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Sunday, March 6, 2011

Brazil ups rates for subsidized farm machinery loan

* Small firms to pay 6.5 pct/yr; big companies, 8.7 pct
* Program seen as crucial to boost equipment sales

SAO PAULO, March 4 (Reuters) - A program of subsidized credit for new farm equipment set to expire in March was extended through year-end with higher interest rates, Brazil's state-run development bank BNDES said late on Thursday.

But despite the increase in rates, the farm equipment industry was optimistic that sales would be record in 2011. The Brazilian government is taking steps to slow credit growth and limit public expenses to try to curb inflation.

Rates for small and medium-sized companies rose to 6.5 percent a year, and to 8.7 percent for big companies, from 5.5 percent previously for all size firms, BNDES said.
However, they are still much lower than the central bank's benchmark interest rate, currently at 11.75 percent.

Known locally as PSI, the subsidized loan program was launched in 2009 to stimulate investments in the sector during the global financial crisis. It is seen as fundamental to supporting farm machinery sales.

High commodities prices and a bumper grains crop that should improve farmers' income this year will likely contribute to push sales of tractors and harvesters.

"This year we could top 2008's (record) 8.4 billion reais in sales," Jose Carlos Pedreira de Freitas, director of the farm equipment chamber at the association for the machinery industry Abimaq.

In 2010, sales totaled 7.5 billion reais, he said.

Abimaq's numbers do not include sales of big machinery. Makers of this kind of equipment had said in February they expected a year of "excellent" sales if the PSI was extended.

More than 80 percent of the sales of equipment accounted by Abimaq were made through the program in 2010, Freitas said.
source: https://portal.hpd.global.reuters.com/auth/login.aspx

US physical coffee: Colombian premium eases

* Colombian differentials ease
* Tight supplies continue to underpin prices

 The premium for Colombian coffee on thephysical market eased amid choppy activity as some sellers lowered their prices as seasonal roaster demand dipped, U.S. buyers said.

"(The differential) is all over the place. Sometimes there're no offersand then sometimes somebody gets real aggressive with offering," said one U.S. coffee importer.

Differentials on the physical market are currently priced either at a discount or a premium against ICE's benchmark March contract. 

The ICE Futures U.S. washed arabica contract for May arabica coffee futures was up 1.05 cents at $2.7580 per lb by 10:07 a.m. EST (1507  GMT), after earlier hitting a 34-year peak at $2.7920 per lb.
 
The differential for Colombian usual good quality (UGQ) coffee beans
was at an average of 41 cents over, compared with 47 cents over a week ago.
 
For Colombian European press (EP), the average premium fell to 42 cents  over, from 48 cents the previous week.
 
The premium eased after Colombian truckers halted a two-week strike on  Feb. 18 and as roaster demand eased. Colombia is the world's third-biggest  coffee exporter and the top grower of washed arabica beans.
 
Tight supplies of washed arabica beans continued to underpin the  futures market and keep the physical market tight, as Colombia went into its third straight year of significantly lower production due to adverse
weather and a rejuvenation program that has taken many trees out of  production.
 
May robustas trading on the London International Financial  Futures Exchange (Liffe) were up $15 at $2,397 per tonne by 10:07 a.m.
 
Differentials for the coffee contract in New York, ex-warehouse, were quoted as follows and reflect an average price from a range against ICE's
 
May arabica contract and the May robusta contract in London:

Differentials

Santos   4's                 - 6.0      cents under "C"
Santos  2/3 fc/ss         - 1.0      under "C"
Colombian ugq            +41.0    over "C"
Colombian ep              +42.0    over "C"
El Salvador                  +21.0   over "C"
Mexican fob Laredo    +15.0    over "C"
Mexican HG                +21.5    over "C"
Guatemala HB            +36.5     over "C"
Peru HBMC               +21.0     over "C"
Uganda Pmy Robs      +17.5     over LDN
Indonesia EK1            + 7.5      over LDN
Ecuador Ext Sup         -12.5     under "C"
Vietnamese grade  2    + 6.0    over LDN

source: https://portal.hpd.global.reuters.com/