Robusta shortage will ease in April

Robusta shortage will ease in April

LONDON (Reuter): An acute shortage of nearby gradeable coffee for the London terminal market will ease with the arrival of crops from Brazil and Indonesia in the April/May period, UK trade house E D and F Man said.

"There is an acute shortage of nearby gradeable coffee available for the LTM (London terminal market)...Relief is not in sight before the new robusta harvest arrives from Brazil and Indonesia in April/May," Man said in its report on the world coffee situation.

Shortage in nearby coffee follows drought in Indonesia and frost and drought in Brazil, which affected both countries' 1995/96 crops.

But Brazil's 1996/97 output could reach an estimated at 25.3 million (60-kg) bags with conillon production at 5.3 million bags, according to estimates from Man Brazilian associates Marcellino Martins and E Johnston.

This compares to a Brazilian crop of less than 17 million bags in 1995/96.

Man said thin prompt coffee availability is reflected by the low levels of certified coffee stocks and the premium of the front-month March contract over the benchmark May position.

"The widening of the premium on the nearby months did attract coffee towards the LTM in January, but the effect was largely negated by the heavy failure rate of graded coffee," said MAN, adding that only 22 percent of coffee put before the grading panel was of tenderable quality.