Tanzania coffee prices edge higher as supply falls

DAR ES SALAAM, Dec 17 (Reuters) – Tanzania’s coffee prices

rose at auction last week, tracking higher New York and London

markets, the regulator Tanzania Coffee Board (TCB) said on

Tuesday.

The state-run TCB said 18,046 60-kg bags were offered at the

latest sale and that 14,401 bags were purchased. At the previous

sale, a total of 24,685 60-kg bags had been offered for sale,

with 18,892 bags sold.

“Overall average prices at the Moshi exchange were up by

$4.80 per 50 kg for mild arabica and robusta prices were up by

$19.53 per 50 kg compared to the last auction,” TCB said in its

auction report.

“Average prices at the Moshi exchange were above the

terminal market by $6.54 per 50 kg for mild arabica and robusta

were above the terminal market by $15.59 per 50 kg.”

TCB said benchmark grade AA sold at $110.00-$170.00 per bag

at last week’s auction, higher than $100.00-$123.20 per bag

previously. The average price was $119.28 per bag, up from

$112.41 at the previous auction.

Grade A fetched $112.60-$119.20 per bag, compared with

$113.00-$119.40 per bag at the previous sale. The average price

was $117.42, from $115.78 previously.

Tanzania, Africa’s fourth-largest coffee producer after

Ethiopia, Uganda and Ivory Coast, produces mainly arabica and

some robusta coffee. Prices of its arabica normally track the

New York market while those of robusta take their cue from

London.

TCB said New York markets rose by $1.71 per 50 kg, while

London markets also inched higher by $6.05 per 50 kg.

East African coffee is normally packed in 60-kg bags, but

the prices are quoted for quantities of 50 kg.

The TCB says it expects the 2013/14 crop to fall to 45,000

tonnes from around 71,600 tonnes in the previous season, the

highest output in 20 years.

The next auction will be held on Thursday, but the

regulator said it was considering suspending next week’s auction

due to year-end holidays.

 

PRICE (dollars)

GRADE

OFFERED SOLD LOW HIGH AVERAGE

Arabica AA 5,481 4,109 110.00 170.00 119.28

Arabica A 2,921 1,978 112.60 119.20 117.42

Arabica AB 3,086 2,829 106.00 160.00 119.62

Arabica B 1,860 1,487 100.00 116.60 114.92

Arabica PB 1,143 982 102.00 129.00 117.08

Arabica C 1,490 1,419 76.00 107.00 94.57

Arabica Organic 468 – – – –

Robusta Organic 1,597 1,597 90.00 90.40 90.09

Source

Coffee…A Multi-year low is now in the Rear View

by Matthew Bradbard of RCM Asset Management

For the last five weeks a base has been building in March coffee futures just above the $1.05 level. Two significant developments this week we will see a settlement above the 20 day MA and with futures trading at their highest trade in seven weeks it appears we will get a  settlement above the down sloping trend line that had capped upside for the last seven months. Current trade has futures 3.50 cents below the 50 day MA (light blue line) which has not been penetrated in all of 2013. I expect that to play out in the coming weeks with my objective being the 38.2% Fibonacci level near $1.30 on this contract. The train is just leaving the station and I believe their is time to get on board. The seven year low that was reached in recent weeks may not been revisited for many years in my opinion.

The recent  appreciation has been accentuated by short covering and the idea that a near-term shortage of Robusta beans has the potential to drive up demand for Arabica. Growers in top Robusta producer Vietnam have been holding back their beans, waiting for higher prices…despite harvesting a bumper crop. That has lifted coffee prices on the Liffe to a near 3 1/2 month high. The gap between the two different blends narrowed last week to a five year low near 28 cents/lb. A rise in consumption is expected by 1.6% year over year in Arabica – the largest jump since 07-08′. Before getting too excited 14′ is expected to be the third year of surplus production so Bulls should take their profits on a spike higher in the coming weeks.

Source

 

 

Vietnam Coffee Premium Seen by Volcafe Sliding as Sales Pick Up

By Isis Almeida  Dec 16, 2013 7:11 PM GMT+0800

Coffee beans from Vietnam, the world’s biggest grower of the robusta variety, are trading at a smaller premium as farmer sales are “picking up” and buyers are reluctant to pay as much, according to Volcafe Ltd.

Vietnamese beans for shipment in January and February were at a premium of $30 a metric ton to the futures on NYSE Liffe last week, the unit of commodities trader ED&F Man Holdings Ltd., said in a report e-mailed on Dec. 13. That compares with $50 a ton a week earlier. The beans used to make instant coffee and espresso gained for five consecutive weeks, the longest weekly advance since March 2011, as stockpiles tumbled.

“Differentials are easing versus the nearby months on Liffe as buyers are reluctant to pay the premium,” the Winterthur, Switzerland-based trader said, referring to the amount paid for physical coffee in relation to the price in the futures market. “Vietnamese farmer selling is picking up.”

Robusta coffee futures fell 8 percent this year partly as traders anticipated a record crop in Vietnam. The Southeast Asian nation will produce a record 30 million bags in the 2013-14 season started Oct. 1, Volcafe estimates. Prices rebounded last month as stockpiles in warehouses tracked by the exchange tumbled and shipments from Vietnam slowed.

Inventories of the variety fell 32 percent to 31,420 tons in the two weeks to Dec. 9, exchange data showed. That was the lowest level since at least 2002. Shipments from Vietnam declined to 61,155 tons and 80,000 tons in October and November, according to the General Statistics Office. That’s down from 102,000 tons and 122,000 tons a year earlier.

Sales

“Farmers sold around 10 percent to 12 percent so far,” Volcafe said, commenting on this season’s crop. “With six weeks to go before Tet, we should see some good volume hit the market during this time,” the trader said, referring to the festival that marks the Lunar New Year. Farmers usually boost sales before Tet.

In Indonesia, the third-biggest robusta grower, bean deliveries from farms accelerated to about 1,700 tons last week, Volcafe said. That compares with 1,500 tons a week earlier, data from the trader showed.

Indonesian coffee for shipment in January and February was at a premium of $190 a ton to the London futures last week, unchanged from a week earlier, according to the report.

“Local suppliers are reluctant to sell and prefer to keep the goods and monitor the market development,” the trader said. “Due to expensive differentials and end of season, almost no activity seen in the export market.”

A bag of coffee weighs 60 kilograms (132 pounds).

Source

 

Robusta coffee rises

December 13, 2013

Liffe robusta coffee prices rose on Thursday to match the 3-1/2 month high hit earlier this week as dealers expect another drawdown of exchange-certified stocks, while ICE raw sugar slipped to the lowest in more than three months. Cocoa futures climbed toward a more than two-year high, supported by expectations of an abrupt end to top grower Ivory Coast’s main crop in the coming weeks. 

Liffe March robusta coffee were up $31, or 1.8 percent, at $1,778 a tonne by 12:18 pm EST (1718 GMT), having earlier matched the 3-1/2-month high of $1,803 hit on Tuesday. The market remained in backwardation, with the nearby contracts more expensive than deferreds, implying limited availability of coffee in the short term. The January/March spread widened to a $48 January premium, up from $43 on Wednesday but below $56 on Tuesday, which was the widest since January. 

The March contract is showing technical strength having risen above its 100-day moving average earlier this week and heading toward the 200-day level at $1,846. It has also climbed above the 61.8 percent Fibonacci retracement level at $1,770, from the July peak. 

Dealers said that shrinking certified robusta stocks were supporting the market as firm differentials on the physical market have encouraged roasters and traders to use exchange coffee stored in European warehouses in recent months, rather than shipping from origin. 

“Vietnamese farmers have been holding back beans from the market as the harvest nears its end in an effort to push up prices,” said Edward George, head of soft commodities research at Ecobank. 

March arabica futures on ICE rose 1.7 cents, or 1.6 percent, to $1.1140 per lb. 

In sugar, ICE March futures fell 0.17 cent, or 1.1 percent, to 16.34 cents a lb, just above the session low at 16.32 cents, the lowest since August 30. 

Dealers said technicals based on long-term price charts indicated that the market is vulnerable to further losses. “The next major level is 15.93. On a technical basis the market looks poor,” a London-based broker said. 

March white sugar on Liffe was down $4.10, or by 0.9 percent, at $445.00 per tonne. 

ICE March cocoa settled up $32, or 1.2 percent, at $2,787 a tonne, nearing a more than two-year high of $2,844 hit last week, as arrivals at Ivory Coast ports were expected to tail off sharply in January. 

March cocoa on Liffe closed up 35 pounds, or 2 percent, at 1,769 pounds a tonne. Dealers expected a large delivery against the December contract. 

Copyright Reuters, 2013

Source

 

 

Robusta Coffee Spread Gains to Record on Vietnam; Cocoa Retreats

By Isis Almeida  Dec 9, 2013 8:31

The premium robusta coffee for delivery in January commands over the March futures climbed to a record, signaling tightening supplies as shipments fall from leading producer Vietnam and stockpiles dwindle. Cocoa dropped.

The beans used to make instant coffee and espresso for January delivery climbed to as much as $49 a metric ton above the March futures, a record since the spread started trading in July 2012. Vietnam’s coffee exports fell in the past two months and robusta stockpiles in warehouses tracked by NYSE Liffe are at the lowest since at least 2002, data on Bloomberg showed.

“The spot month has been supported by limited flow of Vietnamese 2013-14 crop,” Andrea Thompson, head of research and analysis at CoffeeNetwork, a unit of brokerage INTL FCStone Inc., said by phone today from Belfast, Northern Ireland. “The Liffe certified stocks have been the main source of robusta stocks and they continue to decline.”

Robusta coffee for January delivery gained 2.1 percent to $1,758 a ton by 12:14 p.m. on NYSE Liffe in London. The spread between the January and March futures was trading at $45 a ton from $30 a ton a week earlier. That market structure, in which earlier-dated contracts are priced higher than deferred ones, is known as backwardation and may signal limited supplies.

Vietnamese coffee exports in October and November were just over 150,000 tons, down from 240,000 tons a year earlier, Volcafe, a unit of commodities trader ED&F Man Holdings Ltd., said in a Dec. 6 report. Bean stockpiles in Ho Chi Minh City increased during both months and carryover inventories in the hands of farmers were among the highest ever, the trader added.

Inventories in NYSE Liffe-tracked warehouses were 45,900 tons as of Nov. 25. That’s below the 52,000 tons a Bloomberg survey of 10 traders published in August forecast for the end of the year. The exchange will update inventories this week.

Arabica Consolidation

In New York, arabica coffee for delivery in March was 0.6 percent higher at $1.07 a pound on ICE Futures U.S. Futures trading volumes were about average for the past 100 days for the time of day, data compiled by Bloomberg showed.

“Arabica has started to consolidate, but this is more to do with spillover strength from robusta, where certified stocks are falling,” Kona Haque, an analyst at Macquarie Group Ltd. in London, said in a report e-mailed today. She forecast prices may drop to 90 cents a pound next year partly on supplies from Brazil, the world’s largest producer of all coffee varieties.

“With incremental roaster demand still skewed toward robusta, we recommend staying short arabica,” Haque said.

Refined, or white, sugar for March delivery rose 0.6 percent to $451.20 a ton in London. Raw sugar for March delivery was 0.9 percent higher at 16.74 cents a pound in New York.

Cocoa for delivery in March fell 0.6 percent to 1,752 pounds ($2,870) a ton on NYSE Liffe. Cocoa for delivery in the same month slid 0.4 percent to $2,793 a ton on ICE.

Source