950804

Brazil coffee trade

prepared for a

sleepy August

RIO DE JANEIRO: Brazilian coffee traders were preparing themselves for a slow month, with hot weather in the U.S. and Europe expected to dampen even further what is seasonally a slow period for demand.

"When temperatures are soaring in Europe and the U.S., I'm afraid we can only expect demand to wilt," said one trader.

"Due to holidays abroad, hot summer weather, very little demand lately, the feeling we have is that German roasters are more covered (two to three months) and Scandinavians less (four to five weeks)," said Santos export firm Icatu/Sumatra.

Some feel this cover could be extended due to the extremely high temperatures seen in the northern hemisphere.

"If Scandinavians have four to five weeks under normal conditions, this could well be stretched as this is not normal. And most of the European roasters I think are covered until the end of the year," one trader said.

"July was a quiet month, August is going to be even worse. In September I hope it will it get a little better" he added.

Certainly in September, some dealers are hoping to see an improvement in prices ahead of the next meeting of the Association of Coffee Producing Countries (ACPC) in London.

By then, the ACPC should have details of how much coffee has been retained under a global scheme initiated as early as the start of the year in some countries to boost prices.

It should also have early results of another parallel and more recent plan to limit world exports to 60.4 million bags in the 12 months to June 1996.

"At the moment, overseas roasters don't want to believe this plan is going to work. But I think you will start to see a price movement before the next ACPC meeting. September is going to be a very important month," one dealer said.

Under the export limitation scheme, Brazil is to keep its exports below one million bags a month. Government officials announced yesterday that export registrations for July were 929,000 bags, of which 743,000 had been shipped so far.

With exports theroretically to be stable over the next year, the next "event" in the Brazilian market will be the first sale this year of government stocks to the home market, dealers said.

The auction rules were to be set this week but an auction will only take place when the trigger price of 147 reais a bag for Type 8 Cob livre do Rio is exceeded for 10 days.

At present Type 8 Cob livre do Rio is trading at around 140 reais per bag, dealers said.

Santos broker Wolthers & Associates quoted speciality 17/18s at 15 over New York for Aug/Sept shipment, fine 17/18s at two over and Swedish qualities at 4.5 under.

Escritorio Carvalhaes on August 3 quoted fine-to-extrafine Mogiana/Minas green beans at 140/142 reais per 60 kg, down slightly from last week's 142/144 reais.-Reuter