Brazilian Coffee Producers Slowing Sales Further Due to Holidays
Coffee growers in Brazil, the world’s largest producer, have further slowed sales because of the end-of-year holidays, according to Cazarini Trading Co.
Brazilian producers have been holding back beans this year as arabica coffee futures on ICE Futures U.S. in New York fell 35 percent, making it the worst performing commodity in Standard & Poor’s gauge of 24 raw materials. Slower sales resulted in exports falling 17 percent to 25.3 million bags of 60 kilograms (132 pounds) from January to November compared with the same period a year earlier, data from the country’s coffee exporters’ council, known as Cecafe, showed.
The “internal physical market was very quiet with cooperatives and producers not looking to sell more coffee,” Thiago Cazarini, a broker at the company in Varginha, Brazil, wrote in a report e-mailed yesterday. “Business decreased a lot with the holidays.”
Coffee futures slid this year partly because of a record crop in Brazil. The country’s output in 2012-13 will be 50.8 million bags, according to Conab, the Agriculture Ministry’s crop-forecasting agency. That compares with a previous forecast for 50.5 million bags. Production gained as trees entered the higher-yielding half of a two-year cycle.
Buyers of Brazilian arabica beans of fine-cup quality are getting a discount of 11 cents a pound to the exchange price as futures remained supported, according to Cazarini. That compares with a discount of 10 cents a pound a week earlier. Arabica futures were 0.2 percent higher this week after gaining 2.4 percent last week and sliding 7 percent in the week ended Dec. 14.
Arabica coffee for March delivery was down 0.7 percent to $1.469 a pound by 4:15 a.m. in New York.
To contact the reporter on this story: Isis Almeida in London at Ialmeida3@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.