Poor Farmer

By Thomas Kutty Abraham Bloomberg October 29, 2010 Global coffee supplies may tighten after an Indian exporters’ group forecast a delay in harvesting because of extended rains and an industry association in Vietnam said that production may decline, potentially boosting prices. India’s harvest may begin from the middle of November, about three weeks later than normal, Ramesh Rajah, president of the Coffee Exporters Association of India, said in an interview. Separately, Nguyen Van An, a board member of the Vietnam Coffee and Cocoa Association, said today by phone that output may drop as much as 3 percent to 1.1 million metric tons in 2010-2011. The forecasts may extend rallies in arabica, which jumped to a 13-year high this week, and robusta, at the highest in more than two years. Prices have jumped on concerns that unfavorable weather in Latin America and Vietnam, and delays at Brazil’s Santos Port are curbing supplies. Vietnam is the biggest robusta producer and India is Asia...

Coffee Futures Jump to 13-Year High in N.Y. on Supply Concern By Debarati Roy Bloomberg October 26, 2010 Coffee futures rallied to a 13-year high in New York on concern that global supply will be tight. Output from the next crop in Brazil, the world’s biggest producer, may drop to 36 million bags, the lowest in four years after a drought hindered flowering, the nation’s coffee council said on Oct. 22. Costa Rica lowered its output estimate by 3.5 percent for the season that began this month, Reuters reported, citing the head of the coffee association. “First Brazil and now Costa Rica, everyone is lowering their estimates,” said Tom Mikulski, a senior market strategist at Lind-Waldock, a broker in Chicago. “People are concerned about the supply of better-quality coffee.” Arabica coffee for December delivery gained 0.7 cent, or 0.3 percent, to $2.012 a pound at 11:56 a.m. on ICE Futures U.S. in New York. Earlier, the commodity rose to $2.046, the highest level since August ...

Spread Of Pest Threatens Coffee Crops By Jill Kuramoto KITV 4 News October 25, 2010 KONA, Hawaii -- The state is preparing to move ahead with a quarantine as an "emergency administrative rule" to keep the tiny coffee berry borer from spreading to other islands. The coffee berry borer is a tiny beetle, smaller than the size of a sesame seed. It gets its name by how it bores into the coffee bean to lay its eggs. The coffee berry borer beetle lays its eggs in the coffee "cherry" that contains the bean. The larvae feed on the coffee bean and reduce the bean's size and quality, agriculture officials said. State agriculture officials have found 21 areas in South Kona that have been infested by the bug and deemed a quarantine is necessary to keep it from spreading. The quarantine would require green, non-roasted coffee beans to be treated with heat or insecticide before they're shipped off the island. A meeting held last week on the issue on the ...

Caffeinated Coffee Futures Cash prices have outpaced futures gains in recent years. That situation is starting to change as stockpiles dwindle. Link : DJ-AIG Commodity Indexes By Anna Raff The Wall Street Journal October 23, 2010 AFTER YEARS OF SHRUGGING off the global shortage of quality beans, coffee futures are finally perking up, a change from recent years. Back in 2008, Colombia had one of its worst harvests in decades, prices on the cash market were surging, but futures mysteriously fell. Earlier this month it was revealed that there were worries about the quality of coffee stored in exchange-certified inventories. These concerns emerged during a disagreement about the inclusion of Brazil into the club of countries whose beans can be accepted into the stockpiles. No one—meaning no roasters, the natural buyers of green, or raw, coffee—wanted to take delivery of the coffee in stockpiles, market participants say, and it's this aversion that led to the distortion in ...

By Adam Cancryn The Wall Street Journal October 21, 2010 Coffee futures broke through the $2-a-pound level for the first time in 13 years as concerns about weather exacerbated a scramble to secure supplies. A shortage of arabica beans, desired for their mild taste, has been evident in global markets for years, and futures are now catching up with the high prices that have prevailed at South and Central America's shipping ports. Arabica coffee for December delivery hit a high of $2.0315 a pound on ICE Futures U.S. during intraday trading on Thursday. That is up 6.4 cents, or 3.3%, on the day, and the highest point since Sept. 18, 1997. Prices have been climbing since June as heavy rains brought on by a string of Caribbean storms dampened optimistic output forecasts released earlier this year. The wet weather cut into yields and diminished the quality of the region's existing beans. "It's a scarcity issue that continues to get worse," said Shawn Hackett...

Photo: Courtesy of Reuters via WSJ Coffee Traders Support Proposal to Add Country's Beans to Benchmark Contract By Anna Raff The Wall Street Journal October 14, 2010 Coffee traders backed a controversial plan to allow Brazil into the club of grower nations whose beans underpin world prices. The board of the IntercontinentalExchange Inc. now needs to sign off on the plan, which would bundle Brazil's arabica beans with coffee from 19 other nations, including Colombia and Kenya. Approval would mean that whenever a buyer of a futures contract on the exchange decides to take delivery of coffee, some of those beans may be Brazilian. By expanding supply, it may lead exchange coffee prices to fall. The proposal has been controversial, and has failed to gain traction several times over the past few years, because Brazil's beans are considered inferior to those of other growers. They don't go through the rigorous washing process that others do. But Brazil's bea...

* Brazil has been wanting to sell to ICE for years * Guatemala, Colombia oppose Brazil's to be deliverable * Final decision to accept sits with board of ICE (Recasts and adds details, comment from ICE) Reuters October 14, 2010 NEW YORK - Brazil, the world's top coffee producer, took a step this week toward its goal of selling higher-quality coffee beans to ICE Futures U.S. for inclusion in the world's benchmark coffee futures contract. The ICE Coffee Committee recommended to the exchange on Wednesday that it should allow washed and semi-washed coffee produced in Brazil to be delivered to the ICE Futures U.S. (ICE.N) "C" contract, the global benchmark. The recommendation follows a proposal placed under consideration in May. Brazil's coffee industry has pushed for years for this opportunity, which will provide the country with another selling opportunity. But coffee groups in other producing nations including Colombia and Guatemala oppose the idea....

Note : For background information and to learn about the difference between the cash market and the futures market, visit: Coffee Trade 101: Cash Market vs. Futures Market   - Wondwossen --- Dissent is brewing in the coffee market. By Anna Raff The Wall Street Journal October 13, 2010 Market participants say the benchmark futures contract for the arabica variety doesn't reflect real-world prices, pointing to aging coffee beans counted in stockpiles but seen as unfit for the drinks and roasted beans widely consumed in North America. This leaves big coffee distributors and cafe owners in a bind: With futures lagging the current market price of coffee, roasters are unable to adequately hedge their costs and compensate for sharp price swings. This means surging prices for the beans will trickle down more quickly. With successive crop failures in Colombia and Central America, the surge in cash prices has outpaced increases in the price of IntercontinentalExchange Inc....

Seeks Public Comment on Changes that Would Update Guides and Make Them Easier to Use FTC Released on October 06, 2010 Published here on October 13, 2010 The Federal Trade Commission today proposed revisions to the guidance that it gives marketers to help them avoid making misleading environmental claims. The proposed changes are designed to update the Guides and make them easier for companies to understand and use. The changes to the “Green Guides” include new guidance on marketers’ use of product certifications and seals of approval, “renewable energy” claims, “renewable materials” claims, and “carbon offset” claims. The FTC is seeking public comments on the proposed changes until December 10, 2010, after which it will decide which changes to make final. “In recent years, businesses have increasingly used ‘green’ marketing to capture consumers’ attention and move Americans toward a more environmentally friendly future. But what companies think green claims mean and what co...

Green Mountain Rises 7.2%, Most in Month, on Nestle Speculation By Ian Thomson Bloomberg October 12, 2010 Green Mountain Coffee Roasters Inc., the seller of Keurig single-cup brewers, rose the most in a month in U.S. trading on speculation the company may be a target of Nestle SA, the world’s largest food company. Green Mountain climbed $1.94, or 7.2 percent, to $28.81 at 4:30 p.m. New York time on the Nasdaq Stock Market. The shares have dropped 23 percent since Sept. 27, the day before the U.S. Securities and Exchange Commission said it was investigating accounting errors at the company. Speculation that Nestle would begin a takeover bid for Green Mountain has also moved the stock in the past, Scott Van Winkle, an analyst in Boston with Canaccord Genuity Inc., said in a telephone interview. “Nestle has had enormous success with automated espresso in Europe and they can’t replicate that in the U.S.,” said Van Winkle, who has a $40 price target for Green Mountain. “Keurig is t...

Chemusto, shows UCDA officials the effect of the leaf rust disease (Photo: Courtesy of The New Vision) By Ronald Kalyango Reuters via The New Vision October 10, 2010 COFFEE farmers in Bugisu sub-region, affected by the leaf rust and coffee berry diseases have asked the Government to save them. “If the Government does not intervene now, we shall not export any crop next year. This is our top income-earner,” said Wilson Chemusto, a farmer in Kapchorwa district. Chemusto was on Friday briefing officials from the Uganda Coffee Development Authority, led by Henry Ngabirano, the managing director, during a field tour of the affected gardens in the district. “We are looking for solutions to save the country’s coffee sector,” said Ngabirano. Leaf rust, which farmers said broke out in June, has spread throughout Mbale, Sironko, Bududa, Kapchorwa, Bulambuli, Kwen and Manafwa districts. It mainly affects coffee leaves, turning them into pale-yellow on the surface and orange beneat...

By David Suzuki Winnipeg Free Press October 06, 2010 Coffee is the second most traded commodity in the world, after oil. And as with oil, the massive scale of production necessary to meet our insatiable demand for coffee results in an enormous ecological footprint. According the UN Food and Agriculture Organization, more than seven million tonnes of coffee will be produced worldwide this year. The thirst for coffee is growing rapidly in developing countries, like Indonesia, where coffee beans are grown and exported. And while citizens of wealthier nations are cutting their coffee consumption, people in Africa and South America are drinking more - thanks to increasing household incomes, population growth, changing tastes, and successful marketing. The U.S.-based Starbucks coffee chain has even announced that it will open a shop in post-conflict Algeria, with plans to expand to 30 stores in Africa over the next two years. With so many people drinking coffee (63 per cent of Cana...

Exporters are saying the Nairobi auction is offering quicker sales and better prices as the goal of direct sales proves difficult. Photo/REUTERS via Business Daily By George Omondi Business Daily October 4, 2010 International commodity brokers have limited the direct sale of coffee introduced three years ago. Many exporters have preferred to operate from the weekly auction, saying they had been met by an intricate web of intermediaries in the quest to penetrate the international markets. The Nairobi Coffee Exchange (NCE) offers quicker sales, they said. “Direct sales remains a great idea but players who have tried it realised that the auction’s transparent price discovery system often yields better value for their produce,” said the Sasini Ltd manager, Dr Ceaser Mwangi. Under the central auction system, which operates on a willing-buyer-willing-seller terms, Dr Mwangi said the buyer who places bids has a ready market for the quantity demanded. Local industry players, ...