Coffee prices in Asia were mostly higher in the week to Friday due to strong commercial buying to quench soaring global demand amid expectations of dwindling export availability from major coffee producers Vietnam and India, and a lower 2011-12 crop from Indonesia.
Arabica coffee futures for July delivery on the Intercontinental Exchange settled at $2.6560 a pound Thursday, up 0.7% from a week earlier but well off the recent multiyear peak of $3.0890/pound hit on May 2.
"We believe that Arabica prices at around $3.00/pound are exaggerated and not sustainable...Prices should retreat slightly initially but not slip below the 200 U.S. cents mark through to next year, as the situation will remain tight well until the next good high-yield crop year in Brazil, when stocks can be built up," Commerzbank said in a research note Wednesday.
Coffee stocks in exporting countries fell to only 13 million bags at the beginning of 2010-11, the lowest level in more than 50 years, which will likely support prices, it said.
The July robusta futures contract on the London International Financial Futures Exchange rose 2% over the week to close Thursday at $2,600 a metric ton, as robusta supplies remain limited.
Top robusta supplier Vietnam exported only 1.83 million bags of coffee in May, down 12.7% from the previous month, the General Statistics Office said Wednesday.
Domestic prices have climbed to around VND51,200 a kilogram, up from VND48,000-VND49,000/kg a week earlier as there's very little coffee left, a trader in Ho Chi Minh City said.
Exports are likely to dip in the next few months, adding to global supply tightness, trading executives said.
"Whatever's available is mostly with wealthier farmers and is estimated to be less than 10% of the current harvest," said a trader in Daklak, a major coffee-growing province.
In Indonesia, another key robusta producer, output may fall to 7.9 million 60-kilogram bags in the crop year that began in April, down 25% from two seasons ago, the U.S. Department of Agriculture's Jakarta attache said in a report Tuesday.
The slump in output is due to the residual impact of a La Nina weather system, which is estimated to have cut production in the 2010-11 crop year to 9.3 million bags from 10.4 million bags the previous year, the attache said.
Robusta beans, which were offered at a premium of $80/ton to London's July contract last week, are now being offered at a premium of slightly over $80/ton in Indonesia, a trader in Singapore said.
In India, Asia's third-largest producer, high quality arabica plantation bean prices were steady around $6,300/ton, a trading executive in Bangalore said.
However, robusta prices have risen, tracking international futures in London, he said, with robusta cherry AB beans quoted at $2,725/ton, up from $2,600/ton a week earlier.
Less than 10% of this year's coffee may be available for exports since most of it was shipped in the first seven months of the crop year that began Oct. 1, he said.
Dow jones
No comments:
Post a Comment