Price differentials for Colombian beans fell in Europe's cash coffee market this week on expectations of a larger harvest following several years of poor crops, traders said on Friday. Differentials for Colombia Excelso beans for November/December shipment fell to 9 cents over New York arabica contracts from 10 cents over last week and 11 cents over at the beginning of October.
"Colombian differentials fell to single digits for the first time in several months and this has sparked more purchase interest at a time Colombian producers are also selling briskly," one trader said. Colombia's coffee harvest in September was up 66 percent on the year and local growers are confident of further increases. "Signs are intensifying that Colombia is gathering an excellent crop," another trader said. "Colombian beans are looking much more attractive to roasters than expensive Central American beans." Central American differentials remained high and often well over rival Colombia partly because of continued uncertainty about the disease roya which severely damage some crops this year in countries including Guatemala.
Guatemala SHB was 19 cents over the New York March contract , little changed on the week. Guatemalan current crop trade focused on top quality grades, and prime/extra prime beans, one dealer said. With arabica coffee futures still hovering close to the more than four-year lows hit on September 17, selling interest from top exporter Brazil was again slack this week, traders said.
Brazil Swedish quality beans for November/December shipment were unchanged on the week at 20 cents under New York. "Overall we saw buyers hoping that prices will fall further and unhappiness among origin producers about current low futures," another trader said. Roaster purchase interest was noted in African arabicas. Ethiopia EK-1 beans for November/December shipment rose to 14 cents over New York from 12 cents over last week. In robustas, a very large spread between new and old crop prices for Vietnamese beans continues as the country's harvest starts.
The new crop season began this month in Vietnam, where the 2013/14 crop is forecast to hit a record 25 million 60-kg bags in the season to September 2014, a Reuters poll shows. Vietnam grade 2 robusta for nearby shipment was unchanged at $120 over nearby London robusta contracts, way above the $30 to $60 over London for Vietnam grade 2 new crop beans shipped in December.
"Internal problems in Vietnam with value added tax disputes with the government kept exporter selling low this week," one trader said. "Roasters are waiting for the new crop to arrive in large volumes in December and depress prices." "Roasters and have been buying up robusta stocks in Europe for their immediate needs."
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