Coffee Market Report 6th to 10th January 2014

COFFEE MARKET NEWS 6^th January –10^th January 2014

Coffee Prices, Futures and Currency close levels:

Futures Markets:

Arabica:  Tumultuous weekly performances especially the last few days with market closing at 120.65. Players began to digest possibilities of a significant lower Brazil crop, roasters are absent and with the USD on the back foot, market enjoyed positive days. On the technical side, prices will be required to roll over below 115.00 over a period of days to break the trend.

Robusta:  Impressive week gathering upside pace and attracting new positions as the “Managed Money” long added and the “Other Reportable” short covered to generate a powerful buying force. The overall impact on the open position was limited as a result despite a $100 rally! The flow of coffee is still yet to materialise with concerns as some coffee already shipped are not fixed.

Currency:   GBP/EUR rose to €1.2151, the highest in a year while GBP/USD touched $1.6495 before easing. Euro under pressure with EUR/USD slipping to a one month low of $1.3547 before pushing back above the $1.36level.

Physical Markets:

Brazil: 2014/15 crop is expected to fall well below expectations as a result of hard pruning and tired trees after two consecutive bumper harvests, Volcafe, the Swiss-based coffee division of commodities house ED&F Man, said on Monday. It lowered its output forecast to 51 million 60-kg bags from a November forecast of 60 million.

Guatemala: Exports from Guatemala fell by 1.95 % in December from the same month the previous year, the national coffee association, Anacafe, said on Tuesday. Guatemala, Central America's second-biggest coffee producer, exported 137,589 60-kilogram bags last month.

El Salvador: the industry continues to grapple with the rapid spread of a deadly fungal outbreak. The country's current crop appears to have dodged a bullet from last month's volcanic eruption, a top government minister said on Wednesday.

Costa Rica: exports from Costa Rica fell by 35.3 % in December compared to the same month last year, the country's national coffee institute ICAFE said on Monday. Costa Rica exported 64,784 60-kilogram bags in December, down sharply from 100,119  60-kg bags in the same period last year.

Kenya: About 20,000 bags on sale in Tuesday’s auction, Sale No 7. Good quality (main crop)is  increasing in volume. AA prices a bit lower and AB steady. Overseas buyers showing good interest since the beginning of the new year..

Ethiopia: 3.8 tons of Washed coffee during first and second week  in the European calendar have been traded at the ECX auction center. The actual sales volume is far behind last year and the government is again and again pushing exporters to sell as they need the foreigncurrency to import all major  food and construction materials.

Tanzania: Some lower end of the season qualities were auctioned off ex South (abt. 5000 bags) and mostly reasonable Northern coffee amounting to some 6000 bags. Rather steady prices were fetched across all qualities/grades. Obviously some more Northern coffees will come to the market.

Papua New Guinea: Coffee flow continues to be very slow which is not encouraging for the new crop. In past years figures indicated that a small fly crop is generally associated with good volumes during the main season. There was some interest for nearby positions but sellers have been reluctant and wait for the coffee flow to improve.

Indonesia: Over Christmas and New Year all were mostly closed and action has picked up only since Monday. Robusta differentials on lack of interest are now in line with equivalent Vietnamese coffees. December exports at 30k tons unchanged to last year.

India:  Prices displayed a mixed trend at last week's auction, weighed down by weak global leads and support from domestic roasters. Coffee output may fall 10.23 percent to 311,500 tonnes in the year starting October 2013 due to untimely rains in southern Karnataka state, the major producer, the government-run Coffee Board said in its post-monsoon crop forecast.

Uganda: Robusta flowing well, though some concern that overall quantity might be smaller. Local prices and asking differentials respectively go higher. Business picked up a bit after quiet days towardsend of the year. Arabica, washed and unwashed activities slow, asking prices mixed.