HAMBURG, April 15, 2011 - Ethiopian arabica traded heavily in Europe's cash coffee market this week as roasters sought supplies at low price differentials following a rise again by New York futures, traders said on Friday.
"Ethiopian Djimmah Grade 5 beans were offered at 58-60 cents under New York contracts this week against 12 cents under for Brazil medium to good bean fine grades," one trader said.
New York arabica futures rose this week on fears of tighter global supplies and are again approaching the 34-year-high reached on Mar. 9.
Ethiopian beans partly have low price differentials because of fears the country's exporters would default on deals if futures markets moved upwards and resell at higher prices, traders said.
Ethiopia's prime minister announced an investigation into allegations of coffee export defaults in August 2010.
"There has not been talk of Ethiopian defaults recently but even more sales could have been made this week if the default issue had not been in some buyers' minds," another trader said.
"Some roasters were only willing to accept immediate or nearby shipment from Ethiopia which would have a lower risk of default.
"Others were not willing to accept speculative sales by Ethiopian exporters who did not yet have the coffee in their stocks."
Meanwhile, more industry interest in Brazilian new crop beans was met with restrained selling interest with origin sellers and roasters far apart in price ideas.
The rising trend in New York meant Brazilian suppliers were in no hurry to sell, traders said.
Some noted a lack of sales offers of higher quality beans from Brazil.
"The lack of Brazilian sales offers for some fine cup were traded out of Hamburg and elsewhere in Europe at differentials of 2 cents over New York against prices as low as 13 cents under in the previous week," one trader said.
Robusta trade remained difficult, with a poor crop meaning Indonesian EK-1 was quoted at differentials over London futures for the first time since mid-2010.
"Some robusta demand from roasters could not be met this week," a trader said. "There were hardly any sales offers from Indonesia or Vietnam to be had, alternatives such as Brazilian Conillon robusta are difficult to find."
There was also market talk that a major Europe-based global commodity house had been buying Vietnamese robusta heavy recently.
Colombian arabica differentials rose by about two cents on the week to 25 cents over nearby New York contracts as concern continued about rain-damage to the country's upcoming mitaca (secondary) crop.
"No one knows what is the outlook for the mitaca crop," a trader said. "There is great concern rain will damage the harvest."
Source : reuters
