Brazil Requests Coffee included in "C" Contract

This is Brazil's third attempt to get its coffee traded on the New York's "C" market; if accepted, the price of arabica beans could drop to as low as $30 per hundredweight.

Tuesday, August 24, 2010

This is in the context of arabica futures currently trading at more than $180 per hundredweight, largely due to falling supplies.

Though the South American giant's request is expected to be rejected again by the New York Stock Exchange, this new attempt will sound alarms in coffee markets, since if arabica harvests continue to fall and demand cannot be satisfied then Brazil's entry into the coveted "C" contract club could become a reality.

Brazil's growers have already started switching their production to arabica beans, attracted by the higher prices. The differences are such that Brazil is offering its coffee on the Intercontinental Exchange (ICE) with discounts of up to $0.09.

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