Brazil ups rates for subsidized farm machinery loan

* Small firms to pay 6.5 pct/yr; big companies, 8.7 pct

* Program seen as crucial to boost equipment sales

SAO PAULO, March 4 (Reuters) - A program of subsidized credit for new farm equipment set to expire in March was extended through year-end with higher interest rates, Brazil's state-run development bank BNDES said late on Thursday.

But despite the increase in rates, the farm equipment industry was optimistic that sales would be record in 2011. The Brazilian government is taking steps to slow credit growth and limit public expenses to try to curb inflation.

Rates for small and medium-sized companies rose to 6.5 percent a year, and to 8.7 percent for big companies, from 5.5 percent previously for all size firms, BNDES said.

However, they are still much lower than the central bank's benchmark interest rate, currently at 11.75 percent.

Known locally as PSI, the subsidized loan program was launched in 2009 to stimulate investments in the sector during the global financial crisis. It is seen as fundamental to supporting farm machinery sales.

High commodities prices and a bumper grains crop that should improve farmers' income this year will likely contribute to push sales of tractors and harvesters.

"This year we could top 2008's (record) 8.4 billion reais in sales," Jose Carlos Pedreira de Freitas, director of the farm equipment chamber at the association for the machinery industry Abimaq.

In 2010, sales totaled 7.5 billion reais, he said.

Abimaq's numbers do not include sales of big machinery. Makers of this kind of equipment had said in February they expected a year of "excellent" sales if the PSI was extended.

More than 80 percent of the sales of equipment accounted by Abimaq were made through the program in 2010, Freitas said.

source: https://portal.hpd.global.reuters.com/auth/login.aspx

US physical coffee: Colombian premium eases

* Colombian differentials ease

* Tight supplies continue to underpin prices

 The premium for Colombian coffee on thephysical market eased amid choppy activity as some sellers lowered their prices as seasonal roaster demand dipped, U.S. buyers said.

"(The differential) is all over the place. Sometimes there're no offersand then sometimes somebody gets real aggressive with offering," said one U.S. coffee importer.

Differentials on the physical market are currently priced either at a discount or a premium against ICE's benchmark March contract. 

The ICE Futures U.S. washed arabica contract for May arabica coffee futures was up 1.05 cents at $2.7580 per lb by 10:07 a.m. EST (1507  GMT), after earlier hitting a 34-year peak at $2.7920 per lb.
 

The differential for Colombian usual good quality (UGQ) coffee beans
was at an average of 41 cents over, compared with 47 cents over a week ago.
 

For Colombian European press (EP), the average premium fell to 42 cents  over, from 48 cents the previous week.
 

The premium eased after Colombian truckers halted a two-week strike on  Feb. 18 and as roaster demand eased. Colombia is the world's third-biggest  coffee exporter and the top grower of washed arabica beans.
 

Tight supplies of washed arabica beans continued to underpin the  futures market and keep the physical market tight, as Colombia went into its third straight year of significantly lower production due to adverse
weather and a rejuvenation program that has taken many trees out of  production.
 

May robustas trading on the London International Financial  Futures Exchange (Liffe) were up $15 at $2,397 per tonne by 10:07 a.m.
 

Differentials for the coffee contract in New York, ex-warehouse, were quoted as follows and reflect an average price from a range against ICE's
 

May arabica contract and the May robusta contract in London:

Differentials

Santos   4's                 - 6.0      cents under "C"
Santos  2/3 fc/ss         - 1.0      under "C"
Colombian ugq            +41.0    over "C"
Colombian ep              +42.0    over "C"
El Salvador                  +21.0   over "C"
Mexican fob Laredo    +15.0    over "C"
Mexican HG                +21.5    over "C"
Guatemala HB            +36.5     over "C"
Peru HBMC               +21.0     over "C"
Uganda Pmy Robs      +17.5     over LDN
Indonesia EK1            + 7.5      over LDN
Ecuador Ext Sup         -12.5     under "C"
Vietnamese grade  2    + 6.0    over LDN

source: https://portal.hpd.global.reuters.com/

Ethiopia's H1 exports increase but miss target

* Coffee, flowers, oil seeds miss target

* Gold overtakes oil seeds as 2nd largest export

Ethiopia's exports fell short of target in the first half of its fiscal year when coffee, oil seed and flower sales missed forecasts, trade data obtained by Reuters showed on Friday.

The Horn of Africa nation projects it will earn $3 billion in export revenue for 2010/11 (July-June) after a resurgence of coffee sales and diversification into new commodities earned $2 billion in the previous year.

Officials had set a goal of $1.29 billion in revenue for the first half of the financial year, but its earnings by the end of the period met 86 percent of that at $1.11 billion.

Coffee earnings in Africa's biggest exporter of the beans hit $320 million from the export of 95,102 tonnes, compared with a target of 105,793 tonnes, or $328 million in sales, according to the ministry of trade.

The country targets $939.5 million in coffee exports this year, nearly double the $528 million it earned during the 2009/2010 fiscal year.

Flower exports during the first half missed a target of $100.9 million, earning $76.5 million.

Investments into the sector have increased in recent years with incentives such as tax holidays, 35-year leases for land, and relatively low rates for renting land attracting increasing amounts of foreign businesses.

Exports of oil seeds also missed the target, hitting $102.8 million instead of $133.8 million for the period. Ethiopia is the world's fourth-largest sesame exporter after China, India and Myanmar.

GOLD OVERTAKES OIL SEEDS

Gold exports overtook oil seeds as the second largest source of revenue during the first six months with exports topping $179 million, exceeding a target of $158 million.

The country has made $450.5 million from about 48 tonnes of gold exports in the last 10 years, according to the central National Bank of Ethiopia.

Ethiopia's exports during the half-year period were also boosted by the rising sales of khat, a narcotic leaf popular in the region.

The commodity brought in $126 million in exports during the first six months of 2010/2011, beating a target of $119.6 million. Khat exports fetched $209 million the whole of last year.

source: https://portal.hpd.global.reuters.com/site/applist.aspx

Honduras ups GDP forecast as coffee prices climb

TEGUCIGALPA,Honduras on Friday raised its 2011 economic growth estimate to between 3.5 percent and 4 percent to reflect higher prices from coffee, one of the Central American nation's top exports.

The more upbeat forecast factors in "an extraordinary spike in international coffee prices," said Maria Mondragon, president of Honduras' central bank. The textile industry is also contributing to the improved view, she said.

Prior to the jump in coffee prices Honduras' government forecast gross domestic product growth of between 2.5 percent and 3.5 percent for this year.

Prices have risen after bad harvests in major production regions like Asia and South America hurt supply at a time of rising global demand.

Honduras' economy grew 2.6 percent in 2010, according to preliminary data, following a 2.1 percent contraction in 2009.

"I think that coffee will have a more important role in economic growth not only because of great prices but also thanks to production volumes and sales," Mondragon added.

Honduras, whose beans are traditionally thought of as lower in quality than those of neighbors like Guatemala or Costa Rica, is pushing to boost arabica coffee output and improve quality at the same time.

Coffee exports generated $722 million for Honduras last year, up from $531 million in 2009. 

Source: Reuters

UN warns Ivory Coast to Civil War

MARK COLVIN: While the world focuses on Libya, dangerous developments in other parts of the world risk going unnoticed. The United Nations is warning about the way things are going in Ivory Coast. Security forces there have shot dead seven women who were protesting against the president Laurent Gbagbo.

International election monitors agreed that Gbagbo lost the presidential elections in November but ever since he's been refusing to step down. The UN says at least 365 people have died in the power struggle between him and the apparent winner of the election, Alassane Ouattara.

In the latest killing, an attack on an all-women demonstration, witnesses say that as well as the seven dead, many more were wounded.

Barney Porter has the story.

BARNEY PORTER: Witnesses say the latest incident took place as women gathered at a roundabout in Abobo for a planned march to call on Gbagbo to step down.

WITNESS (translated): Our mothers went out to march peacefully, then we saw Gbagbo's tanks. They came and opened fire on the old women, killing at least six on the spot.

WITNESS 2 (translated): I was cooking outside and there was shooting several times and I could see the rockets passing over me. I decided to move my children and hide them in the house. I did not want anything bad happening to them.

BARNEY PORTER: Last November's poll was meant to reunify a country that's been divided since a civil war in 2002 but with Gbagbo's refusal to concede defeat, it's instead triggered a crisis. He's retained the loyalty of much of the security forces.

Ouattara, meanwhile, has the support of the international community but remains blockaded in an Abidjan hotel, protected by UN troops. Both men have set up their own governments, but neither are functioning properly and the economy is paralysed.

Thousands meanwhile have fled the fighting. Some have crossed into neighbouring Liberia. Others have looked for sanctuary within their own country. Mohamn Syella is a local priest. He says the escalating violence is creating state of fear among the residents.

MOHAMN SYELLA (translated): It has been terrible, gunfire during the night and also during the day. It's affected a lot of families. Some choose to move back to the villages very early in the morning.

BARNEY PORTER: Jacques Franquin is with the UN's refugee agency, the UNHCR. He says the situation has been deteriorating steadily since early December.

JACQUES FRANQUIN: We imagine the number at between 200 and 300,000 people that are displaced now in Abidjan only plus the situation in the west where we considered politically the war has started and bringing to a lot, a lot of people on the move, we're estimating the number as more than 100,000 right now.

BARNEY PORTER: The UN Security Council has been discussing the situation in Ivory Coast. Li Baodong is the current president of the Security Council.

LI BAODONG: The members of the Security Council remain deeply concerned about recent escalation of violence in Cote d'Ivoire, especially Abidjan following reported attacks on civilians, including women.

BARNEY PORTER: But that's not good enough for Youssoufou Bamba, an Ouattara loyalist and the Ivory Coast's Ambassador to the UN. He's asking for more international intervention and a stronger mandate for the UN peacekeepers already stationed in the country.

YOUSSOUFOU BAMBA: You recall two months ago I've warned about genocide. Today I will reiterate it the genocide in the making. They are killing people along ethnic lines. They are killing foreign, nationals from foreign countries, from neighbouring countries. They are killing people who are opposed to Mr Gbagbo. That not acceptable.

BARNEY PORTER: And that's also the view of this resident of Abidjan who's also an opponent of Laurent Gbagbo.

RESIDENT OF ABIDJAN: I really think that the international community should help us more than what they are doing. I mean, more than sanctions and words. If it's possibly to have military support to have Gbagbo, I think it is the solution because people are dying, no more banks, small business is closing. It's very difficult, it's very difficult.

source: http://www.abc.net.au/pm/content/2011/s3155672.htm

UPDATE 2-Indonesia Feb coffee exports jump, stockpile drawn down

* Exports nearly triple in Feb, exporters fullfil contracts
* Weather affects quality, harvest uncertain


Indonesia's robusta coffee shipments from the main growing areas in Sumatra island nearly tripled last month versus a year ago as exporters turned to inventories to fulfill old contracts, but concerns over harvests persisted.

Exporters shipped 17,504.98 tonnes in February, compared to 6,606.78 tonnes in the same month a year ago, trade data showed, with rising prices in London futures also prompting more sales from the world's second-largest robusta producer after Vietnam.

"Rallying coffee prices have prompted suppliers to sell their coffee stocks," said Azis Chan Satib, a spokesman at the Indonesia Coffee Association (AEKI).

Harvests in Sumatra usually start in March or April, but farmers have been picking cherries since January as the flowering season began earlier in some areas after the previous crop ended last August.

As a result, many exporters refused to sell forward shipment, preferring to sign nearby contracts to prevent defaults. Exporters in the main growing province of Lampung began to stock pile good-quality coffee last year, with beans estimated at more than 100,000 tonnes in late 2010.

AEKI expects Indonesian coffee bean production to fall by 30 percent this year from an estimated 600,000 tonnes in 2010, as rains in key producing areas damage cherries.

Unseasonal heavy rains cut output of many commodities in Indonesia last year or in early 2011, leaving coffee growers unable to take advantage of a rally in coffee prices that took London second-month robusta coffee futures up 57 percent in 2010 to end the year at $2,097 per tonne.

EXTENDED RAINS

The prolonged rains resulted in Indonesian exports falling 28 percent last year. The country's exports last year fell to 247,750.34 tonnes, from 342,844.25 tonnes in 2009.

Robusta, used in instant coffee, mostly grows in Lampung, Bengkulu, and South Sumatra provinces at the southern end of Sumatra island and accounts for about 85 percent of Indonesia's coffee production. The rest is higher value, aromatic arabica coffee.

Robusta has tracked rallies in premium arabica beans to levels not seen in more than 30 years to stand at around 278 U.S. cents a pound.

The jump in February exports surprised some dealers, although it also meant that inventories were being drawn down as the current harvest yielded many black, and mouldy beans.

"It is quite a surprise for me, because we tend to think the coffee harvesting progress is not going well due to the rainy season," said Ker Chung Yang, investment analyst at Phillip Futures in Singapore.

"This is likely to weigh on the coffee prices, especially robusta coffee, because this is a huge number. They (Indonesia) are likely to export more at the moment because they want to enjoy the higher coffee prices."

Indonesia competes with Vietnam, where stocks are falling given a faster shipping pace so far in the October 2010/September 2011 harvesting season while the volume of exportable beans may have fallen due to a higher ratio of small-sized beans, traders said.

Robusta prices in Vietnam's domestic market jumped to a record high in local currency terms on Tuesday to 46 million dong ($2,205) a tonne, but exporters still found it difficult to secure beans from growers who are holding back sales, traders said.
source: http://www.futurespros.com/news/futures-news/update-1-indonesia-sumatra-feb-robusta-coffee-bean-exports-almost-triple-1000008369

Uganda coffee exports fall for third straight month

KAMPALA (Reuters) - Uganda, Africa's second largest coffee producer, exported fewer beans for the third straight month in February compared with the same month last year due to drought, pests and diseases, an industry source said.

Industry insiders say the east African country's coffee output and its quality might fall in the next several months due to dry weather prevailing in Uganda, which primarily cultivates the robusta variety of the beans.

The commodity is a key source of foreign exchange for its economy, which is ranked the third biggest in east Africa.

The country exported 193,965 60-kg bags of the commodity in February, down from 264,373 bags a year ago, but higher than a previous forecast, the source at the Uganda Coffee Development Authority (UCDA) said.

"The rains were very inadequate during the early stages of the crop that has been under harvest in the last two months," the source told Reuters.

"Secondly, there are pests and diseases that have been attacking Robusta trees and both of these factors have had an adverse impact on yields this month compared to the February last year."

Sources at the UCDA had forecast the country would export 185,000 60-kg bags of the commodity in February.

Uganda earned $30 million from January coffee exports -- a leading source of foreign exchange income and employment in east Africa's third largest economy -- which fell by 18.6 percent to 215,180 60-kg bags compared with a year earlier, also due to unfavourable weather.

source: http://af.reuters.com/article/investingNews/idAFJOE72307Z20110304