Poor Farmer

By Chris Mercer Beverage Daily May 29, 2007 Coffee processors and producers will have to wait another year for a new International Coffee Agreement after talks over the last week failed to make a breakthrough. Arguments and a lack of common ground between delegates from several countries are understood to have blighted discussions at the International Coffee Organisation (ICO) headquarters in London. It means the current Agreement will be extended for another year, putting back potentially important reforms that could help the coffee sector to address issues of sustainability, trade and emerging market consumption. An EU official told BeverageDaily.com in February that the end of May deadline for agreeing a new deal looked "too optimistic". Nestor Osorio, ICO executive director, had repeatedly insisted that talks were on track to replace the current agreement, which should have run out in September. On Friday, he admitted defeat. ICO members, which include the EU, US and m...

The negotiation between Starbucks and Ethiopia’s attorneys is continuing though at a slower pace. Starbucks is represented by its external lawyers – not by the company’s in house consul. That, in part, explains the reasons for their feet dragging, I think. Not many details are available from either side at the moment. It seems as though confidentiality is one of the preconditions for the negotiation. From the information I was able to gather, however, the outcome of the negotiation might be something different from what has been at the center of the public dispute. The two sides are apparently playing a give-take game. Starbucks is willing to recognize Ethiopia’s common Trade Mark rights but does not want to support its rights to administrative Trademark rights. Meaning, the company would not support Ethiopia’s application at the United States Patent and Trademark Office to register the marks, Harar, Sidamo, and Yirgacheffe. It looks like Ethiopia’s side is prepared to accept that comp...

By Joseph Olanyo The Monitor May 22, 2007 Ethiopia’s case should be treated as an eye opener for Uganda that intends to do business with Starbucks When Paul Sempa-Mugambwa, former proprietor of Kyagalanyi Coffee Ltd, received an offer for his firm way back in 1992 from a foreign investor, it did not look like an impending end to a whole generation of local coffee processing entrepreneurs. It was however only a matter of time before most of the indigenous coffee entrepreneurs gave in to pressure to sell their plants to cash draped foreign investors who, unknown to local entrepreneurs, had discovered a new niche in the international coffee market. Thus the unprecedented visit recently by officials from one of the largest global suppliers of specialty coffee - Starbucks Coffee Co. could hardly be a coincidence, according to analysts. "They want to start buying coffee from this region and they are looking at Uganda as part of a good quality coffee source," a coffee entrepreneur w...

Khat or Chat is a narcotic plant banned in the United States and most European counties. “Khat’s main psychoactive ingredients are cathinone, which is almost chemically identical to amphetamine, and the milder cathine (norpseudoephedrine). Cathinone prompts the release of the feel-good neurotransmitter dopamine, bringing lucidity, heightened alertness and euphoria.” - Niren Tolsi A growing demand for the leaf both locally and in neighboring countries is fuelling the business. The number of Ethiopian youths chewing khat has exponentially increased in the last two decades. As if to complement the need for more supply, the coffee crisis (1997-2003) led some coffee farmers to resort to growing khat. ----------- Keeping cool as a khat Niren Tolsi Mail & Guardian May 19, 2007 The buzz of an electric haircutter accompanies the comings and goings in one of downtown Durban’s derelict buildings. Men, mainly Ethiopian, come in for a haircut, others, to poke their heads through a door in the...

In a joint statement with Ethiopia, Starbucks announced earlier this month that they have agreed in principle to sign a licensing agreement. That was a big u-turn on the company’s position regarding Ethiopia’s efforts to trademark its famous coffee marks, Harar , Sidamo , and Yirgacheffe . Many people welcomed the decision though with optimism. At the moment, I was not sure what they meant by "agree in principle;" now, I am more eager to read a copy of the signed agreement. The company, seems to be busy spending more on the future. Understandably, the management wants to leave this story behind at any cost and move on. The discomfiture that other multinational companies, such as Nike, had faced in the past, after giving in to high-profile disputes, is the last ditch one would be willing to do what it takes and get over it. Albeit, typical of corporate giants, Starbucks is not going to spend a penny without a guaranteed stream of inflow of benefits to equate the associate...

By Todd Sullivan 24/7 Wall St May 17, 2007 There have been a slew of articles the past week about the price of Starbucks ( SBUX ) shares and whether or not now is the time to buy them. Let's look closer. Currently Starbucks shares trade at $28 for a PE ratio of 31 times this years 89 cents a share earnings estimate. Many people consider this a bargain saying "Starbucks shares have not traded at this level since Oct. 2005." But is Starbucks situation now the same as then? In a word, no . [ emphasis in the original ] If they hit their EPS growth goal, Starbucks will grow earning this years 18% vs the 30% they grew them in 2005 and as each day goes by, that "if" becomes larger and larger. A closer look at last quarters earning shed some light on upcoming difficulties. Earning were met chiefly due to an unusually large $500 million share buyback and enabled Starbucks to gloss over the fact that margins continue to deteriorate. This buyback become larger whe...

By Andrew Cawthorne Reuters May 17, 2007 ADDIS ABABA, May 17 (Reuters) - Ethiopian coffee exports are on course to rise about 2 percent to some 187,000 tonnes in the 2006/07 season, worth around $450 million, the head of the local exporters' association said on Thursday. "As I see from sales quantities so far, it will be a little bit higher than last year, around two percent," Abdulrezak Sherif, new chairman of the Ethiopian Coffee Exporters' Association, said at his office in Addis Ababa. "The market is better than last year. Prices have improved. There is more demand. Maybe we will this year reach $450 million, I think." Africa's largest coffee producer and the birthplace of the bean, Ethiopia exported 183,000 tonnes worth $427 million in 2005/06. Total annual coffee production, including that used for domestic consumption, was 330,000 tonnes last season, and Abdulrezak said the 2006/07 outturn would be similar. The chairman said he had taken over the ...