Colombian beans once again traded at new price highs in Europes cash coffee market this week with exports from the country way below levels needed to meet roaster demand, physical traders said on Friday. Colombian Excelso grades were traded at differentials of 42 over New Yorks May contract this week, up from 37 cents over last week and up 16 cents since the beginning of February.
"Colombia is becoming a crisis if roasters do not have the supplies needed for their blends," one physical trader said. "Volumes being offered for sale internationally are way under roaster requirements." Traders say heavy rain and other problems have seriously reduced volumes of Colombian coffees offered for export since December 2008.
Colombian differentials in November 2008 were only 7.5 cents over nearby New York contracts. "Colombian exporters this week again said they had not been able to find the supplies they wanted in the Colombian internal market," a second trader said. "What volumes offered for sale internationally were subjected to heated bidding in a sellers market."
Traders said more favourable weather for plantings in Colombia in the past week could start to bring relief by triggering farmer selling. Colombian price strength also supported Central American prices. Differentials offered by Guatemala, Costa Rica and Honduras remained at the high levels seen since late February although they were little changed on the week, traders said.
"International demand for Costa Rica was high this week because of fallout from the Colombian shortage," a third trader said. "It was a miserable week for roasters if they had to get supplies in their books." Costa Rica Hard Bean rose to 28 cents over New York May from 26 cents over last week.
Guatemala Strictly Hard Bean grades were quoted at 27 cents over New York May, unchanged on the week but retaining their highest level for a year and up five cents since early February. The dramatic spike in New York and London prices on Thursday stunned buyers and some pulled out of the market until the futures picture became clearer on Friday.
"Origin sellers took advantage of the spike and there were good levels of price fixings from Vietnam, Central America and East Africa," the second trader said. "This was a technical, fund-based movement and it reminded people how susceptible soft commodities are to fund buying and selling."