ICE coffee exchange stocks tumble to 3-yr low amid high differentials

miércoles 30 de septiembre de 2015 14:06 GYT

By Luc Cohen

NEW YORK, Sept 30 (Reuters) - U.S. coffee roasters have drawn down certified stocks to their lowest levels in three years, as soaring premiums for high-quality Central American beans have prompted them to incorporate older beans from the exchange in their blends instead.

The level of certified arabica coffee stored in ICE Futures U.S. warehouses fell below 2 million 60-kg bags on Tuesday, the most recent day for which data is available, totaling 1,998,621 bags. It was the first time since September 2012 that the levels fell below 2 million bags.

The declines have been pronounced for beans from Central American origins. Production of these beans, prized for their quality, has been hurt by dry weather and lingering effects of a leaf rust disease known as roya.

This has boosted the differentials roasters pay for physical delivery of the beans on top of ICE Futures U.S. prices to some of the highest levels in years.

For example, the premium for strictly hard bean Guatemalan coffee COF-GT-NYC rose to a near five-year high at 39 cents a lb this summer and is currently trading at 34 cents a lb, and Nicaraguan strictly high grown beans COF-NIC-NYC rose as high as 32 cents a lb and are currently trading at 28 cents a lb.

Since July 9, when stock levels peaked at 2.16 million bags after a month-long period of relatively steady growth, Guatemalan coffee stocks have fallen 65 percent to 8,470 bags, El Salvadoran stocks have fallen 46 percent to 11,492 bags and Nicaraguan stocks have fallen 20 percent to 81,208 bags.

Mexican and Costa Rican beans have also seen double-digit declines. Roasters have been willing to take these beans, which are often two to three years old, off the exchange at a discount and blend them with Colombian beans rather than pay up for new crop coffees, one U.S. importer said.

"People are buying old coffee instead of paying high differentials," the trader said.

The only origin that has seen growth in certified stocks during that period is Colombia, whose inventory levels have risen by 16 percent to 434,032 bags amid expectations for a strong crop and lack of demand by well-covered roasters.

Many roasters have taken advantage of Colombia's persistent, but historically rare, discount to Central American beans to incorporate Colombian beans, also prized for their flavor, into their blends. (Reporting By Luc Cohen; Editing by David Gregorio)