Weekly Report Carvalhaes – week of the coffee futures market in lows and the Brazilian physical market closed a lower business volume

Weekly Report – 77th Year – n° 15

Santos, sexta-feira, 04/16/10 – 77th Year – Number 15

We had another week of the coffee futures market in lows and the Brazilian physical market closed a lower business volume; only lots of quality Arabica coffees of the current crop, which are scarce during this period between crops, were disputed when they appeared on the market. Weaker and lighter color coffees of previous crops continue to be traded under strong negative premiums in comparison to fine coffees.

The Green Coffee Association of the USA (GCA) informed that green coffee stocks in the USA increased in March by 136,550 60-kg bags, to 5,583,256 bags, recovering part of February losses, when they dropped 188,855 bags. March balance was positive with a 187,952 bags increase in the stocks of the New Orleans port.

According to the Cooperativa Regional de Cafeicultores de Guaxupé (Coffee Producers Regional Cooperative of Guaxupé – Cooxupé), 30 to 35% of the coffee used by Nespresso in its single serve capsules is from the Cerrado region of the State of Minas Gerais (Cooxupé is a large Nespresso coffee supplier). Nespresso expects to grow two figures in 2010 with over 3 billion Swiss francs (approximately R$4.96 billion) in sales (source: newspaper Brasil Economico). Another piece of news that circulated on the market this week is that the end of the Nespresso patent for its single serve capsules is leading competitors in France to launch “generic capsules” on the market. The same occurred some years ago with the espresso machine pods.

Until April 15, April shipments were at 633,229 bags of Arabica and 8,276 bags of conillon totaling 642,505 bags of green coffee plus 80,595 bags of soluble coffee against 561,483 bags on that same day in the previous month. Furthermore, until April 15, requests to issue certificates of origin for April shipments totaled 1,265,212 bags against 977,745 bags on that same day in March.

From closing on Thursday, April 9, to closing today, April 16, the ICE exchange in New York fell 360 points or R$4.77 (R$8.40) per bag for contracts to be delivered in May. In reais per bag, quotes for delivery in May in ICE closed on April 9 at R$311.40 and today, April 16, at R$301.42 per bag. Today, Friday, the New York exchange closed with a 265-point drop.

Escritório Carvalhaes