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Coffee and Tea Reports from the Front Lines

Coffee-Growers - Victims of Fair Trade Pricing

Canada - According to a recent report published on CanWest News Service, the minimum price paid to fair trade coffee-growers hasn't changed in 10 years. “It's like not taking a raise in 10 years,” said Monika Firl, producer relations manager for Cooperative Coffees — a group of 22 small coffee roasters in Canada and the U.S. who import only organic fair trade coffees. "The benefits of fair trade, you want to make sure it's primarily in favor of the producers themselves. That's what this is all about."

While Fair trade coffee sales in Canada have risen an average of 52% a year since 2002, growers have not had an increase in 10 years. "Everything is slower than it should be," said Robert Clarke, executive director of Transfair Canada, which certifies Canadian businesses that sell fair trade products.

Coffee producers are assured a minimum price —$1.19/lb. of Arabica coffee beans or $1.21 depending on what part of the world the coffee is grown — even when the volatile market price drops below that, as it has for most of the past seven years. “I wish it was $20 a lb.," said Clarke, who considered unilaterally offering a higher price, but was told that wouldn't show unity with Fairtrade Labelling Organizations International (FLO), which monitors and certifies the coffee-growing coops to which farmers belong, as well as sets the minimum price. Transfair Canada is one of 20 FLO members along with three producer groups representing Africa, Asia and Caribbean/Latin America.

The Caribbean/Latin American group proposed a nominal increase in the minimum price last year. Canada and other countries supported the increase, but FLO said it wanted to overhaul the entire process for evaluating how and when minimum prices are set for all fair trade products, not just coffee, Clarke said. FLO also wanted to consult with the African and Asian groups.

FLO's answer on a price increase is expected in early October during its annual meeting in Bonn, Germany. “In my eyes, it shouldn't impact the consumer," he said, citing the example of VIA Rail, which moved last year to offer only fair trade certified coffee. The per cup increase in price would have been only 1.2¢, so the company opted not to charge consumers more. "The demand will hopefully drive down the pricing," Clarke said, acknowledging that some retailers will probably try to raise prices.

Fair trade coffee pricing is complicated. On top of the minimum price, coffee growers receive a social premium — increased in June from five to 10 ¢/lb. — that helps communities build schools, health centers and other improvements. An organic premium — increased from 15 to 20¢­ is paid to organic coffee growers since their costs are higher.

Meanwhile, Cooperative Coffees — which includes five Canadian coffee roasters in Toronto, Whitehorse, Chicoutimi, Montreal and Almonte, Ontario went ahead two years ago to increase the minimum price they pay for their coffee. Subsequent increases mean they now pay US$1.56 (including the two premiums) and propose increasing that to $1.61 at its annual meeting in two weeks.

“It ultimately didn't affect our price (to consumers),” explained Craig Hall, president of Equator Coffee in Almonte. Although the cooperative pays more for coffee, it also eliminates the middleman by dealing directly with coffee producers.

Another Move Towards Better Quality Tea

Colombo - The Plantation Industries Ministry will introduce new regulations to raise the quality of green tea leaves. The new regulations were formed by the Ministry on the directions of Plantation Industries Minister D. M. Jayaratna.

The decision to formulate new regulations, to enhance the quality of young tea leaves, was taken after considering that 30% of the leaves get destroyed during transport. The leaves get ruined from the point they are plucked and loaded into lorries and are hauled up to tea factories, said ministry sources. Minister Jayaratna had instructed the Ministry Secretary, J. Abeywickrema to introduce new methods to minimize the damage caused to tea leaves.

Meanwhile, sources at the Sri Lanka Tea Board said, their Chairman had been asked by the minister to step up action to amend all acts dealing with tealeaf protection and enhancement of quality.

Moves are under way to raise the quality of young tealeaves under the Tea Control Act, said the sources. The new regulations are expected to raise the quantity of quality tea by 70%. It is expected to reduce the destruction caused to tealeaves during transport, from the present 30% to 10%.

Scramble for Quality Drives Coffee Price Rally

Africa - Coffee prices hit a record high this year at a recent weekly auction at the Nairobi Coffee Exchange (NCE), triggered by a scramble for the few available quality offers and steady prices in the international market.

Taking a cue from a record rally during last week's sale, the price of a 50kg bag of coffee hit $129.82 mark (Sh9,087, an improvement of about $2 (Sh140) over the previous sale where prices broke a seven-month barrier. Market analysts said a scramble for the few available quality offers and steadier prices in key international markets triggered yesterday's rally. “The recent cold spell over most producing regions affected the development of berries resulting into suppressed offers coming through for trading,” Daniel Mbithi an official at the NCE told Business Daily moments after trading closed.

Cases of Coffee Berry Disease (CBD) were also witnessed in several producing areas, effectively pulling down production volumes. “The prevalent weather favored the proliferation of Coffee Berry Disease resulting in huge late crop losses. During the survey, crop loss of up to 80% was recorded in the traditional coffee variety dominated farms in upper zones of Embu, Kirinyaga and Nyeri," experts from the Ruiru based Coffee Research Foundation (CRF) said in a recent report on production prospects.

CRF citing the disease incident and cold spell revised the 2007 crop estimate from 53,214 metric tons to 48,710 tons — explaining the current slow turn out of offers to the auction. Besides this suppression in the lot of offers, a steady enquiry for quality Kenyan coffee from dealers abroad also fuelled the price rally yesterday.

“We had a lot of interest from overseas buyers seeking for good coffee from the country...the demand for the commodity is generally high world over at the moment because of a dry spell in Brazil which has greatly influenced pricing in key global markets where prices have climbed nearly 8% this week,” said Dirk Sickmueller of Taylor Winch Coffee Limited.

During yesterday's auction about 14,434 bags of coffee were on offer down from the previous' sales of 17,072 bags, a development that explained the huge scramble for the available volumes. Top grade AA fetched $254-$167 while another premium grade AB was going out for $185-$145 per 50-kg bag.

This performance is expected to firm confidence in the industry that has been shaky since the start of the year amid mixed performances in earning. The discontent over earning at one time nearly spilled over as players sunk into blame games over alleged price fixing by some marketers.

Drinking Tea May Help Prevent Diseases

Canada - New scientific research suggests that drinking tea may lower an individual’s risk of developing dementia and other neurodegenerative disorders such as Parkinson’s’ and Alzheimer’s. This data and other new research suggests that drinking tea may improve and maintain brain health and function and even help us think more clearly were recently presented at the Fourth International Scientific Symposium on Tea & Human Health in Washington, D.C. The Symposium is a forum for leading global scientists to gather and share their latest research findings. “This new data adds to the growing evidence which shows that diet influences the likelihood and risk of an individual experiencing cognitive decline or dementia, including Alzheimer’s Disease, with aging,” said Canadian tea and health expert Dr. Carol Greenwood.

The body of research presented at the Symposium suggests tea may help maintain and improve brain health both directly and indirectly, said Dr. Greenwood, a Professor of Nutritional Sciences at the University of Toronto, a Senior Scientist at Baycrest in Toronto, and a leading authority on the relationship between diet and cognition. “The research shows that tea likely directly impacts brain health by maintaining brain cell function and by assisting in the repair of damaged cells,” she said. “Drinking tea may further help because it reduces the risk of developing other disorders which increase the risk of cognitive decline and dementia.”

An animal study by Dr. Sylvia Mandel, of the Eve Top Center for Neurodegenerative Diseases in Israel, found that tea consumption helps maintain the health of neurons in the brain and improved their ability to combat stressors, said Dr. Greenwood. In the study, Dr. Mandel provided an amount of purified tea flavonoids equal to about two to four cups of Green Tea per day to animals with induced Parkinsonism as part of their diet to evaluate how their symptoms improved or progressed. She found that in animals that were fed Green Tea flavonoids, the polyphone appeared to prevent brain cells from dying, and showed improvements in reducing compounds that lead to lesions in the brains of animals with Alzheimer’s disease.

“Dr. Mandel’s work shows that tea may not only help prevent brain cells from dying, it appears that tea flavonoids may even rescue the neurons once they have been damaged, to help them repair,” said Dr. Greenwood.

Tea & Coffee - November, 2007

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