U.S. coffee traders face delays as suppliers haggle over price
By Marcy Nicholson
NEW YORK, July 11 (Reuters) - U.S. coffee traders say they face months-long delays in getting shipments as suppliers from Central America to Asia push to revise contracts, the latest sign that the meteoric rally in arabica futures earlier in the year has disrupted trading.
At least one supplier is demanding customers fork out more cash for beans that were contracted before arabica prices nearly doubled in the first few months of the year as a long drought scorched the coffee belt in top grower Brazil.
In March, some local traders in Colombia ripped up contracts as prices took off, but this is the first time since the rally that U.S. traders have said suppliers have ditched efforts to negotiate more flexible terms and are using tougher tactics.
One U.S. importer who spoke on condition of anonymity said a supplier is holding his coffee ransom unless he pays more than what was originally agreed.
"They say, 'Give me more money and I'll deliver'," he said.
He is owed three lots (112,500 lbs) of arabica coffee, which are now worth $183,375 based on futures prices, roughly $50,000 more than before the rally that started in late January.
For now, he said will not bow to the demands.
He added that seven containers (roughly 2,100 60-kg bags) of arabica from Costa Rica, a small high-quality producer, that were due to land in the United States in December 2013, have still not arrived, forcing him to buy elsewhere at higher prices, while still holding the exporter to the contract. Continuación...