Coffee Futures Slip As Brazil Halts Imports
February 24 2017 - 11:36AM
Dow Jones News
By Julie Wernau
Coffee futures were on track to slip for a third straight
session Friday as the market reacted to news that Brazil won't
import lower-grade coffees to boost domestic supplies.
Arabica coffee for May delivery lost 1.9% to $1.4715 a pound on
the ICE Futures U.S. exchange.
Brazilian President Michel Temer on Wednesday reversed a decree
issued by the country's Ministry of Agriculture that would have
allowed Brazilian coffee processors to import robusta coffee (a
more acerbic bean typically found in instant coffee) from Vietnam.
Brazil produces its own robusta coffee, but stocks in Brazil have
declined following two years of drought in those growing regions,
boosting domestic prices.
Commerzbank said in a note that stocks have dropped to 2 million
bags, which processors say amounts to less than two months of
demand.
Following protests among coffee producers, the president
reversed the decision, which would have been a first for the
world's largest coffee-growing region. The country is on holiday
for Carnival until next Wednesday, with warehouses and exporter
offices closed and no buying interest in the market.
"The most intriguing fact of the week was the yes and no to
robusta imports," said Thiago Marques Cazarini, a coffee broker
with Cazarini Trading Co. in Brazil.
Mr. Temer has ordered another count of coffee stocks.
In other markets, raw sugar for May lost 1.5% to 19.82 cents a
pound, cocoa for May delivery was down 1.3% at $2,000 a ton, frozen
concentrated orange juice lost 2.1% to $1.469 a pound, and May
cotton rose 1.1% to 76.92 cents a pound.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
February 24, 2017 11:21 ET (16:21 GMT)
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