Offers for new crop Brazilian arabica coffee were limited this week as farmers delayed sales in hopes for higher prices, dealers in Europe's cash coffee market said on Friday. "The producers are holding the coffee because they think the market will rise," a European dealer said.
The lack of sales helped keep differentials for Brazil MTGB for nearby shipment firm at 4 cents under New York, from 12 cents under earlier this month. Top producer Brazil is in the midst of harvesting what is expected to be a record off-year crop, but dealers said the volume of sales is lower than it would usually be at this point in the harvest, because farmers are well financed and able to delay selling.
"Brazil are not aggressive sellers at all," the dealer said. Brazil's crop is expected to amount to 43.5 million 60-kg bags, according to the official estimate, though most exporters see output of 45 million bags or more.
ROBUSTA TIGHT Low stocks of robusta coffee at origin kept differentials of major producers Indonesia and Vietnam at historically high levels. Earlier this week dealers said Indonesia's coffee beans were offered at record premiums of $400 a tonne to London futures, highlighting worsening supply scarcity in the world's second-largest robusta producer after Vietnam.
Indonesia and Vietnam are between coffee crops. Vietnam's harvest is due to start in October-November. "If you want to buy robusta, you can possibly buy it more cheaply in Europe than at origin," a European trader said. European certified stocks have risen sharply in recent months as a premium on the NYSE Liffe May robusta coffee futures contract over July triggered shipments of coffee from key producer Vietnam.
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