Coffee trees in Brazil will probably flower for a second time next week as rain continues to fall over growing regions, including blossoming before next year's crop, local brokers say; flowers will become cherries that contain the beans to be harvested
September 20, 2013
– Coffee trees in Brazil, the world’s largest producer, will probably flower for a second time next week as rain continues to fall over growing regions, inducing blossoming before next year’s crop, local brokers said.
A good amount of rain fell over the coffee belt this week, helping keep flowers that blossomed last weekend on the trees, Rio de Janeiro-based broker Flavour Coffee said in a report e- mailed yesterday. Flowers will become the cherries that contain the beans to be harvested. While mostly dry weather will return today, rain is seen for the eastern part of Southeast
Brazil next week, Sao Paulo-based forecaster Somar Meteorologia said in a report yesterday.
There were “lots of rains throughout the coffee belt, washing away the drought speculation and bringing flowering for most of the area,” Thiago Cazarini, a broker at Cazarini Trading Co. in Varginga, Minas Gerais, Brazil’s biggest arabica- producing state, said in a separate report yesterday. “Stronger rains continue and if it stops raining soon and the sun comes, we might see another flowering next week.”
Arabica coffee futures, down 20 percent on ICE Futures U.S. in New York this year, are heading for a third annual decline, the longest slump since 1993. Supply is outpacing demand and Brazil is now gathering a record crop for a year in which trees enter the lower-yielding half of a two-year cycle, the government estimates.
The amount of coffee sold in Brazil this week was smaller than in the previous seven-day period as a stronger Brazilian real means lower margins for exporters, Flavour Coffee said.
The real, down 6.8 percent this year, rallied 3.2 percent on Sept. 18 after the Federal Reserved left its fiscal stimulus intact.
“Producers and cooperatives tried to keep the prices, but with the stronger Brazilian currency and lower New York-ICE, the exporters couldn’t afford to pay,” Flavour Coffee said.
Brazilian arabica beans of good-cup quality were at a discount of 18 cents to 21 cents a pound to the price on ICE, according to Flavour Coffee data. That is little changed from a discount of 19 cents to 21 cents a pound last week. Fine-cup beans were unchanged at a discount of 13 cents a pound to the exchange prices. Fine-cup beans are usually more expensive because of their taste profile.
Conillons, as Brazilian robusta beans are known, were offered this week at a premium of 8 cents a pound ($176 a metric ton) to the price on NYSE Liffe in London, according to Flavour Coffee. That’s up from a premium of 5 cents a pound last week. The premium asked by growers “did not attract any buying interest,” the broker said, adding that some grades of arabica were the same price as robusta or even cheaper.
Robusta coffee is grown mainly in Asia and parts of Africa and used for instant drinks and espresso. Arabica coffee is grown mainly in Latin America and favored for specialty drinks such as those made by Starbucks Corp.
Robusta coffee for delivery in November was 0.7 percent lower at $1,675 a ton by 10:30 a.m. in London. Arabica coffee for December delivery retreated 0.5 percent to $1.152 a pound in New York.
--Editors: Sharon Lindores, John Deane
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