Price Volatility Sparks Mixed Brazil Coffee Trade This Week
March 05 2009 - 1:39PM
Dow Jones News
Brazil's coffee trade has been mixed this week with some sellers
tempted to sell on upward price swings while others held out for
better prices, industry sources said Thursday.
May coffee is down 20 points at $1.0850 a pound Thursday, while
one dollar is at 2.38 Brazilian reals.
"It's slow so far today, with key factors the prices in New York
and currency less favorable than Wednesday," said Tiago Ferreira, a
broker at Futura Commodities in Sao Paulo.
The trader said that business was brisk on Wednesday when the
rise in New York encouraged producers to sell their beans.
The nearby March contract on Wednesday settled 300 points
higher, at $1.0710, which helped to craw back some of the losses
after a fall of around 600 points on Monday.
Ferreira said that good quality arabica Swedish coffee was being
traded in the local market for BRR260-BRR265 per 60-kilogram bag on
Wednesday.
Major international traders such as Sara Lee Corp. (SLE) were
active in the market to meet export obligations, according to
traders and brokers.
Major multinationals have been showing a lot of interest in
buying Brazilian arabica coffee for the second half of 2009, said a
broker at Interagricola in Santos.
He said that Brazilian coffee is seen as competitively priced
compared to coffees from markets such as Central America.
A broker at a Sao Paulo-based brokerage said that despite some
trade on Wednesday, producers remain reluctant to sell.
"On Wednesday some small volumes of coffee were sold, but
overall trade is slow after a fall [in coffee prices on New York]
earlier in the week," he said.
Brazilian coffee producers are looking for prices of around
BRR300 per bag for good arabica coffee, he said.
John Wolthers, a trader at coffee exporter Comexim in Santos,
said that slow business this week reflects external economic
conditions rather than good Brazilian coffee fundamentals.
He said that a good Swedish arabica coffee was being traded this
week for around 24 points under the July and September arabica
coffee contracts in New York. The trades were for shipment July to
September. Little business is being done at this price, he
said.
Brazil is the world's No. 1 producer of coffee.
-By Tony Danby, Dow Jones Newswires; 55-11-2847-4523;
Anthony.Danby@dowjones.com