Bloomberg.com Friday, December 10, 2010 The discount on Brazilian coffee will be more than twice that on the cheapest grades currently deliverable against ICE Futures U.S.’s arabica contract when it gets included from 2013, according to the bourse. Brazilian coffee will be deliverable at a discount of 9 cents a pound, compared with a 4-cent discount for supply from the Dominican Republic and Ecuador, the exchange said in a statement yesterday. Rwandan, Burundian, Venezuelan and Indian coffee are also discounted, while Colombian beans get a 2-cent premium. A further 12 origins are at par. The exchange had considered adding Brazilian coffee to the contract three times since 1999 and the change was opposed by a growers group in Colombia. Adding the Brazilian beans would compound pricing discrepancies and concerns about the quality of exchange inventories, the National Federation of Coffee Growers of Colombia said in a June 9 letter to ICE Futures. The ICE contract allows deliveries to exchange-licensed warehouses in the ports of New York, New Orleans, Houston, Miami, Bremen/Hamburg, Antwerp and Barcelona. Brazilian beans will be accepted for the March 2013 contract onwards. Colombia is the second-largest grower of arabica beans favored by specialty coffee retailers, including Starbucks Corp. Brazil, the top arabica grower, is the second-largest producer of robusta beans used in instant coffee and harvested mostly in Asia and parts of Africa. Vietnam is the biggest robusta grower. Arabica-coffee futures for March 2011 delivery, the most active contract, were little changed at $2.0455 a pound yesterday. Prices have climbed 50 percent this year. |
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