of arabicas begin by the end of December, while robustas are mostly harvested in February.

Indian exporters are now offering coffee at a discount of 2 U.S cents a pound over futures contracts on the New York Board of Trade, while buyers are looking for a discount of 4 cents/lb.

“We are still two cents away from buyers’ ideas but aggressive sales may begin anytime now,” said a soft commodities analyst in Bangalore.

Traders believe exports will get a major boost if international prices continue to rise as they have done over the last couple of weeks.

On the New York Board of Trade Wednesday, the March contract settled at $1.0700 a pound, up from $1.0120/lb last week. The May contract settled at $1.0910/lb, up from $1.0330/lb a week earlier.

India exports around 80% of its coffee output, and the country’s arabica coffee is offered at a discount against New York futures contracts. A rise in international prices generally scales up India’s coffee export prices.

Trade in robustas is thin but there have been some sales for deliveries of the current crop, which is in tight supply.

As there is still time for the new robusta crop to be harvested, limited supplies of the current crop are reflecting in terms of firm prices.

Indian robusta is being offered in the international market at a $180/ton premium over the futures contracts on Liffe. On the other hand, buyers abroad are offering a premium of only $160/ton over Liffe for Indian robustas.

Liffe robusta coffee futures climbed around 2.6% in the most active March contract Wednesday to settle $30/ton higher on the day at $1,188/ton. January rose $29/ton to end at $1,165/ton.

Thursday, Robusta Cherry AB, FOB Cochin, was offered around $1,400/ton, up from $1,390/ton last week. Arabica Plantation A was offered at $2,300/ton, compared with $2,200/ton last week.

-By Sameer Mohindru, Dow Jones Newswires; 91-11-2307-4020; sameer.mohindru@dowjones.com

(END) Dow Jones Newswires