Robusta Coffee Down Slightly in Europe - Market Talk

Liffe's March contract is down 1,4% at $1,672 a tonne. Prices formed a

recent peak mid-December after robust gains, but have slipped since, giving up the $1,700 mark.

"Short term indicators suggest potential for further declines to focus around the $1,624

level...while modest support holds near $1,600 area," says Sucden Financial senior research analyst

Myrto Sokou. A break higher would potentially target the $1,730 market, she adds. However, with

better physical movement of this commodity expected out of the gate in 2014, Sterling Smith at Citi

Futures and OTC Clearing expects the large Vietnamese harvest to pressure prices by keeping the

market well supplied.

Vietnam Coffee Growers Hold Out for Better Prices

Vu Trong Khanh

     HANOI - Coffee growers in Vietnam are holding off selling their beans as the end of harvest

approaches, waiting for better prices.

     "Exporters are facing difficulty buying coffee beans from farmers as prices are too low, around

34,500 dong ($1.64) per kilogram," Nguyen Duc Tho, chief executive officer of Duc Nguyen Coffee Co.,

based in Dak Lak province, told The Wall Street Journal. He said farmers are waiting for at least

37,000 dong or 38,000 dong.

     December exports from Vietnam--the world's largest grower of robusta coffee beans, used

primarily in instant-coffee blends--were down sharply, to 100,000 metric tons from 163,000 tons a

year earlier, according to Nguyen Viet Vinh, general secretary of Vicofa, the Vietnam Coffee-Cocoa

Association.

    "Only a small number of farmers are selling moderately to have money for their daily expenses

and for their preparation for the coming Lunar New Year holidays," Mr. Vinh said. At the current

price farmers won't make any profit, he explained, given the rise in input costs in recent years.

     Mr. Vinh said almost all of the coffee for the 2013-14 crop year, which began Oct. 1, has been

harvested; Vicofa's website Monday said harvest is 80% done. He didn't provide an output figure, but

said it is estimated to be down 15% from last year's.

     The association is waiting for a final approval from the government to extend low-interest

loans to coffee exporters to stockpile up to 300,000 metric tons of coffee to support prices.

     "We know that the proposal is now on the table of a deputy prime minister, but there are still

some issues to be considered before it is officially approved," Mr. Vinh said, without elaborating.

     Vicofa Chairman Luong Van Tu said in November that purchases for the stockpiling plan would

take place in the first half of 2014.

     Mr. Tu said exports for the current crop year are expected to total about 1.41 million metric

tons, nearly matching last year's. Coffee exports in the 2012-13 crop year, which ended Sept. 30,

totaled 1.42 million metric tons, according to the Vietnam General Customs Department--down 9% from

the previous year's 1.56 million tons.

Arabica coffee prices - will they fall below $1 in 2014?

Arabica coffee prices had a dismal 2013, falling by some 20%, pressed by a strong crop in Brazil, the top producing country, and growing momentum in the output recovery in second ranked Colombia from a downturn prompted by a mass replanting programme.

The world appears to have managed a production surplus despite the rust outbreak in Central America.

New York arabica coffee futures at one point threatened to fall below 100 cents a pound for the first time since 2006, before their narrowing premium over robusta helped stoke some late-year recovery.

Will the revival continue in 2014? Or are producers set for more of the low prices which have prompted civil unrest, and concerns about rural economies in producing countries?

Commerzbank

"In 2013, Brazil posted a record high for production in such a low-yield year and in all probability will post a record-high for production in a high-yield year in 2014.

"In terms of aggregate coffee volume this could translate to an increase of 10m bags to 57m bags, and some estimates even go as high as 60m bags or more. That is anything but a signal of scarcity.

"As a minimum, the current low price phase will lead to lower yields in the medium term due to scrimping on fertilizer and crop protection. Thus, for the longer run, the International Coffee Organization views the assumption of a higher coffee supply as questionable.

"But at present, it seems there could also be surpluses in 2013-14 and 2014-15.

"The more diminished outlook for the years thereafter should, however, allow prices to rise slowly, so that after an intermittent low during the Brazilian harvest in 2014 we expect the price of coffee to recover."

Macquarie

"Despite the recent strength in arabica, which is more to do with spillover strength from robusta, we expect prices to correct into the first half of 2014.

"Brazil's outlook for the 2014 'on' crop looks promising, while Colombia's strong rebound in supplies will help offset losses in Central America. As global stocks remain more than comfortable, prices will be rangebound.

"From the second half of the year, incremental roaster demand may skew towards arabica, and prices that are below production costs may deter supply growth."

Rabobank

"Arabica coffee prices are expected to ease throughout 2013 on a third year of surplus production and producer currency weakness.

"We expect a further 14% reduction in arabica prices during 2014, to 95 cents a pound in the fourth quarter, as production is forecast to exceed consumption by 3.2m bags in the 2013-14 season.

"We expect the weak arabica price outlook and subsequently narrow arabica-robusta spread to drive higher arabica blends in 2014, and consumption is forecast to rise by 1.6% year on year – the largest increase since 2007-08.

"However, currency weakness for producers is likely to limit the upside for coffee price  throughout 2014."

Societe Generale

"The conclusion of the 2012-13 Colombian coffee harvest proved to be quite strong and trending well towards levels last seen in the 2007-08 crop year.

"Meanwhile, early weather in Brazil has laid the groundwork for a strong new crop. With this next crop year being an 'on year' for Brazilian coffee production, this increase will only add to the global surplus.

"We maintain that tightening will not be seen until at least the 2015-16 marketing year, barring any significant drop in Central American coffee production due to leaf rust disease.

"A key risk to our forecasts is that the currently low coffee prices experienced by farmers could lead them away from investing in their crops, driving down production, and increasing coffee prices."

Preços do café tem queda em três anos consecutivos e analistas acreditam em novas mínimas em 2014

Os preços do café despencaram 20% em 2013 , produzindo a pior queda de dois anos em uma década e destacando a pressão exercida pelo excesso de oferta nos mercados de commodities .

A produção global de café está aumentando porque mais hectares foram dedicados ao cultivo generalizado de grãos e plantas mais produtivas e resistentes foram desenvolvidas.

Agricultores da Colômbia e Etiópia tomaram medidas para aumentar a produção a mais de três anos atrás, quando os preços estavam subindo e agora , o mercado dos contratos futuros de arábica , uma variedade que é usado principalmente em cafés de alta qualidade e que representa a maior parte da produção global, está sofrendo as conseqüências ..

Na segunda-feira , os preços do café arábica caíram 1,4% para US$ 1,1470 por libra na bolsa ICE Futures . Salvo alguma aumento sem precedentes na terça-feira , o último dia de negociação do ano , o café vai terminar 2013 em território negativo , como aconteceu em 2011 e 2012.

Os preços do café tem queda em três anos consecutivos desde o início dos anos 90. Desde 2011 , os preços do café caíram 49%. É o maior declínio de dois anos desde 2000-2001 , quando os preços caíram 63%.

Os investidores afastaram-se das apostas otimistas e muitos estão apostando que os preços vão continuar a cair.

Agricultores na Colômbia , o segundo maior produtor de café arábica do mundo, depois do Brasil, protestaram para exigir mais apoio do governo a uma diminuição na renda. Enquanto isso , os preços de varejo do café torrado mantiveram-se relativamente estável, o que beneficiou os torrefadores e empresas de alimentos que podem tirar vantagem dos baixos custos de grãos.

A queda acentuada dos preços é o exemplo mais proeminente de um excesso de oferta que tem afetado muitos mercados de commodities , colocando pressão sobre os preços e os investidores desanimados .

Os mineiros estão a aumentar a produção de cobre , os agricultores norte-americanos vão ter alcançado uma safra de milho recorde e produção de petróleo dos EUA subiram. Índice Dow Jones-UBS Commodities UBSN.VX -0,88% caiu 8,2% até agora este ano .

Na temporada que terminou 30 de setembro, a produção global de café aumentou 7,8% para 144,6 milhões de sacas , segundo a Organização Internacional do Café . Um saco de café pesa cerca de 60 quilos, o padrão da indústria .

Analistas de mercado acreditam que a produção vai voltar a subir em 2014. "Eu não acho que nós já atingimos o fundo dos preços", disse Sterling Smith , especialista em futuros do Citigroup .Há uma forte possibilidade de que veremos um recorde de produção em uma nova safra de café. "

O Departamento de Agricultura dos EUA prevê que a oferta de café globais vão subir 7,5% para 36,3 milhões de sacas até o final desta temporada, um sinal de que a demanda vai exceder a oferta por mais algum tempo.

O Brasil, que fornece um terço de café do mundo está a caminho de ter um ano de grande colheita . A produtividade das plantas de café no país alterna entre anos de safra alta e baixa. Excesso de oferta tem sua origem em um aumento de preço de mais de dois anos atrás, quando os agricultores no cinturão do café tropical investiram grandes somas de dinheiro no setor , enquanto os preços atingiram um máximo de 14 anos para mais de US $ 3 libra-peso em maio de 2011.

Há três anos, José Muñoz Manrique Eliuth e milhares de outro cafeicultores colombiano trocaram as plantas infectadas com um fungo por árvores de variedade mais produtiva. "Agora nos damos conta de que foi um erro grave ", diz Muñoz, um cafeicultor de El Tambo , no sudoeste do país.