Global coffee differentials react but remain much weaker compared to the same period last year

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Coffee differentials in the global physical market are firmer, seeking to compensate for recent losses on ICE US. The ICO price reference against the second position of coffee on the NY stock exchange indicates an appreciation of differentials in the descriptions placed in the main destinations (ex dock Europe and USA). Revealing compensation in differentials for the decline in futures prices. More expensive logistics also influence this movement.

  Colombian mild coffee, which uses as a reference a weighted average of Excelso coffee from Colombia ex dock in ports in Europe and USA, is indicated by ICO at 206.10 cents at the end of February. This corresponds to a differential of +24 cents against the May/24 position on ICE US (second position on the exchange), which closed the trading session on February 28 at 181.75 cents. A slightly firmer basis than the average last January, which was around +22.56 cents. However, much lower than that practiced in the same period last year, when it was indicated at +47.55 cents. The increased price at the NY terminal associated with the arrival of a crop that promises to be greater than in recent years in Colombia justifies such weaker differentials. The reference differential for the sale of Excelso coffee at the FOB port of Buenaventura in Colombia ranges from +11 to +12 cents against the May/24 position in NY, which corresponds to a flat price between 192.75 and 193.75 cents.

The differentials between other countries in Central America and Brazil’s main destinations also show a timid reaction at the end of February. robusta coffee only follows the movement of arabica, signaling a greater correlation between the two coffees, after the recent escalation of robusta at the London terminal. The ICO price reference for robusta is between -31 and -32 cents against the second position on ICE US at the end of February.