The collapse in arabica futures to three-year lows sharply cut selling by producer countries in Europe's cash coffee market this week but the fall sparked roaster purchase interest especially in Brazilian and Colombian beans, traders said on Friday.
"Sales offers from origins such as Brazil were greatly reduced as futures crashed and producers faced painfully lower prices than last week," one cash trader said. "Roasters seemed to accept any differential on offer from Brazil and buy because of low outright prices, but with a lack of producer sellers a lot of purchasing was made of Brazilian stocks in Europe for spot delivery."
New York ICE arabica coffee futures tumbled to their lowest in more than three years on Wednesday, in a speculator sell-off and forecasts of a big crop in top producer Brazil. European differentials for Brazil Swedish quality arabica for June/July shipment firmed to 18 cents under New York's July contract from 20 cents under last week as sales offers dried up.
"European roasters evidently have a supply requirement," another trader said. "There was brisk purchasing of Colombian arabicas partly because Central American supplies are increasingly sold out." Differentials for Colombia Excelso for June/July shipment were unchanged on Friday at 18 cents over New York July with trade reported in a range of 15 to 19 cents over New York during the week. Central American differentials were firm both because of tight supplies following previous heavy sales and concern about the crop disease roya reducing harvests in Guatemala and other countries.