Coffee Market Braces for Venti Bags

Leslie Josephs

  For hundreds of years, coffee beans have made their way around the world in

gunny sacks.

  Now the use of these burlap bags, small enough to be hoisted by one person

and a symbol of coffee's artisanal character, is giving way to the modern

demands of global trade.

  IntercontinentalExchange Inc. (ICE), home to the world's most heavily traded

coffee contract, last week said it would allow bean shipments to its certified

warehouses to arrive in lined cargo containers, or "supersacks." These plastic

woven sacks often hold a metric ton of coffee, or enough beans to make about

125,000 shots of espresso.

  The move is expected to make it easier for big commodity traders and food

companies to buy and sell coffee on the exchange. Cargo containers of loose

beans already change hands in the physical-coffee market. But to be delivered

against the ICE futures contract, arabica coffee beans generally must have

arrived in the warehouse in bags that were marked at the beans' origin, and be

made of "sisal, henequen, jute, burlap or woven material having similar

properties," according to current rules.

  At the same time, the loosening of packaging requirements could further

suppress prices that already are weighed down by a glut of arabica beans, the

variety used by roasters such as Starbucks Corp. (SBUX) and Italy's IllyCaffe

SpA, traders and analysts say.

  The new rule "is going to increase the amount available [in stockpiles],"

said Jack Scoville, a vice president at brokerage Price Futures Group in

Chicago. That likely would pressure prices even more, Mr. Scoville added.

  Stockpiles of arabica are near 3-1/2-year highs, caused largely by

back-to-back record harvests in No. 1 grower Brazil. The glut has driven prices

of arabica to their lowest levels since April 2009. Arabica futures rose 0.2%

to $1.1525 a pound on the ICE Futures U.S. exchange Wednesday.

  Some market experts say that big incoming coffee shipments also could revive

worries about the quality of the beans in ICE-certified warehouses, which could

suppress futures prices relative to prices on the cash market. ICE tightened

standards in late 2010 in response to concerns about the age, color and taste

of coffee beans in storage amid a shortage of beans from Colombia, the world's

No. 2 arabica grower.

  Many companies, from small Brooklyn, N.Y., roasters to Starbucks, have a

policy of only using coffee beans that have traveled from the farm to roasting

machines in gunny sacks.

  Cheryl Kingan, head coffee buyer for Cafe Grumpy, a small roaster in

Brooklyn, says she doesn't receive coffee in a lined container.

  "You wouldn't know exactly what you're getting," Ms. Kingan says.

  Critics of the new rule, which comes into force in late 2015, say it is more

difficult to ensure that coffee beans originated from the country advertised if

they are shipped in bulk and then rebagged. Certain beans, like those from

Colombia, command a premium while the more plentiful, mechanically harvested

Brazilian beans are traded at a discount to the benchmark futures contract.

  "I'd rather see [the coffee] arrive in bags," says Bob Phillips, a trader at

Caturra Coffee Corp., a coffee importer based in Elmsford, N.Y. Referring to

ICE's rule change, Mr. Phillips said, "I don't think it's a wise idea because

someone will find a way to misrepresent [the coffee]. Beans don't have a stamp

on them."

  ICE says the decision will help bring it into line with a growing trend of

big, bulk deliveries of beans. Global coffee exports rose by 27% between 2002

and 2012, to 113.2 million bags, according to the International Coffee

Organization.

  Other coffee traders are defending the change.

  "It's really just reflecting what is going on in the physical [trading]

world," said a person involved in the decision-making process. "Welcome to the

'90s."

  J.M. Smucker Co. (SJM), the maker of Folgers, and Kraft Foods Group Inc.

(KRFT), which produces Maxwell House coffee, say they receive coffee shipments

in big containers.

  Even traders of some of the world's most sought-after coffee say worries

about quality are overblown. Companies that take coffee that meets the

exchange's minimum standards don't have particularly high expectations, says

Andi Trindle Mersch, a trader at Atlantic Specialty Coffee.

  "Supersacks are quite acceptable for quality as far as I know," Ms. Mersch

says, adding that only about 5% of the coffee the company buys comes in large

supersacks. Atlantic Specialty Coffee is a unit of Ecom Agroindustrial Corp.,

one of the world's biggest coffee traders.

  While the exchange is expanding the options to bring coffee to the warehouse,

ICE isn't changing how buyers can get it out. Under the new system, warehouse

employees still will sort and bag the coffee in natural-fiber bags before

handing it to the exchange's graders. The coffee still must pass the exchange's

muster before it joins the certified stockpiles.

  Still, many in the coffee market believe the really good beans always travel

in small packages.

  Costa Rica, which is famed for its coffee beans nourished by volcanic,

mineral-rich soil, exports 90% of its crop in smaller bags, said Edgar Rojas,

the deputy director of the Coffee Institute of Costa Rica, a government body

that oversees the industry.

  The bulk shipments "are cheaper" but smaller bags make "it easier to control

the quality," Mr. Rojas says.

  For the same reason, Starbucks says it only uses gunny sacks.

  "Starbucks only receives its coffee in unit-level bags," said Starbucks

spokeswoman Alisha Damodaran, referring to the industry standard bag that holds

60 kilograms, about 132 pounds. "It is an integral component to traceability

and quality assurance."

Orange-Juice Futures Ease; Arabica Coffee Near Flat

  NEW YORK--Orange-juice futures eased Wednesday morning as traders took

profits after the market gained 1.1% during the previous session.

  Futures remained range-bound between $1.25 and $1.30 a pound for a sixth

session as the market waited for fresh fundamental news.

  "We're expecting prices to stay within this range until we get some weather

news or once we get that crop production number" from the U.S. Department of

Agriculture, said Boyd Cruel, senior analyst at Vision Financial Markets in

Chicago. The USDA was scheduled to release its first orange production forecast

of the season on Friday, but the partial government shutdown is expected to

delay that report indefinitely.

  Orange juice for November delivery on the ICE Futures U.S. exchange was

recently 0.5% lower at $1.2860 a pound.

  During hurricane season, which runs from June 1 to Nov. 30, traders often

place bets that a storm could damage the groves and lower output in Florida,

the No. 1 U.S. orange-growing state. But the only weather disturbance in the

Atlantic is sitting off the coast of Africa, far from the shores of Florida.

The low-pressure area has a 30% chance of forming tropical cyclones in the next

48 hours, according to the National Oceanic and Atmospheric Administration.

  "Just a lack of news right now is why we're going to see this market trade

sideways," Mr. Cruel said.

  Arabica coffee for December delivery on ICE was recently 0.1% lower at

$1.1495 a pound.

  "Traders remain bearish overall on coffee prices due to big supplies

available and only light demand," said Jack Scoville, vice president at Price

Futures Group in Chicago.

  Global supplies of coffee beans have swelled thanks to back-to-back bumper

crops from Brazil, the source of one-third of the world's coffee, and

recovering production from neighboring Colombia.

Cotton Slides to Near-Five-Week Low on Lack of News

Alexandra Wexler

  NEW YORK - Cotton futures fell Wednesday to their lowest settlement since

Sept. 5 as a lack of fresh weather news and government data left the market to

drift lower.

  Traders had worried last week that Tropical Storm Karen would dump rains on

fields in No. 2 cotton-producing state Georgia and damage yields. But cotton

futures tumbled 3.6% Monday after rains in the Southeastern portion of the U.S.

didn't do significant damage to fiber still in the field.

  In addition, since the partial U.S. government shutdown began Oct. 1, the

U.S. Department of Agriculture has not released closely watched reports on U.S.

cotton export sales or the progress and condition of the U.S. crop. A key

monthly supply-and-demand report, which had been scheduled for release Friday,

is also expected to be delayed. Traders say the market is ripe for a squeeze in

the December contract because of the lack of government oversight.

  Open interest--or the number of outstanding positions--in the December cotton

contract has dropped by 4% this week as prices have hit near five-week lows.

Cotton for delivery in December on the ICE Futures U.S. exchange ended 0.6%

lower at 83.20 cents a pound on Wednesday.

  "It could make the (exchange) the cheapest place to buy cotton," said Chris

Kramedjian, a risk-management consultant at brokerage INTL FCStone. "Without

the government oversight, it's easier to build that position."

  Cocoa for December delivery eased from a 23-month high to settle at $2,703 a

ton, down 0.6% on the day.

  Prices have surged as rains in West Africa, a region that produces about 70%

of the world's cocoa, delayed the shipment of cocoa beans to ports, traders and

analysts said. And that rain isn't expected to reverse the effects of dry

weather in July and August, when the main crop was developing, market

participants added. As a result, the beans being harvested may be of lower

quality or fewer in quantity.

   Raw sugar for March delivery settled 0.2% lower at 18.59 cents a pound, down

from a near-seven-month high settlement on Tuesday as the market consolidated.

  Concerns about supplies in Brazil, the top producer of the sweetener, have

been buoying the market as heavy rains disrupt harvesting during the tail-end

of the sugar-cane crop.

  Arabica coffee for December delivery ticked 0.2% higher to $1.1525 a pound,

while orange juice for delivery in November closed 0.5% lower at $1.2850 a

pound in thin trade.

Café na ICE tem novo dia de lentidão e preços dentro de intervalo

  Os contratos futuros de café arábica negociados na ICE Futures US encerraram esta terça-feira com altas ligeiras, com, mais uma vez, o dezembro flutuando ao redor do nível de 115,00 centavos. Ao longo da manhã, a primeira posição chegou esboçar o rompimento dessa resistência, sem ter sucesso. No entanto, na segunda metade do pregão tal patamar conseguiu ser ultrapassado, sem, contudo, existir forças suficientes para que alguns stops de compra pudessem ser observados. Diante disso, o tom letárgico continuou a ser observado no segmento cafeeiro, com poucos negócios efetivamente sendo realizados e com os preços ficando presos em um range estreito, ao redor de um referencial psicológico.

Operadores destacaram as projeções apresentadas pela empresa Melitta em um evento realizado no Brasil. Segundo os executivos da companhia multinacional, a tendência do mercado de café é baixista e os preços tendem a se manter pressionados, próximos dos menores patamares em anos, por cerca de 15 a 20 meses. Nas mesas de comercialização alguns players comungam dessa opinião da torrefadora, com vários deles lembrando que o cenário atual é marcado por um volume alto de café disponível, fruto de safras consistentes do Brasil, do Vietnã e da recuperação da Colômbia, sendo que mesmo a quebra dos centro-americanos não será suficiente para mudar o cenário de disponibilidade ampla.

No encerramento do dia em Nova Iorque, a posição dezembro teve alta de 55 pontos, com 115,05 centavos de dólar por libra peso, com a máxima em 115,35 centavos e a mínima de 113,85 centavos, com o março registrando valorização de 55 pontos, com 118,20 centavos por libra, com a máxima em 118,40 centavos e a mínima em 117,00 centavos. Na Euronext/Liffe, em Londres, a posição novembro teve queda de 13 dólares, com 1.696 dólares por tonelada, com o janeiro tendo retração de 17 dólares, para o nível de 1.687 dólares por tonelada.

De acordo com analistas internacionais, o dia foi marcado pela pressão externa, devido ao impasse político nos Estados Unidos, que eleva a uma paralisação econômica por conta da não aprovação do orçamento. Esse quadro ainda atinge apenas lateralmente segmentos mais voláteis, como o de commodities, mas já derruba francamente outros mercados, como é o caso das bolsas de valores no país norte-americano.

Os investidores continuam preocupados com as incertezas associadas a esse impasse e alguns analistas avaliam que o cenário de baixa tendo a se acentuar caso uma solução não seja encontrada rapidamente.

"Enquanto continuamos a observar essa paralisação da economia norte-americana, o café se mostra pouco animador em novidades. O que temos é um ritmo lento de negócios e com os compradores se mostrando reticentes, apenas se acomodando em intervalos básicos, como é o nível de 115,00 centavos por libra, no atual momento. Evidentemente, com a pressão sobre mercados externos, como as bolsas, alguns respingos vão incidir sobre as commodities", disse um trader.

Nesta terça, o dólar teve uma ligeira alta em relação a várias moedas internacionais, ao passo que ficou estável em relação ao real brasileiro. No segmento de softs, o café teve alta e foi acompanhado pelo cacau, açúcar e suco de laranja.

O leilão de contratos de opção de venda de café, encerrado nesta terça-feira, negociou 100% da oferta 4.058 contratos, os quais não foram comercializados nos três leilões anteriores, realizados pela Companhia Nacional de Abastecimento. O prêmio a ser pago pelos produtores ficou em R$ 1,8400 por saca, o que representa um ágio de 7,3%, em comparação com o valor de abertura, que era de R$ 1,7150 por saca. O prêmio pago pelo cafeicultor garante o direito de vender o produto ao governo no vencimento dos contratos, em março de 2014, caso o preço de mercado esteja abaixo do valor de referência, que foi estabelecido em R$ 343 a saca. Atualmente, a saca de café, tipo exportação, similar ao exigido pelo governo nas opções, está cotada em cerca de R$ 260/R$ 270.

Os estoques certificados de café na bolsa de Nova Iorque tiveram queda de 750 sacas, indo para 2.760.292 sacas. O volume negociado no dia na ICE Futures US foi estimado em 9.640 lotes, com as opções tendo 2.224 calls e 950 puts — floor mais eletrônico. Tecnicamente, o dezembro na ICE Futures US tem resistência em 115,35, 115,50, 116,00, 116,20, 116,50, 117,00, 117,45-117,50, 118,00, 118,50, 119,00, 119,20, 119,50, 119,90-120,00, 120,50, 120,75, 121,00-121,05, 121,10, 121,50, 122,00, 122,50, 122,20 e 122,50 centavos de dólar, com o suporte em 113,85, 113,50, 113,00, 112,50, 112,00, 111,50, 111,00, 110,50, 110,10-110,00, 109,50, 109,00, 108,50, 108,00, 107,50 e 107,00 centavos.

Londres tem dia de queda e fica abaixo do nível de US$ 1.700

  Os contratos futuros de café robusta negociados na Euronext/Liffe encerraram esta terça-feira com quedas, com o novembro voltando a se posicionar abaixo do nível psicológico de 1.700 dólares. A sessão foi calma e sem maiores atrativos, com o volume comercializado, ao final das negociações, ficando dentro da média recente da bolsa londrina.

De acordo com analistas internacionais, as oscilações observadas ao longo do dia estiveram atreladas, basicamente, a ações técnicas. Apesar do fator "Vietnã" continuar sendo o principal item da pauta dos players, o que se observa é que ainda não há efetivamente um posicionamento mais claro dos terminais sobre a safra do país. Enquanto a expectativa dos operadores é de que os vietnamita colocarão um volume considerável de café no mercado, outros participantes temem que as fortes chuvas que atingem o país possam afetar a secagem do grão e também a qualidade final do produto.

"Alguns acreditam que a safra do Vietnã está precificada, mas isso é algo muito precipitado. Temos de ter ideia do tamanho da produção do país e também avaliarmos a questão da qualidade. A tendência é que essa nova produção pressione ainda mais os preços, uma vez que, ao contrário do que se pensava há alguns meses, as lavouras do país conseguiram, sim, ter um volume considerável de produção", disse um trader.

O novembro teve uma movimentação ao longo do dia de 5,66 mil contratos, contra 2,82 mil do janeiro. O spread entre as posições novembro e janeiro ficou em 9 dólares. No encerramento do dia, o novembro teve queda de 13 dólares, com 1.696 dólares por tonelada, com o janeiro tendo retração de 17 dólares, para o nível de 1.687 dólares por tonelada.