| Date: |
05-01-2012 |
| Subject: |
Coffee Futures Edge Higher on India Export Concerns |
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Forexpros - Coffee futures edged higher on Wednesday, re-approaching the previous session's one-week high after India's leading coffee industry group slashed its forecast for coffee exports, adding to fears over global supplies.
On the ICE Futures Exchange, Arabica coffee for March delivery traded at USD2.2590a pound during European afternoon trade, edging 0.2% higher.
It earlier rose by as much as 0.45% to trade at a daily high of USD2.2647 a pound. Prices rose to USD2.2797 a pound on Tuesday, the highest since December 28.
The Coffee Exporters Association of India said earlier that the country's coffee bean exports were forecast to decline by as much as 15% in the 2011-12 marketing year after hitting a record high 346,850 metric tons in the previous marketing season.
The downgrade reflected a decline in Indian coffee output. The group expected India's coffee production to total 320,000 tons this crop year compared with a government estimate of 322,250 tons.
Ramesh Rajah, president of the Coffee Exporters Association of India, said, 'The new coffee crop is just trickling in and will pick up pace by mid-January or February.'
He added that unseasonal rains in December delayed new crop arrivals. India is Asia's third largest coffee grower.
Coffee prices have gained nearly 8% since dropping to a one-year low of USD2.1237 a pound on December 19, as fears over coffee production in Colombia has helped support prices in recent weeks. Colombia is the world's second largest producer of Arabica coffee beans.
Looking ahead to 2012, many market analysts expect coffee prices to remain supported through the first six months of the year, before coming under pressure in the second half of 2012, as crop conditions in Brazil, Colombia and Vietnam improve.
Agribusiness financial service provider Rabobank forecast prices to average USD2.20 a pound in the first quarter before dropping to USD1.70 in the fourth quarter.
Meanwhile, Wall Street investment bank Goldman Sachs expected prices to peak at USD2.35 a pound in the first quarter before falling to USD1.75 in the fourth quarter.
Elsewhere, on the ICE Futures Exchange, cotton futures for March delivery advanced 0.45% to trade at USD 0.9624 a pound, while sugar futures for March delivery eased down 0.1% to trade at USD0.2444 a pound.
Source : moneycontrol.com
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