Brazilian beans more actively traded in Europe's cash coffee market

Brazilian beans were more actively traded in Europe's cash coffee market this week but Colombian beans remained in very low supply, traders said on Friday. Dealers reported trade in current crop Brazilian beans as differentials weakened after more favourable weather in the country improved the outlook for the new harvest.
Brazil MTGB Fine beans were quoted at around 20 cents under New York's May contract against 19 cents under last week. "The slightly softer differentials looked more attractive this week and encouraged current crop Brazil trade," one dealer said. "Some sales of Brazil's new crop for second half 2009 shipment were also made but business volumes were held back by an unwillingness among Brazilian exporters to sell."
New York coffee futures drifted down from their recent peak during the week, encouraging some industry purchase interest. Sales offers from Colombia remained at very low levels, continuing a problem seen throughout January. Traders say Colombia has been suffering from a series of problems including unfavourable weather and logistics difficulties which have seriously reduced volumes offered for sale on international markets.
Colombian Excelso grades were offered at 26 cents above New York's May contract, unchanged on the week but up from 20 cents just before Christmas and only 9 cents above New York in October. "The core problem remains that not enough Colombian coffee is being offered to meet industry needs," a second trader said. "But there were signs this week that the rise in Colombian differentials may be coming to an end."
"Differentials have been at around the same very high level for two weeks but this week some sales offers were refused instead of being snapped up immediately." "However, Colombian sales offers for second half 2009 delivery were very rare indeed." Central American differentials remained firm with high Colombian differentials providing support.
Costa Rica Hard Bean was quoted at 20 cents over New York, up from 18 cents over last week. This reduced industry buying of Centrals to short-covering for nearby shipment, traders said. Traders said the German industry made large purchases of current crop Ethiopian sundried coffee, with export business becoming more active after a slow start to the year at slightly weaker differentials.
The Lunar New Year holiday in Asia kept key robusta exporter Vietnam out of the market, reducing physical robusta trade to a trickle. Business in alternative robusta origin Indonesia was also reduced as Indonesian roasters continued to be aggressive buyers of available supplies for export.
Differentials were flat with Indonesian EK-1 quoted at an unchanged $80 under nearby London contracts. The uncertain weather outlook in Indonesia meant exporters were unwilling to quote new crop prices this week despite industry interest, traders said.