Brazil's coffee market saw few trades Thursday as buyers balked at soaring prices.
"It is very difficult for people to adjust to the new prices," an independent coffee broker in Rio de Janeiro told Dow Jones Newswires. The broker said transactions were rare Thursday.
"There are two main factors today, the walkout of truck drivers in Colombia and a smaller harvest in Mexico," said John Wolthers, a trader at Comexim in the Brazilian port city of Santos.
Colombian President Juan Manuel Santos said late Thursday he thinks the government is "near a solution" to a two-week-old truckers strike that has pinched coffee exports.
Wolthers termed trading "slow" as buyers face higher prices. Arabica coffee futures for March delivery on ICE settled 3.7% higher at a new 13 1/2-year high of $2.6735 a pound, with concerns about supply shortages persisting amid uncertainty about unresolved trucker strike in Colombia obstructing coffee deliveries or creating backlogs.
Brazil may have "very little" coffee available by midyear, when beans from the new crop start to enter the market, Wolthers said in a report to clients this week. The analysis is based on an estimate of total carryover of 30,066,210 sacks in Brazil on Jan. 1. Each bag is 60 kilograms, or 132 pounds.
The analysis assumes that the exports of green and soluble coffee will continue at a high level similar to sales abroad in January and that Brazil's domestic consumption continues at a rapid pace, Wolthers said.
Brazil exported 2.7 million bags of coffee in January. Brazilians will consume over 1 million more bags of coffee in 2011, breaking more records as the economy continues to boom, and Brazil is set to overtake the U.S. as the largest consumer by 2012, the Brazilian coffee roasters' association known as Abic said on Jan. 26.
Brazilian coffee consumption is set to rise 6% to a record 20.27 million 60-kilogram bags this year, according to Abic, despite sky-high prices for beans.
"For all in the trade, one must prepared for the possibility of still higher markets and the consequences that this may bring in relation to the financial strains imposed at all levels," Wolthers said in the report.
A poor harvest caused Mexico's coffee exports to decline 26% year on year during the first four months of the season, which began in October. Mexico's government says this crop cycle's harvest will be 5% larger than last year's, at 4.4 million bags. Agroindustrias Unidas de Mexico, though, the largest coffee exporter, isn't as optimistic, estimating 3.5 million bags will be produced this year.
source: http://coffeeasean.org/details.asp?Object=5&news_ID=18236062
Monday, February 21, 2011
Dollar Drops Versus Euro on Speculation Fed Won't Increase Interest Rates
The dollar fell against the euro for the first week in almost a month as the Federal Reserve signaled its dissatisfaction with job growth, bolstering speculation it will be slow to increase interest rates.
The greenback dropped against most of its major peers as lower-than-forecast retail sales and a rise in jobless claims damped demand. The Swiss franc surged as investors sought safety amid Middle East turmoil, while the pound rose against the dollar and euro on speculation the Bank of England will raise interest rates. The U.S. economy grew faster in the last quarter of 2010 than first estimated, data next week may show.
“The Fed reiterated that they will maintain a high bar for rate raises,” said Aroop Chatterjee, a currency strategist at Barclays Plc in New York. “Diminished expectations for rate hikes have been U.S. dollar negative.”
The dollar fell 1 percent to $1.3693 per euro in New York, the first weekly loss since Jan. 21, from $1.3554 on Feb. 11. Europe’s shared currency rose a second week versus the yen, gaining 0.7 percent to 113.90 and touching 113.92, the strongest level since Jan. 27. The yen had its first five-day advance against the dollar since Jan. 28, gaining 0.3 percent to 83.18.
The euro gained yesterday against most major counterparts after a European Central Bank Executive Board member, Lorenzo Bini Smaghi, said policy makers may need to raise interest rates as global inflation pressures mount.
‘Degree of Accommodation’
“As the economy gradually recovers and global inflationary pressures arise, the degree of accommodation of monetary policy has to be monitored and, if needed, corrected,” Bini Smaghi said in an interview with the daily newsletter Bloomberg Brief: Economics.
The ECB has held its benchmark interest rate at 1 percent since May 2009.
U.S. policy makers “continued to express disappointment in both the pace and the unevenness of the improvements in labor markets,” while also judging the recovery to be on a “firmer footing,” the Federal Open Market Committee said in minutes of its Jan. 25-26 meeting, released Feb. 16. They were divided over whether further evidence of recovery would warrant slowing or reducing $600 billion in U.S. debt purchases to spur growth.
The central bank has left its key rate at zero to 0.25 percent since December 2008 to support the economy. Analysts forecast the rate will rise to 0.5 percent by year-end, according to the weighted average in a Bloomberg News survey.
The dollar had the biggest loss this week, 1.4 percent, among 10 developed-nation currencies in the Bloomberg Correlation-Weighted Currency Indexes.
Krone, Franc Gain
Norway’s krone, a currency linked to oil exports, and the Swiss franc, considered a haven currency, gained the most, the indexes showed. They rose 2.1 percent and 1.9 percent as unrest surged in the Mideast and oil prices climbed.
Egyptian state television said yesterday Iran won permission to sail two naval ships through the Suez Canal in a move Israel called a “provocation.”
“The warships can increase tensions potentially between Iran and Israel, and since Israel is one of the U.S.’s closest strategic allies, that can weigh on the dollar,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency-exchange network.
Crude oil for March delivery increased 0.7 percent, the most in five weeks, to $86.20 a barrel in New York on concern supplies may be disrupted.
The franc gained for the week versus 15 of its 16 most- traded peers. It rose 3 percent, the most since Dec.3, to 94.46 centimes per dollar and was up 1.9 percent to 1.2935 per euro.
Top Performer
Norway’s krone was No. 1, climbing 3.2 percent to 5.6684 per dollar and touching 5.6654, the strongest in 13 months. It appreciated 2.2 percent to 7.7609 to the euro.
The 17-nation currency rose against the greenback on Feb. 17 as Labor Department data showed applications for unemployment benefits rose to 410,000 in the week ended Feb. 12, exceeding the 400,000 median forecast in a Bloomberg survey.
Retail purchases in the U.S. rose 0.3 percent last month, Commerce Department data showed on Feb. 15, the least since a drop in June. A Bloomberg survey forecast a 0.5 percent gain.
The U.S. economy expanded at a 3.3 percent annual rate from October through December, according to the median estimate in a Bloomberg survey before Commerce Department data due Feb. 25. The rate was estimated in January at 3.2 percent. It was 2.6 percent in the third quarter and 1.7 percent in the second.
Yields Fall
The yen strengthened versus the dollar this week as investors sought the safety of U.S. Treasuries, driving yields down and dimming the attraction of dollar-denominated assets. Yields on U.S. two-year notes decreased nine basis points, the most since the five days ended Sept. 17, to 0.75 percent.
Sterling climbed as pressure increased on the Bank of England to raise its key rate from a record low of 0.5 percent. A Feb. 15 report showed inflation accelerated to double the central bank’s 2 percent target. Bank Governor Mervyn King said the next day inflation will peak this year and ease in 2012. The pound strengthened 1.5 percent to $1.6253.
“Most commentators are at least mildly bullish on the pound,” said John McCarthy, director of currency trading at ING Groep NV in New York. “I’m not sure if it’s justified, because it’s based on rate expectations and King moderated that.”
China’s yuan reached a 17-year high versus the dollar on speculation the nation will allow faster appreciation to tackle inflation and appease trading partners who say it’s undervalued.
The yuan gained 0.21 percent to 6.5732 per dollar as Group of 20 finance ministers and central bankers opened a summit in Paris yesterday in an effort to agree on a common approach to
Source: http://www.bloomberg.com/news/2011-02-19/dollar-drops-versus-euro-on-speculation-fed-won-t-increase-interest-rates.htmlglobal economic imbalances.
Shift north helps Brazil cut coffee harvest swings
It is not just the cycle of "on" and "off" years of coffee production that Brazil may be getting to grips with, but the risk of hefty bean losses to subzero temperatures too.
Global warming may have played a part in the waning danger that frost has posed to Brazil's coffee crops, the world's biggest, in the last decade, sector expert Carlos Brando said.
However, a shift north by farmers to warmer climes has worked in staving off the threat too, with Brazil now going some 15 years without major freeze damage.
"The major crop losses shown in the mid-1970s and 1990s are less likely to occur," Mr Brando, at Brazil-based P&A Marketing,said.
Brazil's production of arabica beans plunged by 60% to 9,000 bags in the frost-hit 1976-77 season, sending New York futures above 330 cents a pound.
Zero-crop harvesting
The migration in coffee plantations has further raised prospects of a less volatile outlook for Brazilian coffee output, which even without weather setbacks has historically alternated between high and low production years.
Besides the greater use of washing in processing beans - a practice which sees trees stripped earlier of cherries so increasing the recovery period - the cycle is also being reduced by the greater use of irrigation.
Watering helps trees "to recover faster and better from the stress of bearing a large crop", Mr Brando said.
The spread of so-called "zero-crop" harvesting, in which trees are pruned to produce beans only in the "off" year when prices are usually higher, has also dampened the cycle.
Deficit ahead
Brazil faces an "off" season in 2011-12, although official forecasters have predicted a crop of 41.9m-44.7m bags, higher than that in many "on" years.
Nonetheless, information group CoffeeNetwork on Friday forecast that world coffee production would, at 131m bags, fall 4m bags behind consumption.
Arabica beans, the main variety produced in Brazil, would account for 3m bags of this deficit, CoffeeNetworkforecast.
source : http://coffeeasean.org/details.asp?Object=5&News_ID=17235131
Global warming may have played a part in the waning danger that frost has posed to Brazil's coffee crops, the world's biggest, in the last decade, sector expert Carlos Brando said.
However, a shift north by farmers to warmer climes has worked in staving off the threat too, with Brazil now going some 15 years without major freeze damage.
"The major crop losses shown in the mid-1970s and 1990s are less likely to occur," Mr Brando, at Brazil-based P&A Marketing,said.
Brazil's production of arabica beans plunged by 60% to 9,000 bags in the frost-hit 1976-77 season, sending New York futures above 330 cents a pound.
Zero-crop harvesting
The migration in coffee plantations has further raised prospects of a less volatile outlook for Brazilian coffee output, which even without weather setbacks has historically alternated between high and low production years.
Besides the greater use of washing in processing beans - a practice which sees trees stripped earlier of cherries so increasing the recovery period - the cycle is also being reduced by the greater use of irrigation.
Watering helps trees "to recover faster and better from the stress of bearing a large crop", Mr Brando said.
The spread of so-called "zero-crop" harvesting, in which trees are pruned to produce beans only in the "off" year when prices are usually higher, has also dampened the cycle.
Deficit ahead
Brazil faces an "off" season in 2011-12, although official forecasters have predicted a crop of 41.9m-44.7m bags, higher than that in many "on" years.
Nonetheless, information group CoffeeNetwork on Friday forecast that world coffee production would, at 131m bags, fall 4m bags behind consumption.
Arabica beans, the main variety produced in Brazil, would account for 3m bags of this deficit, CoffeeNetworkforecast.
source : http://coffeeasean.org/details.asp?Object=5&News_ID=17235131
Vietnam coffee output up 6 pct in main area-report
Vietnam's 2010/2011 coffee crop harvest produced 403,600 tonnes in the country's largest growing province of Daklak, up around 6 percent from a year earlier, a state-run newspaper reported on Friday.
The output, following an International Coffee Organization's upward revision of Vietnam's crop output , could help partially meet increasing demand by roasters who sought to buy the cheaper variety after a surge in arabica prices.
Daklak has 177,000 hectares (437,000 acres) of coffee under production, with an average yield of 2.28 tonne per hectare, the official Vietnam News Agency-run Tin Tuc (News) daily said, citing provincial agricultural department data.
The output estimate confirmed a forecast in September 2010, when Deputy Director Nguyen Van Sinh at the department told Reuters that output from the crop would rise to 400,000 tonnes.
Daklak, with a total of 182,400 hectares of coffee under plantation, produces around one third of the output from Vietnam, the world's second-largest producer after Brazil. The country's output makes up 13 percent of global coffee output.
Daklak's harvest, hit by rains last November , ended late last month, or two weeks earlier than usual as farmers tried to cut costs and protect cherries from thieves due to high prices.
Global prices surged 57 percent last year, while robusta prices in Vietnam jumped 56.5 percent.
The news report confirmed adverse weather had affected Daklak's coffee production, but the higher output was reached as more trees have became productive, from 175,000 hectares in the previous 2009/2010 crop.
Vietnam's coffee crop year lasts between October and September.
Farmers in Daklak and in four other provinces which form the Central Highlands coffee belt are due to feed trees with fertiliser and water them from next month until early May when the rainy season returns under the 2011/2012 production cycle.
Coffee trading in Vietnam is likely to remain lacklustre until a holiday next month, as slow sales by farmers and bank credit limits stop exporters buying, traders said on Tuesday.
source: http://www.vnbusinessreg.com/vietnam-coffee-output-6-pct-main-area-report/
UPDATE: SOFTS-Robusta coffee hits 2-1/2 year high, demand strong:
* Consumption growth triggers robusta coffee deficit
* Cocoa supported by turmoil in top grower Ivory Coast
* Sugar market awaits news on Indian exports
(Updates throughout, adds comment)
LONDON, Feb 21 (Reuters) - Robusta coffee futures climbed to a fresh 2-1/2 year high on Monday as the market retained its strong upward momentum, dealers said.
Cocoa futures on Liffe rose to 7-month high as the market eyed the deepening crisis in top grower Ivory Coast. White sugar eased slightly as physical demand remained slow following the recent run-up in prices.
ICE markets were shut on Monday for U.S. Presidents' Day.
"There's a lot of positive sentiment towards the coffee market," Andrea Thompson, analyst at CoffeeNetwork said, noting consumption growth was pushing the robusta market into deficit.
May robusta coffee stood $33 or 1.4 percent higher at $2,370 a tonne at 1256 GMT. It had earlier peaked at $2,372, the highest level for the second month since July 2008.
The advance in coffee has been led by ICE arabica futures which gained 7.1 percent last week and rose to the highest levels since May 1997, boosted by tight supplies following several below-par harvests in key producer Colombia.
High arabica prices have encouraged roasters to increase the volume of cheaper robusta beans in blends where possible.
"2010-11 should have been the third consecutive global surplus for robusta but it's now looking at a deficit. The Vietnam crop is fairly stable, it's really more the consumption growth (driving the deficit)," Thompson said.
Vietnam is the world's top producer of robusta coffee.
Brazil, the world's biggest coffee producer, is holding back its big bean stocks and hoping for improved market conditions in a wager that world prices will keep on rising, its top coffee official said on Friday.
CIVILIAN DEATHS
Cocoa futures rose as tensions in Ivory Coast showed no sign of easing, heightening concern about supply from the world's top grower.
Ivorian security forces killed at least three civilians when they opened fire to disperse gatherings in an Abidjan district on Sunday, and African leaders ended meetings to resolve a three-month post-election stand-off.
European Union sanctions and an export ban imposed by presidential claimant Alassane Ouattara have severely disrupted shipments of cocoa out of Ivory Coast.
"Restriction to flow of cocoa from the ports is no doubt having an effect with numbers ranging from 200-300,000 tonnes going nowhere, although allegedly smuggling is taking place," a London-based broker said.
May cocoa on Liffe was up 17 pounds at 2,280 pounds a tonne after earlier touching 2,297 pounds, the highest level for the second month since July 2010.
White sugar futures were slightly lower on a slowdown in nearby demand while a decision from India on whether to export 500,000 tonnes under Open General License (OGL) continued to be keenly awaited.
"Pressure this morning on whites may be a reflection of this (possible Indian exports), although we hear of no firm decision being taken," Sucden Financial said in a market note on Monday.
May whites fell a marginal $0.80 to $719.80 a tonne with prices now far below a record peak for the front month of $857.00 set on Feb. 2.
Dealers said a major short-term focus was the expiry of March raw sugar futures on ICE on February 28.
"End users may perhaps be awaiting the March expiry before acting, maybe hoping for a further breakdown in values," Sucden Financial said.
SOURCE: http://www.futurespros.com/news/softs-news/softs-robusta-coffee-hits-2-1-2-year-high,-demand-strong-1000007802
Rising commodity prices threaten stability in Latin America, Asia and Africa
Rising commodity prices are worrying governments around the world as they fear food riots could erupt again - much like they did in 2008. The United Nations reported that countries in Latin America and Africa are most at risk for food riots as the prices climb.
Protests in the Middle East and North Africa in recent week were partly fueled by the rise in food prices, which the UN said reached record levels in January. Robert Zoellick, the president of the World Bank, said in a speech Tuesday that food prices are increasing to "dangerous levels and threaten tens of millions of poor people" around the world.
The UN Food and Agriculture Organization identified countries around the world that are most sensitive to surging food prices, affirming "the low-income food deficit countries are on the front line of the current surge in world prices." Among other countries, governments face the "major burden" of higher food prices in Uganda, Mali, Niger, Somalia, Kyrgyzstan, Honduras and Haiti, the UN concluded in a report.
Inclement weather around the globe and simple supply and demand fundamentals have coalesced to drive commodity prices to near record levels over the past year. The World Bank estimates that mounting prices have pushed 44 million people into "extreme" poverty in developing countries since June.
SOURCE: http://www.ccstrade.com/futures-news/grains/story/rising-commodity-prices-threaten-stability-in-latin-am-800412848/
SOURCE: http://www.ccstrade.com/futures-news/grains/story/rising-commodity-prices-threaten-stability-in-latin-am-800412848/
Tea, coffee farmers smell record profits in 2011
Kenya’s tea and coffee growers are upbeat that last year’s record output will be sustained in 2011 on the back of favourable weather, as well as continued recovery in the global economy.
However, dry weather could cut production.
Last year’s tea output and export earnings attained record levels, posting 399 million kgs and Ksh97 billion shillings ($1.2 billion) respectively.
This was a 27 per cent growth in output and 40 per cent in earnings.
“The market is still weighing the favourable factors to see if they can sustain growth,” said Sicily Kariuki, the Tea Board of Kenya managing director, while expressing confidence that there will be no fresh shocks that could hurt tea earnings and output.
Ms Kariuki said Kenya is still attracting the emerging middle class among Asian countries to its tea, especially in India and China, two of the largest tea producers.
“In 2010, India increased its buying by an impressive 46 per cent, an interesting development since we have not marketed our tea in that country,” she said.
The Coffee Board of Kenya on the other hand, has lowered earlier projections that the commodity would rise by 28 per cent to 51,000 tonnes, from 40,000 tonnes.
The Board now predicts that volumes could dip by a similar percentage due to drought, although total value is expected to stay high.
The current production is a pale shadow of the peak of 129,926 tonnes in 1987-88.
Reports from the growing zones, however, indicate that the sector is headed back to 1980 levels when it acquired the nickname black gold.
“The prices are high and we expect better prices in the coming seasons,” said Loise Njeru, managing director of the Coffee Board of Kenya. Income from coffee exports will rise by 7 per cent this year to Ksh16 billion ($197 million) as higher prices offset lower production, the board said.
“Going forward, commodity prices are expected to rise a supported by the strength of global demand, especially from emerging economies,” said the IMF, adding that the rise will be steepest in oil and metals prices.
While the latest import data shows that consumption of coffee in importing countries picked up strongly in 2010, after a weak first quarter, especially in the European Union, the Economic Intelligence Unit continues to take a fairly gloomy view of demand growth.
Growth in demand will be constrained by increases in retail and coffee bar prices in response to higher wholesale costs (particularly for the popular mild arabica variety), as well as by renewed concern about the EU debt crisis and the outlook for the euro.
Kenya’s benchmark coffee grade AA surged as much as 40 per cent at the first auction of 2011 as buyers replenished their stocks after a five-week break, the Nairobi Coffee Exchange said.
The top AA grade sold for as much as $1,008 per 50-kilogramme bag, compared with $721 at the previous sale.
The International Coffee Organisation has projected that prices will remain high for many years, which offers developing countries like Kenya an opportunity to increase production.
By CATHERINE RIUNGU, The East African
http://in2eastafrica.net/tea-coffee-farmers-smell-record-profits-in-2011/
Food inflation to continue: fund manager
Food inflation is set to continue for some time as populations shift to industrial areas and emerging economies grow, Charles Funnell, a soft commodities trader with Swiss-based fund manager Aisling Analytics, said.
Speaking on the sidelines of the Kingsman Dubai sugar conference, Funnell said in an interview with Reuters Insider television that sugar importers were struggling to make margins due to high price volatility, and that in his view regulators may move to set “reasonability limits” to calm price swings.
ICE March sugar hit a contract high of 36.08 cents a lb on February 2, the highest price level in three decades. Food price inflation has surged up the political agenda globally after sharp rises in prices of grains and soft commodities, including sugar, coffee and cocoa.
Recent swings in futures markets such as sugar, driven in part by computer-generated trading, have complicated pricing even further. “The bad news for the consumer is that it (food inflation) is probably going to continue, and the reason is that there are more people, and people are moving from agricultural areas to industrial areas, and they’re consuming more," Funnell said.
He said that as economies in countries such as China and India grow, and disposable incomes rose, food inflation would take root.
“Inflation is part and parcel of the future and the challenge really for the world (soft commodity) market is extreme volatility and price spikes, which will mean that the market needs to incentivise producers to make more.”
Funnell said it takes time to produce food, with the growth period for sugar production, for example, lasting 12-18 months, and yet people want price stability. “We’re going to have an inflationary environment for food price until producers catch up,” he said.
Funnell said regulators, faced with anger from food importers struggling to manage risks, could introduce measures to calm price volatility.
"New regulations could be brought into place, for example in the sugar market specifically, to produce reasonability limits to prevent some of these enormous price swings,” he said. “The importance of putting these regulatory changes in place is paramount to ensure the proper liquidity and volatility in the sugar market.”
Funnell said that big swings in futures markets, with sugar futures sometimes moving $100 a tonne in a day, made it much harder for food importers to guarantee margins.
"The challenge is for importers to make that margin and not be badly priced in a market that is this volatile. The volatility is what causes them their main concern.”
Source:
http://www.emirates247.com/news/world/food-inflation-to-continue-fund-manager-2011-02-21-1.358850
Speaking on the sidelines of the Kingsman Dubai sugar conference, Funnell said in an interview with Reuters Insider television that sugar importers were struggling to make margins due to high price volatility, and that in his view regulators may move to set “reasonability limits” to calm price swings.
ICE March sugar hit a contract high of 36.08 cents a lb on February 2, the highest price level in three decades. Food price inflation has surged up the political agenda globally after sharp rises in prices of grains and soft commodities, including sugar, coffee and cocoa.
Recent swings in futures markets such as sugar, driven in part by computer-generated trading, have complicated pricing even further. “The bad news for the consumer is that it (food inflation) is probably going to continue, and the reason is that there are more people, and people are moving from agricultural areas to industrial areas, and they’re consuming more," Funnell said.
He said that as economies in countries such as China and India grow, and disposable incomes rose, food inflation would take root.
“Inflation is part and parcel of the future and the challenge really for the world (soft commodity) market is extreme volatility and price spikes, which will mean that the market needs to incentivise producers to make more.”
Funnell said it takes time to produce food, with the growth period for sugar production, for example, lasting 12-18 months, and yet people want price stability. “We’re going to have an inflationary environment for food price until producers catch up,” he said.
Funnell said regulators, faced with anger from food importers struggling to manage risks, could introduce measures to calm price volatility.
"New regulations could be brought into place, for example in the sugar market specifically, to produce reasonability limits to prevent some of these enormous price swings,” he said. “The importance of putting these regulatory changes in place is paramount to ensure the proper liquidity and volatility in the sugar market.”
Funnell said that big swings in futures markets, with sugar futures sometimes moving $100 a tonne in a day, made it much harder for food importers to guarantee margins.
"The challenge is for importers to make that margin and not be badly priced in a market that is this volatile. The volatility is what causes them their main concern.”
Source:
http://www.emirates247.com/news/world/food-inflation-to-continue-fund-manager-2011-02-21-1.358850
Ivory Coast: 40% of world’s cocoa under threat of destruction
Coffee and cocoa producers in the Ivory Coast Thursday morning torched several bags of cocoa in front of the European Union headquarters at Plateau, the business district of the capital, Abidjan. This follows a ban on coffee and cocoa exports from Côte d’Ivoire. The export freeze was imposed by Alassane Ouattara to force his rival, Laurent Gbagbo, to cede power.
A dozen cocoa bags filled to capacity were set ablaze Thursday morning in front of the European Union offices in Abidjan. Headed by Bléhoué, a so-called Chairman of industry Elders, coffee and cocoa producers expressed their frustration over the decision which they say does not work in their favor.
The group have threatened to destroy all their stocks of coffee and cocoa from last season’s harvest instead of leaving them to "rot" in the warehouses following an export freeze decreed by Dr. Alassane Ouattara.
Following the ban on exports of coffee and cocoa by Alassane Ouattarra, who was proclaimed winner of the November 28, 2010, presidential elections by the Independent Electoral Commission and recognized by the international community, multinational companies have frozen their purchases whilst the European Union has moved to put an embargo on exports. The latter has also asked European ships not to dock in the country’s main ports of Abidjan and San Pedro.
Three days ago, the producers had asked the European Union to lift the sanctions arguing that the post-election crisis was not the fault of coffee and cocoa growers.
"If they don’t want it, the Chinese will come and get it… we are fed up with the European Union." The protesting cocoa and coffee producers want the European Union to have the ban lifted by next week or else they would dump all their cocoa beans in front of the European institution’s offices.
But, contradicting his earlier arguments over the risk of "rot", Sansan Kouao, coffee and cocoa producer and longtime friend of President Laurent Gbagbo, said that "We do not have any problems in the bush. It can be stored (the cocoa beans) for a year or two, it does not bother us."
In a recent interview with the Financial Times, Alassane Ouattarra had declared that "Cocoa can be stored for a long time. Clearly Mr Gbagbo will be out well before the cocoa starts getting rotten".
Consequences of a longterm embargo
Hard times call for hard measures, and some farmers in dire need need to sell their produce are finding other ways to escape the embargo, albeit at a reduced price.
But others have expressed worry over the future of their produce with some saying they prefer burning them to ashes rather than selling their cocoa and coffee beans for paltry sums.
"I will burn my produce. Because I can’t fathom selling my produce for paltry sums considering all the hard work I put into it," said Zabi Youan, Bahoulifla, a farmer from Vavoua.
Agriculture has been the backbone of the Ivorian wealth. And coffee and cocoa, which occupy a center stage of the economy, generate about 40 per cent of the country’s export earnings.
On the international scene, 40 per cent of global cocoa supplies, valued at $4.5 billion a year at current prices, comes from the Côte d’Ivoire.
According to some industry experts, whilst an embargo could spell a long-term disaster for the country’s economic and social development, it could also be beneficial to farmers, in that prices could be increased after the lifting of the embargo as there would be a high demand for good quality Ivorian cocoa beans on the market.
As the West African country awaits a crucial decision from a panel of heads of state of the African Union after findings on the post-election crisis, on 21 February, large quantities of the cocoa production is being shipped through Ghana, the world’s second biggest cocoa producer after Côte d’Ivoire. Some are also finding their way into Burkina Faso and Mali.
source: http://www.afrik-news.com/article18983.html
Coffee Farmer May Need 3 Years To Increase Supply, Linge Says
Coffee farmers may need two or three years to boost production, according to Ted Lingle, co-founder of the Coffee Quality Institute in Long Beach, California.
The increase will lead to lower prices, Lingle said in an interview at a coffee conference today in Arusha in northern Tanzania. Arabica coffee prices have jumped 8.8 percent this year because of crop damage in producing countries such as Colombia.
Prices will be supported this year with producer stockpiles at a record low of 13 million bags, Jose Sette, executive director of the International Coffee Organization, said.
“Until the end of this year the supply situation will remain tight and I don’t see much space for prices to go down significantly,” Sette said.
Producer stockpiles dropped after Colombia’s crop declined to 8 million bags, Sette said. Production was 12.5 million bags in 2007-08, according to the U.S. Department of Agriculture. A bag of coffee weighs 132 pounds (60 kilograms).
Source: Bloomberg
http://www.bloomberg.com/news/2011-02-17/coffee-farmers-may-need-3-years-to-increase-supply-lingle-says.html
The increase will lead to lower prices, Lingle said in an interview at a coffee conference today in Arusha in northern Tanzania. Arabica coffee prices have jumped 8.8 percent this year because of crop damage in producing countries such as Colombia.
Prices will be supported this year with producer stockpiles at a record low of 13 million bags, Jose Sette, executive director of the International Coffee Organization, said.
“Until the end of this year the supply situation will remain tight and I don’t see much space for prices to go down significantly,” Sette said.
Producer stockpiles dropped after Colombia’s crop declined to 8 million bags, Sette said. Production was 12.5 million bags in 2007-08, according to the U.S. Department of Agriculture. A bag of coffee weighs 132 pounds (60 kilograms).
Source: Bloomberg
http://www.bloomberg.com/news/2011-02-17/coffee-farmers-may-need-3-years-to-increase-supply-lingle-says.html
Japan To Buy Moree Coffee From Non Traditional African Markets
Japan plans to buy more coffee outside its traditional African markets in an effort to broaden cooperation with producers on the continent, the state-run Japan External Trade Organization said.
The world’s third-biggest economy wants to increase purchases from Uganda, Rwanda, Malawi and Cameroon, Toyokazu Fukuyama, an official at the organization known as Jetro, said in an interview at a coffee conference yesterday in Arusha, northern Tanzania.
Japan’s traditional sources of coffee on the continent are Ethiopia, Kenya and Tanzania, Fukuyama said. Brazil, Costa Rica and Jamaica are the country’s other main suppliers, he said.
“As part of cooperation with African countries we want to venture into new markets for coffee,” he said. “We have started and we want to build on the small level from these countries.”
Japan consumes 84,000 metric tons of coffee annually, with per capita consumption at 1.7 kilograms (3.75 pounds), according to the International Coffee Organization’s website. Africa accounts for 12 percent of global output of the beans, according to the InterAfrican Coffee Organization, which represents 25 of the continent’s largest producers.
Jetro started seminars for Japanese coffee buyers to promote non-traditional markets as a source of beans, though volumes of purchases have yet to be determined, Fukuyama said.
Source: Bloomberg
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