Brazilian and Colombian arabicas were in demand in Europe's cash coffee market this week, but overall business volumes were relatively thin, dealers said on Friday. "European roasters appear to have pretty good supply cover and seem confident enough to sit and wait for further developments as New York futures were still range-bound this week," one trader said.
"Buyers are also waiting for the initial results of the new Central American harvest which is just getting underway." Brazilian fine cup and good cup grades traded in notable volumes with differentials looking attractive, traders said. Brazil MTGBF arabica for September onwards shipment was on Friday offered for sale at a differential of 27 cents under New York's December contract, against 24 cents under last week.
Colombian arabica was purchased for a wide range of shipment periods between September 2014 and June 2015, traders said. "Weaker differentials generated demand for Colombian beans, with some short-covering taking place on concern that recent dry weather in the country may have damaged yields," another trader said. Colombia Excelso beans for September/October shipment were at 11 cents over New York December against 13 cents over last week.
Central American harvesting is starting with coffee roasters waiting to see what the impact will be in the new season of the tree-killing fungus roya, which cut the region's exports this year. "Roasters were seeking prices for the new crop in Honduras this week as harvesting is starting, but I think traded volumes were thin," a trader said. "Harvesting has also now started in Guatemala but business volumes also appeared low."
Honduras High-Grown grades for September/October shipment were unchanged on the week at 3 cents over New York December. Guatemalan SHB for September/October shipment was at 22 cents over New York, down from 24 cents over last week. Some trade was reported in Peruvian beans as better quality than expected reached the market, although most buyers were said to be from the United States, traders said.
In robusta, trade was restrained by declining supplies as the season in top producer Vietnam entered its final few months while weak London robusta futures also deterred farmer selling, traders said. "Lack of supplies from Vietnamese farmers meant some local exporters are talking about wash-outs (contract buybacks) with international trading houses this week," a dealer said. Vietnam Grade 2 robusta for September onwards shipment was quoted at $20 under London nearby London robusta futures against $40 under last week.
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