Brazil's February green coffee shipments are expected to be significantly smaller than in January due to slow demand, port strikes and Carnival holidays, traders said on Tuesday.
Shipments totalled 1.08 million 60-kg bags by February 27 against 1.43 million bags at the same time the previous month. In February 2003, Brazil shipped 2.12 million bags of green coffee following a much larger crop.
"Roaster business is very slow. They're waiting for the market to fall again," said Rasmus Wolthers, President of Santos-based exporter Wolthers and Associates.
But he expected business to pick up by mid-March as roasters move to cover July/December requirements.
Traders said that a strike by the national health inspection agency, Anvisa, had disrupted shipments from Brazil's main port of Santos.
Permits to enter port are currently being issued by the health ministry in Sao Paulo.
Last week's Carnival holiday effectively brought business to a standstill for several days, they added.
"People did a lot of business in January and February and are now taking a breather," said a Rio de Janeiro-based broker.
Lack of demand led to a widening of export differentials. Benchmark March/June Swedish quality arabicas were quoted this week at 19/17 cents a pound (bid/offer) under New York CSCE futures, compared with 17/15 cents under before Carnival. July/December shipments were quoted at 20/18 cents under futures.
The speciality coffee market was dormant with no bids reported and offers for March/June pulped naturals unchanged from pre-Carnival at 9 cents a pound under CSCE futures.
On the domestic market, values were a touch easier but still relatively firm. Extra fine south Mina's arabicas were quoted at 210/215 reais (bid/offer) per 60-kg bag compared with 215/220 reais in mid-February.
Robustas, known locally as conillon, were seen pressured by a decline in Liffe futures and approaching harvests in Rondonia and Espirito Santo, the two major robusta producing states.
Harvesting is expected to start within 30 days and 40-50 days respectively.
"(Robusta) business is very quiet. Producers won't sell because bids are too low compared with arabicas," said broker Marcus Magalhaes of Vitoria-based Maros Cafe, noting local roaster bids for Rio quality coffee at up to 185 reais per bag and only 125 reais for robustas.
Available supplies are tighter than roaster estimates because a lot of coffee stocks are held for debt payments and cannot be released onto the market, he added.
Summer showers are keeping Brazil's main coffee belt well watered. Private forecaster Somar said on Tuesday that rain would continue to cover coffee farms from Parana to south Minas for the next 10 days.
"The beneficial rains are maybe affecting sentiment," said a broker, adding that prices were likely to ease.
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