Vietnam Feb coffee exports jump 17pct, offers market relief

    * Oct 10-Feb 11 coffee loading up 5 pct y/y 

   * Jan loading revised up to 145,300 tonnes 

   * Around 4 mln bags are left for sales 

Vietnam's February coffee exports  rose around 16.9 percent from the same month in 2010 to 90,000 tonnes, or 1.5 million bags, in line with market expectations, and could offer some relief to tight markets. 

   The country's coffee shipments last month were revised up to 145,300 tonnes, or 2.42 million bags, an increase of 3 percent from January 2010, the General Statistics Office said on Friday.  It had previously estimated January shipments to be 140,000 tonnes. 

   Coffee exports between October 2010 and February, the first five months of the 2010/2011 season, were estimated to reach 8.75 million bags, up 5 percent from 8.33 million 60-kg bags shipped a year ago, the office said. 

   Higher exports from Vietnam could help relieve concerns over robusta supply after Vietnam's rival producer Indonesia said its 2011 crop could drop 30 percent from an estimated 600,000 tonnes last year as rains damage cherries. [ID:nL3E7DO0J9] 

   Traders had forecast coffee exports this month at between 80,000 and 90,000 tonnes. [ID:nHAN535950] 

   The coffee crop year in Vietnam, the world's second-largest producer after Brazil and ranks the largest in robusta production, lasts between October and September. 

   The government estimated the coffee export revenues in January and February soared 47 percent from a year ago to $462.8 million, suggesting an average price of $1,967 a tonne, from $1,414 in the first two months of 2010. 

   Coffee is the country's second-largest agro-product export item in terms of value, after rice. 

   Roasters and funds have switched to buying robusta in recent months as washed arabica beans remain in short supply. 

   Liffe May robusta coffee <LRCc2> ended down $39 at $2,329 a tonne on Thursday, after rising to the highest levels in nearly three years earlier this week. [ID:nLDE71N2DW] 

        FARMERS HOLDING BACK SALES  

   A trader in Daklak, Vietnam's key coffee growing province, said this week exporters and foreign traders were keeping 400,000 tonnes, or 6.67 million bags, in warehouses for loading. 

   It was not clear how much of the exporters' current stock could be used for sales, apart from the beans already committed for loading. 

   But excluding foreign buyers' and exporters' stocks, Vietnam may still have nearly 4 million bags for sales, based on a median output forecast of 18.3 million tonnes in a Reuters poll on Jan. 27.

   Robusta prices in Vietnam hovered near record highs earlier this week, with farmers continuing to hold on to remaining thin stocks on hopes of further gains, traders said.

Adapted from  https://portal.hpd.global.reuters.com/site/applist.aspx

Bitter taste for chocolate fans as cocoa price soars

Chocolate lovers face the prospect of having to tighten their belts after the price of cocoa soared to a 12-month high yesterday.

Cocoa futures for the March delivery market reached US$3,311 (Dh11,059) per tonne, their highest level since last January, as an export ban on cocoa in Ivory Coast rattled world markets.

The rise in the price of cocoa beans follows a year that saw rapid rises in food prices worldwide.

The UN Food and Agriculture Organisation's index of food prices rose 19.1 per cent last month compared with December 2009. The index averages staple products including meat, dairy products, cereals and sugar, but excludes chocolate.

Chocolate makers in the region said the increase in price would hurt their income in the fast-growing confectionary market.

"Of course we are not happy about the increase, unfortunately there is not much that can be done," said Tina Memic, the retail manager at Bateel International, a Saudi-based maker of gourmet chocolates and dates. "We had to accept the price increase, as we are not willing to compromise the quality of chocolates we offer."

UAE residents are expected to consume 9,069.5 tonnes of chocolate sweets this year, an increase of 5.5 per cent on last year, according to Euromonitor, the market research company. Sales of chocolate confectionary rose 12 per cent last year to an estimated Dh817 million.

The price rise comes as Ivory Coast imposed an export ban on cocoa beans in the latest gambit to unseat Laurent Gbagbo, who has refused to leave the presidency in the face of pressure from the international community.

On Sunday, the government of the president-elect Alassane Ouattara sent a letter to leading cocoa exporters asking them to stop overseas shipments for one month.

The country accounts for about 40 per cent of global cocoa exports, and export revenues from the trade go into the National Coffee and Cocoa Management Committee, which Mr Gbagbo controls.

"Last week we had a meeting with the main cocoa exporters in Ivory Coast and they have agreed to suspend exports for a month," Malick Tohe, an adviser to Mr Ouattara's government, told Bloomberg.

Rob Simmons, the head of coffee and cocoa research at LMC International, the agriculture consultancy, said the export ban would have a huge effect on the world cocoa trade. "You're fairly limited in where you can get sources from," he said.

However, he added that despite the current rise in cocoa prices, the bean had proved remarkably more stable than other commodities during the past year, largely due to a small surplus of production worldwide.

Cocoa "was quite badly hit by the recession and demand took a big hit", he said.

Some increase in demand had been seen, Mr Simmons said, which was "primarily western consumers coming back, but in the background we do have some demand from emerging markets which didn't really stop".

Brazil was emerging as a big market for powder chocolate, while some Asian markets and Saudi Arabia had also increased demand for cocoa beans.

source: http://www.thenational.ae/business/economy/bitter-taste-for-chocolate-fans-as-cocoa-price-soars

Indonesia coffee output to fall 30 pct in 2011 - association

JAKARTA, Feb 24 (Reuters) - Indonesian coffee bean production in 2011 will fall by 30 percent from an estimated 600,000 tonnes in 2010, as rains in key producing areas damage cherries, an industry association official forecast on Thursday.
Lower output from Indonesia, the world's second largest robusta producer, will support global robusta prices that climbed to a 2-1/2 year high this week following tight supplies and strong price gains for arabica coffee.
"Rains in southern Sumatra have caused coffee flowers and young cherries to rot and fall from trees. Production will be lower this year," Rachim Kartabrata, executive director of the Indonesian Coffee Exporter Association, told Reuters.
The London-based International Coffee Organization forecast earlier this month that the 2010/2011 crop in Indonesia, the world's third-largest producer after Brazil and Vietnam, said output would fall 16.5 percent this year to 9.5 million bags, unchanged from their previous forecast in January.[ID:nHAN187315]
Arabica prices eased on Wednesday, after trading at the highest level in at least 30 years the previous day as a shortage of high quality beans struggles to keep pace with demand. [SOF/L]
Indonesia's main harvest in southern Sumatra may not peak until May-June because of the extreme weather, said Azis Chan Satib, spokesman of the association's Lampung branch.
"The weather has been unpredictable. Cherries are not ripening properly because of extreme changes between rains and hot weather," said Satib.
Robusta coffee bean output from southern Sumatra island is expected to fall by 30 percent this year, compared to 420,000 tonnes in 2010, he said.
Robusta -- used in instant coffee -- mostly grows in Lampung, Bengkulu, and South Sumatra provinces on Sumatra island accounts for about 85 percent of Indonesia's coffee production. The rest is higher value aromatic arabica coffee.
Source: (Additional reporting by Mas Alina Arifin in Bandar Lampung; Editing by Neil Chatterjee) ((Fitri.Wulandari@thomsonreuters.com)(+62213846364)(Reuters Messaging: fitri.wulandari.reuters.com@reuters.net))

UPDATE : Mexico sees 10/11 coffee crop flat from last season

    * Mexico 10/11 harvest seen at 4.2 mln 60-kg bags

    * Harvest delay in No. 2 producing state slows exports

    * Frost may have damaged quality of some beans

     MEXICO CITY, Feb 22 (Reuters) - Mexico sees its 2010/11 coffee crop at  around 4.2 million bags, flat compared to last season's harvest, although  delays in the harvest are slowing exports and frosts may have damaged the  quality of some beans.

    "We don't think the harvest could drop significantly (compared to last year)," Rene Avila, an operations coordinator at the national coffee  association Amecafe told Reuters.

    Exports have been slowing from Mexico, a major arabica producer, raising  worried about a smaller coffee crop. Tight global arabica supplies have pushed  coffee prices <KCc2> recently to their highest levels in more than three  decades.

    But Avila said while the crop would not be significantly smaller than last  year, it is coming in slower due to unfavorable weather in Mexico's No. 2  coffee growing state of Veracruz.

    "It is very clear that in some parts of Veracruz the harvest is delayed. It  didn't rain enough and then it was cold at the beginning of the harvest which  means the cherries ripen much slower," Avila said.

    Coffee trees flower and produce cherries that are picked and processed into  coffee beans for export.

    In the first four months of the 2010/11 coffee season, which began in  October exports from Mexico dropped more than 25 percent.

    Coffee consumption is increasing in Mexico, which could also be  contributing to the recent decline in exports, but in March production could pick up, Avila said.

    In the central states of Hidalgo, San Luis Potosi and Puebla, which produce  around a quarter of Mexico's coffee, ripening cherries were hit by a cold snap that might have hurt the quality of the beans, Avila said.

    "The frosts could have affected quality, not necessarily the volume of  total production because the cherries had already been formed," he said.

    Last year the same states were hit by unusually cold weather that cut production and the trees are still recovering from those losses he said.

Source: ((mica.rosenberg@thomsonreuters.com; +52 55 5282 7153; Reuters Messaging:

mica.rosenberg.com@reuters.net))

UPDATE : Colombia sees coffee output highest since 2008

    * Colombia sees 2011 coffee output at 9-9.5 mln bags         

    * Country suffered two years of below average production

    * January production soared 76 percent vs year ago

   

     BOGOTA, Feb 24 (Reuters) - Colombia's coffee production  this year is expected to reach at least 9 million 60-kg bags,  the highest level since 2008, as better weather helps  flowering, the country's coffee federation said on Thursday.

    Colombia, the world's top producer of high-quality washed  arabica, has experienced lower-than-average output for the past  two years due to bad weather conditions and a program to  replace aging trees with younger, more productive ones. 

    The Andean country produced 8.9 million bags last year and  7.8 million in 2009. In 2008, it produced 11.1 million bags,  about its historic annual average.

    "What are we seeing? That probably we will pass production  of last year and should reach a range of around 9 million to  9.5 million. But we have to wait and see because in farming  precise figures are always an adventure," national coffee  federation director Luis Genaro Munoz told reporters.

    Benchmark May arabica coffee futures <KCc2> fell 3.70  cents, or 1.4 percent, to $2.6575 per lb, dropping for the  second straight day on long liquidation as commercial buying  appeared to have dried up. This drop follows Tuesday's surge to  the highest level in more than 30 years at $2.7840 per lb.

    "This just adds another needle to the haystack in terms of  the weakening sentiment we're starting to see here, in the  short term," said Luis Rangel, vice president for commodity  derivatives with ICAP North America in Jersey City.

    The coffee federation in the past has set production  forecasts only to whittle them down through the year to lesser  targets. Last year Colombia fell just short of its annual  target of 9 million bags, after originally forecasting output  at as much as 12 million bags.

    SEASONAL PRESSURE

    Arabica coffee futures trading on ICE Futures U.S. are also  beginning to feel seasonal pressure and long liquidation after  attracting speculative interest that lifted the market to the  highest in more than 30 years earlier this week, dealers said.

    "In the short-term the market is experiencing too much  speculative interest at the higher levels and not enough   commercial demand," Rangel said. "The risk is that speculators  continue to drive the prices higher."

    ICE arabica futures have doubled in price over the past  eight months in a rally triggered by fund buying and sustained  by concerns about global tight supplies of washed beans.

    "It helps to give them a bit of breathing room," said Bill  Raffety, senior analyst for futures brokerage Penson Futures in  New York, referring to Colombia's higher crop forecast.  

    Prolonged adverse weather conditions and flooding had  trimmed coffee production and also has hurt output in robusta  bean producers Indonesia and Vietnam.

    The federation says that, with more favorable weather,  advances in the rejuvenation program and adequate  fertilization, Colombia could reach its official production  target of 14 million 60-kg bags in around three years.   

    January production soared 76 percent to 908,000 bags from a  year ago as better weather helped Colombia recover to its  historic monthly output levels.

    But, while weather has improved, analysts have warned that  rising oil prices could affect fertilizer costs, and force  farmers to use less of the chemical.

    The federation is also trying to replace aging trees with  new ones that are more resistant to roya fungus.

    Colombia has replaced around 70,0OO hectares (173,000  acres) of trees a year since it began rejuvenation and reached  80,000 hectares (198,000 acres) in 2010. This year the  federation expects to replace 100,000 hectares (247,000 acres)  of old trees under the project.

Source”: (Additional reporting by Marcy Nicholson in New York, writing  by Patrick Markey; Editing by Walter Bagley)   ((pat.markey@reuters.com, +57-1-634-4090, Reuters messaging:

pat.markey.reuters.net@reuters.com))