Europe coffee: Robusta in demand as Vietnam’s harvest starts – Reuters

Fri Oct 5, 2012 11:28am EDT

* Roaster buying interest for robustas

* Differentials weaken as Vietnamese crop starts

* Large industry buyers seek Brazilian arabica

HAMBURG, Oct 5 (Reuters) – Steady demand for robusta was
seen in Europe’s cash coffee market this week with selling
pressure developing as the new harvest in top exporter Vietnam
helped reduce price differentials, traders said on Friday.

“There was repeated robusta purchasing largely for nearby
deliveries with buying spread across a number of roasters,” one
trader said. “Differentials are coming down as pressure to free
storage space in Vietnam is apparent.”

Old crop Vietnam Grade 2 beans for October/November shipment
were offered at differentials of $40 under London’s November
robusta contract on Friday against $30 under last week.
New crop was also down about $10 on the week but quoted at a
premium over futures at $30 above London.

Fresh coffee beans from Vietnam’s new 2012/2013 crop are
expected to enter the world market on a large scale in November.
Harvesting has now started on a small scale and is likely to
accelerate in the next three weeks. A larger new
crop is generally expected in Vietnam.

“Overall the Vietnamese crop is looking good although
development is rather varied,” another trader said. “Estimates
of around 27 million bags (of 60 kg) are being heard more often
in the market against 24-25 million bags in the previous crop
just ended.”

Arabica business was more restrained but with some buying of
Brazilian beans noted after differentials were marked down to
compensate for an early-week surge in New York coffee futures.

Arabica coffee futures soared nearly 4 percent to a 10-week
high on Tuesday, on heavy short-covering prompted by concerns of
dry weather in top grower Brazil, but drifted down later in the

Brazil Swedish-quality beans were at 22 cents under New
York’s December arabica contract on Friday against 19
cents under in the previous week.

“A small number of some of the bigger industry buyers were
seeking arabica from Brazil this week and there was also trader
buying from Brazil,” a broker said. “However, there is market
talk at the end of the week that perhaps the majority of
roasters now have good arabica supply cover up to the end of

Buying interest was also seen for Colombian beans as the
harvest gathered pace. Colombian Excelso differentials were at 9
cents over New York against 8 over last week.

“Buyers are offering 5 cents below this level as they expect
a much better Colombian crop this season and so falling
differentials,” a trader said.

In the Central American sector, active trade was reported in
Honduras beans after producers started to make sales offers for
delivery throughout 2013 despite fears about crop losses from
disease. Honduras High Grown beans were offered
at 6 cents under New York against 4 cents under last week.

Some Guatemalan Strictly Hard Beans were traded at 12 cents
over New York for shipment from January onwards.

(Reporting by Michael Hogan; Editing by Pravin Char)

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