NEW YORK: Central American coffee exporters and farmers have started picking up their phones to sell coffee again, after a leaf rust disease swept through the high elevations, devastating plants and reducing yields, US importers said on Thursday.
"I'm beginning to see some offers come out of Central America on a voluntary basis," said Christian Wolthers of green coffee importer Wolthers America in Florida.
"The first news was so bad the (reaction) was, 'let's sit down and do our math.' Now they still have to sell what they've harvested. They're selling current crop."
Roya, a plant fungus that kills coffee leaves by sapping them of nutrients, drastically lowering bean yields and quality, reached high elevations for the first time in Central America this crop year (2012/13), catching farmers unprepared.
The International Coffee Organization has forecast the outbreak will result in 3 million 60-kg bags of coffee being lost this year. Roya is widely expected to hamper production in the region even more in 2013/14, though it is difficult to forecast the extent of the damage at this point.
For weeks, US coffee importers have been the ones to call Central American exporters and producers looking to buy beans, rather than the more typical other way around. The exporters and farmers needed time to assess their situation and ensure they still had enough of their harvest to fulfill their contracts, dealers said.
"Some of the producers were making sure they had all their prior contracts covered and now some of the coffee is moving," a US importer said.
"They might have had some forward sales and they didn't want to sell any more until they were sure they could fulfill them, so then maybe some of those contracts are getting filled and if they have extra, they're looking to sell."
Some US roasters, however, are expressing concern about securing supplies from next year's crop due to the expected damage from leaf rust, he added.
"We have a few people who are getting nervous about it. We're getting a few more inquiries about new-crop but there are not really any sellers out there for that reason," the importer said, referring to roya.
Differentials, which represent either a discount or premium on the physical market to the July arabica futures contract trading on ICE Futures US, for Central American beans already sitting in US warehouses have been relatively flat this week, with the exception of Guatemala coffee.
The premium for Guatemala hard bean inched up to an average of 27 cents over July arabica futures, from 26.5 cents over the previous week.
The benchmark arabica contract soared on Thursday, settling up 3.5 percent at $1.3945 per lb, after hitting a three-year low on Monday at $1.3270.
July robusta coffee on the London International Financial Futures Exchange closed up 1 percent at $2,020 per tonne.
<Center><b><i>Copyright Reuters, 2013</b></i><br></center>
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