The price of coffee on the increase

The price of coffee, including that of robusta have made great progress this week, boosted by the recovery of the euro against the dollar.

A situation that might not last. The weakening of the greenback against the euro has once again allowed to make purchases of raw materials denominated in dollars, more attractive to investors provided with other currencies.

Also note the ongoing concerns about the crops in Colombia, threatened by heavy rains, have for their boost the price of arabica. But a turnaround could occur rapidly, while the experts expect that Brazil (the first producer in the world) saves a coffee crop to a record level during the year 2012.

The first forecast for Conab (Brazilian Ministry of Agriculture), published Wednesday, so expect a range between 49 and 52.2 million bags (60 kg) with three quarters of arabica. The previous record, dating from the 2002-2003 campaign, was 48.48 million bags. If necessary, production will then show an increase of between 12.6 and 20.2% compared to the 2011 harvest.

Figures to be taken with caution, however, if we are to believe the experts, Conab generally underestimate the volume of coffee harvested, compared to USDA data.

According to Patrick Masson, general manager of the trading house P. Jobin, the rebound in recent days on the market for arabica in New York would not be not due to fundamentals, but result in part from the behavior of hedge funds, including the release of their sales orders.

In the end, the London Liffe, a tonne of robusta for March delivery was worth 1894 dollars early Friday afternoon against 1755 dollars last Friday.Meanwhile, on the NYBOT-ICE New York, a pound of Arabica for March delivery traded at 234.70 cents 219.30 cents against the previous Friday.