Coffee News from around the world for Nov 18
Nightrider
OCTOBER 2010
Exports down on heavy rains
Coffee exports from Guatemala totalled 70,028 60-kg bags in October
2010 down from 83,211 in the equivalent month last year, Guatemala's
National Coffee Association, or Anacafe reported earlier this week.
The drop in last month's exports can be attributed to a delay of the
harvest after roads to coffee farms were damaged by months of heavy
rains.
The central American country exported 3,444,053 bags in 2009/10 and
expects to produce 3.76 mln 60-kg bags of coffee in 2010/11, up 11.4%
from the previous harvest
Ucda reports lower shipments in October
Coffee exports fell 5.5% on year in October due to low stocks in the
hands of producers and traders, the Uganda Coffee Development
Authority, or Ucda reported on Wednesday.
MONTHLY COFFEE MARKET REPORT OCTOBER 2010
Coffee prices during the month of October remained firm despite an
overall fallback due to a decrease in Arabica prices. The monthly
average of the ICO composite indicator price was 161.56 US cents per
lb in October, a slight decrease of 1.3% compared to 163.61 US cents
per lb in September.
However, the ICO daily composite price recorded high levels towards
the end of the month, at 172.57 US cents per lb on 29 October, the
highest level since 9 June 1997.
Market behaviour in October was also characterized by a significant
rise in Robusta prices, which recorded their highest levels in two
years, resulting in a reduction of the differential with Arabicas.
Volatility increased on the futures markets of New York and London by
24.1% and 71.3% respectively.
Supply concerns contributed to the firmness of coffee prices, due to
unfavourable weather patterns in a number of countries.
In particular, heavy rains in Robusta producing countries including
Vietnam, Indonesia and India, also supported the rise in Robusta
prices. Unexpected rains have affected production in Central America
and also Colombia, which has already experienced low production levels
for three consecutive crop years.
Exports by all exporting countries during September totalled 8 million
bags, bringing the cumulative total for the coffee year 2009/10
(October 2009 ? September 2010) to 93.8 million bags as against 97.4
million bags for the previous coffee year 2008/09, representing a fall
of 3.8%.
Total exports for the first nine months of calendar year 2010 were
71.5 million bags compared with 73.9 million bags for the same period
in 2009.
Coffee Board to revise its crop estimate
The Coffee Board of Kenya is revising its estimates for the 2010/2011
crop season following a widespread attack on the crop.
New season gets off to a slow start
The growing season in Honduras got off to a slow start with shipments
in the first month of the new 2010/11 (Oct/Sep) crop year largely
consisting of beans from the around 160,000 60-kg bags of coffee
carried over from last season.
Fresh coffee supplies from the higher-altitude regions are expected to
reach the market at the end of November or at the beginning of
December.
Exports reached 18,475 60-kg bags, down 1.8% from 18,816 shipped in
October 2009.
According to the national coffee institute (Ihcafe), Honduras exported
3,160,881 60-kg bags of coffee in 2009/10.
The country expects output to rise 6.4% on the year in 2010/11 to 3.83
mln bags
COSTA RICA Exports up 49 percent in October
Costa Rica shipped 34,003 60-kg bags of coffee in the first month of
the new 2010/11 (Oct/Sep) crop year, up 49% from 22,807 bags recorded
in the same month last year, the national coffee institute (Icafe)
reports.
Ecx transactions up 142 percent on year
The trade transactions at the Ethiopian Commodity Exchange (Ecx)
surged 142 percent during the concluded budget year reaching a total
value of 6.7 billion birr (US$ 405.6 million).
The Exchange traded some 221.9 tonnes of commodities during the
reported year, 99 percent of which turned out to be coffee destined
for export and local market, according to the ceo Dr. Eleni Zaude
Gebre Medhin.
Our capacity is moving up. In the next budget year we will undertake
the exclusive trading of sesame and white pea beans, like coffee,?
Eleni said at a press conference held Thursday in Addis Ababa. The
trading of the two products is expected to be launched this month.
The past two years the exchange commodity has mainly focused on the
trading of coffee, which is the backbone of Ethiopias economy.
In the past budget year about 221,000 tons of coffee and other
products have been traded under the Ecs versus 138,000 tons the
previous year.
CAMEROON Farm-gate Arabica price slightly up last week
Cameroons farm-gate Arabica coffee price increased 0.5 percent in the
week through Oct. 31, report local trade sources.
The average price of washed and dried arabica, known as parchment,
rose to 1,010 cfafrancs ($2.15) a kilogram (2.2 pounds) from 1,005
francs a week earlier.
Ice Coffee Committee issues recommendation to allow delivery of
Brazilian arabica beans
The coffee committee, an advisory body of the IntercontinentalExchange
Inc. (Ice) recommended late Wednesday allowing the delivery of
Brazilian arabica coffee beans against the benchmark future contract,
according to sources familiar with the situation.
The committee recommended to the exchange on Wednesday to allow washed
and semi-washed coffee produced in Brazil to be delivered to the Ice
Futures U.S. ICE.N "C" contract, said trade sources.
It was the first major victory for growers in top coffee producer
Brazil, who for years have argued that allowing their beans into the
contract would increase liquidity and improve hedging.
"It would give more liquidity to these types of coffees and more
transparency to the market. It would bring more stability because New
York would reflect what is happening in the market," said in an
interview the director for coffee at Brazils agriculture ministry,
Roberio Silva.
An Ice spokesman confirmed that the committee made a recommendation
but did not disclose what the committee had decided or when the Board
of Ice Futures U.S. will make a final decision.
The proposal now goes to Ices board, which has the authority to amend
the rules for the futures contract.
Ice confirmed the meeting took place but didn't confirm the decision
on Brazilian beans.
"While the issue is pending action by the board, the exchange will not
provide further details on the recommendation, or additional comments
on the process," Ice said in a written statement. "There has already
been ample opportunity for submission of comments on this issue, but
the exchange continues to welcome comments from interested market
participants."
If the board approves the proposal, the change would not take affect
until 2013 at the earliest.
Rival producers in countries such as Colombia and Guatemala have
opposed the idea.
Both of those countries produce high-quality washed arabica beans, and
say Brazilian beans could depress prices and hurt the "C" contract as
a hedging tool.
"If we consider that the New York C contract in the last few years
hasnt reflected real prices, it will do so even less now and its going
to mean that the price in New York will not be a reference for the
coming harvest," said Ricardo Villanueva, president of the Guatemalan
coffee growers association Anacafe.
INDIA Italy, Germany and Russia are the main export markets
According to Coffee Board estimates, production in India during the
year is likely to go up to 308,000 tons from 289,000 tons last year.
Higher production will enable a spurt in overseas shipments.
India exported 196,000 tons of coffee in the 2008-09 fiscal, of which
exports to the US and Japan accounted for just 0.99% and 0.85%,
respectively, of the total shipments.
Shipments to Italy, Germany and Russia constituted 41% of Indias total
exports during the year.
Italy, Germany and Russia are our large export markets. However, we
are working on to boost exports to markets with huge potential like US
and Japan. We can supply more to these countries, said in an interview
the Coffee Board chairman Jawaaid Akhtar.
VIETNAM HDBank funds 2 VNDtrillion for coffee exporters
HCM City Housing Development Commercial Joint Stock Bank (HDBank) has
launched a programme for funding working capital for coffee production
and trading purposes.
The customers can use their own finished coffee products as the
guaranteed assets so as to borrow money from the bank with
preferential interest rates. The total capital to be spent on this
programme may reach 2 trillion dong (about US$100 million).
The borrowers can access the capital source by opening an account at
HD Bank. The bank will disburse the loan within one working day if the
customers meet all the requirements. In addition, the customers can
enjoy other convenient services such as free of service charges for
transferring money via eBanking network, supporting in payment
services in foreign currencies in accordance with the current
regulations of State Bank of Vietnam (SBV) etc.
The programme will start from November 2010.
UGANDA Ucda welcomes the appointment of Henry Ngabirano to head the
International Coffee Council.
The Uganda Coffee Development Authority (Ucda) welcomes the recent
appointment of its managing director Henry Ngabirano, during the 105th
session of the Council in London, to head the International Coffee
Council.
According to Ucda, the appointment of Mr Ngabirano is recognition of
Ugandas role in the international coffee market where it ranks as the
second largest African producing country and 10th internationally.
Mr Ngabiranos appointment puts Uganda in an influential position as
far as policy decisions are concerned and the benefits will definitely
trickle down, a statement from Ucda said.
Fair Trade Certified sales up 30 percent in grocery stores
Fair Trade USA, the leading third-party certifier of Fair Trade
products in the United States, celebrates National Fair Trade
Awareness Month with a multitude of news announcements from household
brand names to coincide with the Natural Products Expo East in Boston.
Fair Trade has generated significant momentum during 2010 in the
United States. Ben & Jerry's and Green & Black's kicked-off the year
by announcing they would convert 100 percent of their products to Fair
Trade Certified? ingredients; Green Mountain Coffee converted two of
its top iconic blends?Our Blend and Vermont Country Blend?to Fair
Trade; certified coffee imports were up 25 percent and 47 percent of
all imports were also organic; Fair Trade cooperative CECOVASA was
awarded the People's Choice Award at the Specialty Coffee Association
of America's Cupping Competition; and the Fair Trade Towns USA
campaign increased the number of official Fair Trade Towns from 13 to
20, including Boston.
And now SPINS, the first company to offer Natural Products sales data
to the industry, has issued a report that builds on that strong
foundation. SPINS reports that sales of Fair Trade Certified? products
at grocery stores grew by 30 percent this year, to $140 million, lead
by growth in packaged coffee (44 percent), and ready-to-drink tea and
coffees (51 percent).(1) Other notable double-digit contributors
include the refrigerated juices & functional beverages category that
was introduced in 2009 (98 percent), carbonated beverages (38
percent), chocolate candy (29 percent), and shelf stable functional
beverages (10 percent). Frozen desserts are up eight percent and teas
are up four percent, with cocoa and hot chocolate as the only category
to experience a decline, down eight percent.
This is yet more proof that even in tough economic times, consumers
care. In 2009, the BBMG Conscious Consumer Report stated that three-
fourths of consumers (77 percent) believe they can make a difference
by buying products from socially and environmentally responsible
companies, and two-thirds agreed that even in tough economic times
it's important to buy products with social and environmental benefits
(4 point scale). And over half (51 percent) agreed that they are
willing to pay more. (Source: Fair Trade USA)
Coffee-n-Caffeine offers a wide selection of Fair Trade Certified
coffees. http://www.coffeecaffeine.com
Is Wi-Fi in Coffee Shops a leading economic indicator?
I spend a lot of time in coffee shops writing these days. I don't know
why, perhaps many of you have experienced this, but I seem to have a
very productive time writing when there is the smell of fresh coffee,
the sound of cappuccino machines and the white noise of the coffee
crowd to add to the ambience. Sometimes this environment triggers a
burst of creativity that is second to none on the productivity front.
My wife tried to fight this tendency for a while arguing that it was
all in my mind and I could be just as effective at home sitting
quietly in my office, but we've since come to an understanding on this
matter. Besides - caffeine is a big part of my success at this
juncture in my life.
I must not be alone in this, because the so-called "coffee culture"
effect has been measured in many economies and can be seen as directly
contributing to growth in both economic terms and in relative growth
in the retail sector. However, there is an additional element here
that I've noticed as a leading indicator of an economy's capability to
absorb innovation.
Thai Hoa sells 10-per-cent stake to VinaCapital
Thai Hoa Corporation, a company specialising in coffee production and
export, will sell a 10-per-cent stake to VinaCapital under an
agreement concluded yesterday.
Under the terms of the acquisition, VinaCapital will assist the Thai
Hoa Group in capital, relationships and partnerships in order to
improve the groups financial management capacity, develop its
trademark and promote its products.
A cooperation agreement to this effect was signed in Hanoi on November
16 between the Thai Hoa Group and VinaCapital.
The value of the contract wasn't released.
VinaCapital thanks Chief Operating Officer Brook Taylor stressed the
groups capacity for development due to its expansion of Arabica coffee-
growing areas and promotion of high-quality coffee exports.
He said VinaCapital believes the group will remain a leading firm in
Vietnams coffee industry thanks to its solid development and
investment strategy, from planning materials areas to producing coffee
with high added value.
Thai Hoa chairman Nguyen Van An said that the acquisition reflected
VinaCapital's strong confidence in Thai Hoa's business strategy and
prospects.
The support of VinaCapital would also help Thai Hoa strengthen its
position in domestic market, An said.
The Thai Hoa group has a charter capital of US$ 28 mln and ranks third
in terms of coffee export market share in Vietnam.
Ntcd raises prices for organic coffee
National Tea and Coffee Development Board (Ntcd) has raised price of
Nepali organic coffee in domestic market.
A meeting of the price fixation committee held Tuesday decided to
increase the selling price of fresh cherry and coffee parchment for
domestic buyers.
Prices of fresh cherry and coffee parchment have been set at Rs 30 and
Rs 150 (US$ 2.1) per kg, up from Rs 27 and Rs 142 per kg respectively.
However, export prices are fixed by exporters themselves as per the
negotiation with overseas importers.
Producers are upbeat about the prospect of exports of Nepali coffee in
the coming days with the registration of trademark of Nepal organic
coffee at the Department of Industry (DoI) Monday.
Exports through Lampung down 28% in October
Coffee exports through the port of Lampung were down 28% to 25,640
tons worth USD 40,649 in October. In September 2010, the volume of
coffee exports reached 35,630 tons with a value of USD 55,122.
The fall in coffee exports was triggered by the expiration of the
coffee harvest in Indonesia.
Coffee sector assessing damages after storms
As the 2010-11 season gets under way, Mexico is still assessing damage
to crops from recent storms. The storms caused damage to roads and
homes in some of Mexico's coffee-growing areas, complicating access
and generating concern that harvesting would get off to a slow start.
Meanwhile, coffee exports from Mexico fell 28.2% on year in October to
103,641 60-kilogram bags, the Agriculture Ministry's coffee department
reported on Tuesday.
The value of exports in October reached $22.6 million 18.9% down on
the same month last year.
The US was the biggest market for Mexico's coffee exports in October,
taking 74% of the shipments, followed by Costa Rica at 7%.
In the October 2009-September 2010 coffee export season, Mexico's
exports reached 2,566,625 bags, down 7.5% from 2,774,680 bags in the
like period of 2008-09 earning US$505 million.
Developing a taste for local coffee
When Chinese people saw their first Nescafe commercial in the early
1980s with its slogan "The Taste is Good" on their old black-and-white
television sets, it was thought unlikely they would take to the
foreign drink made so far away from their own country with its deep-
seated tradition of drinking tea.
However, it seems to have won people over and has led to the world's
leading coffee makers growing the beans in Yunnan, the province
regarded as the cradle of Pu'er tea.
China's southwestern Yunnan province is about the same latitude as
some of the world's top coffee-producing regions and now accounts for
99 percent of China's total production of the energizing drink. The
region is now a key front in the war between international coffee
giants.
Recently, Swiss-based Nestle SA, the world's largest food company by
sales, added Nescafe Yunnan Arabica coffee to its beverage portfolio,
pinning much hope on its success.
The world's largest coffeehouse chain, Starbucks Corp, launched Yunnan-
originated coffee products in January 2009. The exotically named South
of the Clouds Blend is a mixture of whole beans grown in Yunnan and
other Asia-Pacific regions.
During the first three quarters of 2010, coffee exports in Yunnan were
worth about $85.9 million, an increase of $26.6 million compared with
the same period in 2009, according to figures from Yunnan provincial
government.
In addition, the plantation area was increased to more than 30,000
hectares in 2009 from 18,000 hectares in 2005.
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