UNITED STATES 31st December 2010

IntercontinentalExchange (ICE) in mid-December announced that its Board had approved Brazil as a deliverable origin under the New York "C" arabica coffee contract.

Approving the new origin at a differential of 900 points or 9 cents under par, ICE said that Brazils would become deliverable with the March 2013 contract.

ICE currently allows arabica from 19 origins to be delivered against the "C" contract.

The move follows a recommendation after consideration by the exchange's Coffee Committee, which in October advocated changing the rules to allow Brazils to become deliverable (see separate story here).  

Making Brazil tenderable on the exchange is opposed by the Specialty Coffee Association of America, which said in a statement that the move would do nothing to address the current uncertainty and volatility of the market, and could potentially depress basis prices and increase differentials for other washed arabicas, if more coffee were produced to be tendered than the market could absorb.