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ASIC 2014

Coffee and Tea Reports from the Front Lines

Poor Farming Methods Hamper Coffee Yields

Africa – According to a report published in Business Daily Africa, the coffee industry is struggling with its full production potential because growers, especially the small-holders, are not embracing proper crop practices, a new study has revealed.

This situation has exposed the industry even to higher risks as diseases such as Coffee Berry Disease (CBD) and Coffee Leaf Rust (CLR), which continue to proliferate at alarming levels. The study falls under the second phase of the Kenya Coffee Data Collection and Information Dissemination Project over seen by the Trade and Industry ministry with support from the World Bank and managed by a leading consulting firm, Deloitte and Touche.

A notable finding from the research is that cases of CBD have been on the rise with prevalence rates climbing to about 36% against last year’s level of 30%— a trend analysts blamed on erratic weather patterns that have been experienced over the production season. Notable areas affected by the berry disease included Embu, Kirinyaga and Nyeri.

Researchers say a cold wet spell alternating with warm moist periods is likely to increase the threat of the berry disease even though protection measures such as spraying using Captafol and copper-based fungicides  could mitigate its effects. Producers in Kenya however have access to a special coffee hybrid known as the Ruiru 11 which is highly resistant to both CBD and CLR.

“Coffee Leaf Rust was also recorded in active state in virtually all coffee growing areas except Machakos and Makueni. The disease is apparently becoming a major factor and may constrain coffee production and quality it not contained,” the study report warned.

Researchers said lack of access to credit facilities has been the major drawback towards the implementation of sound husbandry practices but expressed optimism that the recently launched Coffee Development Fund (CoDF) could redress the constraint.

Overall the study estimates that the country will produce 54,000 metric tons of coffee in the 2007-08 crop season with small-holders and estates churning in 33,500 metric tons and 20,500 metric tons respectively.

Source: Comunicaffé International

Equal Exchange Brings Fair Trade To Small-Scale Tea Growers

United States - Seeking to catalyze changes in the tea industry, Equal Exchange announces today seven new premium, organic and Fair Trade Certified (TM) teas sourced from co-operative of small- scale growers. The launch is part of Equal Exchange's mission to combine quality and environmental sustainability with the greatest possible economic impact at the grassroots level.

Equal Exchange hopes to replicate the success they had promoting specialty coffee from small-farmer co-operatives in the 1980's and 90's. Currently both tea connoisseurs and traders are unaware of the role of small-scale farms and co-operatives in the tea industry.

Deepak Khandelwal, Equal Exchange Tea Product Manager, explains, "These farmers have long grown excellent tea, but until this point no one was paying attention, not even in the Fair Trade category. We hope they'll now get the recognition they deserve along with greater bargaining power in the marketplace."

To raise the profile of small-scale tea growers, Equal Exchange is launching seven new teas. Equal Exchange, is a pioneer and market leader in Fair Trade since 1986, offers a variety of high quality, organic tea, coffee, cocoa and chocolate.

Major customers include Kroger, Shaw's, Whole Foods (in some regions), Ten Thousand Villages, as well as hundreds of natural food stores and restaurants nationwide. 100% of Equal Exchange products are fairly traded, benefiting 40 small farmer co-operatives around the world. Equal Exchange is a worker co- operative, owned and democratically controlled by its employees.

Brazil - Coffee Exports Reach US$ 3.7 billion in the Last Crop Year

Brazil – According to statistics from the Brazilian Coffee Exporter Council (CeCafé), Brazilian coffee exports yielded US$ 3.7 billion in the 2006-07 crop year, which ended in June, a 27.8% increase compared with the 2005-06 crop year. Shipments totaled 29.2 million 60 kilogram bags of coffee, an increase of 19.1%.

In the month of June alone, foreign sales of coffee totaled US$ 275.44 million, an increase of 32.5% over the same month last year. The amount shipped was slightly more than 2 million bags, an increase of 16.9%. From January until June, 13.5 million bags were exported, 16.2% more than in the first half of 2006, generating revenues of US$ 1.81 billion, an increase of 28.8%. Germany continues to be the main destination for Brazilian coffee, followed by the United States and Italy.

Coffee Look up to Better Times as Global Prices Continue to Recover

Africa — A recent report shows prices that the coffee commodity remained firm during the month of June in most major markets-a trend that is expected to carry on beyond this month even though nations producing Robusta coffee producing nations such as Uganda stilled enjoyed better price runs from the brand on demand.

The Robusta market segment has been suffering from short supplies of quality beans used in blends by roasters hence the impressive rally in prices.

Growers from Vietnam have notably fuelled the rosy price run by Robustas through steady supplies of inferior crop even though their government is moving on to stem the trend amid uproar from players in the industry.

Arabica producing nations such as Kenya have on the other hand been facing depressed pricing for more than four months due to suspected market speculation and huge supply offers into leading markets by growers in Brazil.

Not even recent adjustments to the Brazilian stock estimates for the current 2007-08 crop season seems to have impacted much on the market price behavior on a short term.

Analysts had predicted that the market would have a slight shake up when Brazil down scaled its crop estimates for the season but that didn’t happen because of a weighty 16.5% in the overall global export volumes for the first eight months of the 2006-07 which amounted to 65.87 million bags compared to the previous year.

Things are however beginning to look brighter for the entire industry in terms of pricing with the ICO predicting steadier returns for farmers in the coming months.

“All four groups of coffee recorded price increases compared to their May levels. It is worth noting the particular situation of Robusta prices, which continue to maintain a firm upward trend, reducing the differential with other mild Arabicas by 41.3% in relation to January,” the ICO said in a market report.

ICO executive director Mr Néstor Osorio said the organization’s average monthly price indicator clocked 107.03 cents per lb last month representing an increase of 6.93% compared to its May levels.

These indications for improved times are further supported by the fact that Brazil, which is the world’s largest producer of the commodity expects it production to fall by 32% compared to the 2006-07 crop season.

The South American nation projects to produce 32.1 million bags this season, comprising 22.3 million bags of Arabica and 9.8 million of Robusta — a situation that would ease supply pressure on key international markets and pull up prices.

Overall, ICO expects a global output of 112 million bags of coffee for the 2007-08 coffee season compared to some 121.6 million bags from the last crop season 2006-07. Statistics from the organization showed production of Arabica coffee in Kenya has risen by about 20 per cent between 2005 and last year — a trend that could be attributed to ongoing reforms in the industry aimed at restoring its prospects after years of rot due to mismanagement. Kenya is a member of the ICO. In Kenya, pressure of poor pricing has pushed players in the industry to adopt a supply quota system to the weekly auction in Nairobi in bid to firm their earnings.

An analysis of the system adopted about three months ago however showed minimal adjustments to prices-taking cue of the dull international markets also subdued to weakened price offers on excess supplies being turned in for trade.

Meanwhile, coffee producers have a fresh impetus to up their trade as the global consumption continued to rise over the years with the ICO pegging the trend on a dynamic demand especially in new EU member countries.

It is estimated that the world consumption of coffee has increased to approximately 118.76 million bags by 2006 compared to four years ago, representing a growth of 1.42% per annum.

Osorio predicted that the world consumption of coffee could this year reach 120 million bags-meaning additional market for growers.



Tea & Coffee - August, 2007
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