Coffee Round Up-q4-09

Wolf Farms wins

Hawaii

The winner of the 2009 Kona Coffee Classic Cupping Competition held this year at Keauhou Beach Resort on the Big Island of Hawaii is Wolf Farms, a four acre plantation situated at an altitude of 1,400ft in Honaunau.

The farm is owned and operated by Mark and Denise Wolf. Wolf Farms beat out 60 competitors in this year’s contest. Hawaiian King Coffee in Holualoa, owned by Christopher Kim, garnered second place, Healani Farms took third.

"The balance and pleasing aftertaste made this Kona coffee the obvious winner," according to judge John King. "The overwhelming final fragrance was the tipping factor."

Producers nationalized

Venezuela

The government of maverick president Hugo Chavez has announced the nationalization of two domestic coffee companies, Fama de America and Cafea, according to the state-run Bolivarian News Agency. A presidential decree ordered the government takeover of the two companies which between them control around 80% of the country’s domestic coffee market. The government is also looking to buy a controling stake in a third company, Cafe Madrid.

The government claims that the companies have acted as a monopoly, avoiding price controls by smuggling coffee into neighboring Colombia.

The government had previously taken control of both companies temporarily in August during its ongoing investigation into coffee smuggling charges. Both companies deny any involvement in illegal activities.

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Output drops 30%

Colombia

Colombia’s coffee crop is expected to drop by 30% in 2009 and output is not expected to recover until at least 2011, according to Mauricio Bernal of the Association of Colombian coffee national

Estimates place this year’s crop at between 8 to 9 million bags, down from 11.5 million bags in 2008.

"Colombia does not have a good coffee harvest" Bernal is quoted as saying.

Heavy rains in Brazil and Colombia have hit production and supplies have been compromised, leading to a 24% increase in prices paid.

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US$7.8 mln lost

Philippines

Severe flooding and landslides caused by Typhoon Pepeng in the Cordillera Administrative Region (CAR) and Northern Luzon have cost coffee farmers around Php350 million (US$7.38 million), according to Valentino Macanes, an associate professor and director of the Institute of Highland Farming Systems and Agroforestry with the Benguet State University (BSU) in La Trinidad, Benguet.

Macanes announced his findings at the second Coffee Summit sponsored by the Philippine Coffee Board (PCB) recently.

He said that Benguet province suffered worst, estimating losses to be around Php109.57 million, but losses in Northern Luzon and the CAR which have yet to be accurately assessed due to the difficult terrain and poor communications, could be even higher.

Typhoons spare coffee

200,000 ton MOU

Vietnam

Vietnamese coffee exporter Intimex has agreed to sell up to 18% of Vietnam’s 2009/2010 coffee harvest, or approximately 200,000 tons, to international trading companies Armajaro and Louis Dreyfus. The move is intended to help finance the company’s purchases from farmers.

Under the terms of a memorandum of understanding it signed with Armajaro, Intimex is understood to have committed to sell 100,000 tons of coffee from September 2010.

The company has also reportedly signed a contract agreeing to 100,000 tons of coffee with a US$140 million value to Louis Dreyfus.

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Minimum support price

Nepal

Farmers and traders in this Himalayan nation have agreed to maintain a minimum support price for coffee due to the ongoing financial crisis and high input costs.

The agreement was decided on by coffee farmers and traders at a recent meeting held in the presence of Ministry of Agriculture and Cooperatives (MAC) and Nepal Tea and Coffee Development Board (NTCBD) representatives

According to Binaya Mishra, executive director of NTCDB, quoted in local newpapers, fresh cherry and parched coffee has been fixed at Rs27 and Rs142/kg respectively (US$0.37 and US$1.93). Dry cherry in categories A, B and C have been priced at Rs80, Rs55 and Rs20/kg respectively.

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Lavazza in Chennai

India

Italian coffee roaster Lavazza sees India as the perfect base from which to expand its operations throughout the Asia-Pacific region, despite less-than hoped for returns from its purchase of theBarista coffee shop chain.

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Peet’s buys Diedrich

US

Diedrich Coffee Inc, the Irvine, USA-based coffee roaster and distributor, has announced that it is to be bought by by Peet’s Coffee & Tea Inc. in a deal estimated to be worth around US$213 million in cash and stock.

Peet’s, based in Emeryville, California, offered the equivalent of US$26 for each Diedrich share, or 28% more than the last closing price of US$20.36.

Peet’s is expected to see gains in its wholesale business once the deal completes, and the company has announced thast it expects to triple sales of its coffee beans to US grocery stores by 2014.

"The Diedrich acquisition represents another major strategic growth initiative for our consumer packaged coffee business," said Patrick O’Dea, Peet’s chief executive.