August 4, 2017 / 12:15 PM / 3 years ago

Engelhart CTP gains foothold in certified robusta coffee -sources

* BTG Pactual spin-off bought most robusta tendered against July

* Move could signal demand or strategic grip on certified stocks

By Ana Ionova

LONDON, Aug 4 (Reuters) - Engelhart CTP, the commodity trader spun off by Brazilian bank Grupo BTG Pactual, bought the bulk of robusta coffee tendered on the ICE futures exchange in July, sources told Reuters.

The firm is behind the 7,485 lots taken by broker Macquarie Bank Ltd, three industry sources familiar with the matter said. That volume is just shy of the maximum any buyer can purchase in a single delivery period.

A total of 7,687 lots were delivered against the July robusta coffee contract which expired on Monday.

Engelhart CTP declined a request for comment.

The purchase represents a transfer of ownership of about half of certified stocks, ICE exchange data shows.

The volume purchased has fuelled market speculation that the trade house is looking to gain a strategic grip on these certified supplies.

The coffee could alternatively have been sold to a roaster, which would see certified stocks start to draw down in the coming weeks.

However, trade sources said demand is subdued and coffee is plentiful in Europe and in origin countries, after trade houses stocked up in anticipation of tight robusta supplies later in the season.

“There is very little demand,” said one source. “And there’s a huge amount of unsold coffee in Vietnam. Indeed, warehouses are still full there.”

If the coffee is not taken out of certified ICE warehouses, market participants said they will be monitoring whether the buyer returns to market in the September delivery period to further extend their grip on stocks.

“It’s a play that’s not worth doing half-heartedly,” said another source. “If you’re going to do it, you need to have near 100 percent of the certs.”

BTG Pactual spun off Engelhart CTP last year in a bid to free up capital following a scandal that sparked asset sales and put pressure on its balance sheet.

The firm’s business includes trading in agriculture, energy, metals and minerals, according to its website. (Reporting by Ana Ionova; Editing by Veronica Brown and Susan Fenton)

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