LONDON (Reuters) - A batch of Brazilian Arabica coffee has been certified to be ready for delivery on the ICE exchange, reinforcing bets that increasing coffee availability at the world's largest producer will soon begin to ease supply concerns and weigh on future prices.
Certified stocks of arabica in ICE warehouses are currently at minimum levels for 20 years, and an influx of Brazilian beans could provide a significant boost, although it is still unclear whether Brazil's coffee will be able to pass the stock exchange's strict quality controls in significant quantities.
ICE's futures are guaranteed by "washed" coffee beans, while Brazil mainly produces natural beans, although this season's record harvest is of high quality and contains a good amount of "semi-washed" lots.
Latest ICE data shows that 855 60 kg bags of Brazilian Arabica in stock exchanges in Antwerp were classified for delivery last Friday, more than doubling, in one day, the total amount of Brazilian coffee held by the stock exchange .
The data also showed, however, that 3,060 bags of coffee failed the quality check. If, as some suspect, all or most of the bags that failed were Brazilian coffee, this could limit further deliveries from the South American nation.
"It can only be Brazilian coffee (which has not passed inspection)," said a London coffee trader. "If you look at (the physical prices of coffee), the only coffee from these last few months that was viable to deliver was from Brazil."
The exchange of pass and fail data does not specify the country of origin.
The differentials or awards for coffees that are usually delivered to ICE, such as Honduras, have increased to record levels this season, making it unviable to hand them over to the exchange.
Speculation is circulating in the market that between 200,000 and 500,000 bags of "semi-washed" Brazilian coffee would be delivered to the stock exchange by the end of the year.
Os futuros da ICE estão altamente correlacionados com os estoques da bolsa.
Since July 1, prices have increased by about 32%, exceeding $ 1.30 per pound, while inventories have fallen by about 29%, to less than 1.2 million bags.
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