Brazil coffee market takes shelter as harvest storm brews
By Reese Ewing
SANTOS, Brazil May 21 (Reuters) - In Santos, where Brazil's normally bustling physical coffee trade is clustered in a handful of small buildings near the port, the family-owned brokers and multinational companies that move almost half the world's arabica exports are eerily quiet.
With prices wildly volatile and uncertainty over the impact of the worst drought in 50 years mounting, spot business has ground almost to a halt, traders and roasters said.
With Brazil about to enter the June-through-August harvest peak, forecasts for the crop are still all over the map, and futures prices have been swinging as much as 10 percent a day due to the uncertainty.
Such conditions can easily magnify what would normally be a forgivable mistake for a trader into a career-ending one, a situation that has prompted many middlemen to take a step back.
"This week we moved maybe a couple containers," Daniel Wolthers said from the green-coffee grading room of Wolthers Associates in Santos.
The quiet market belies the brisk trading that occurred here from December to early March, when producers were pushing the remains of last year's crop as prices rose due to the drought.
"We had some good days early in the year, when we were moving 100 containers. That's a day when you take the office out after work and pop Champagne," Wolthers added.
For now, exports of green coffee continue to flow out at a pace of 2.5 million to 3.3 million bags a month and growing demand is expected to erode now hefty stocks, support prices and eventually force new sales by September, traders said. Continuación...