Weekly Coffee News

Climate Change And Food Security: Coffee Farmers In Tanzania Feel Strain Of Rising Temperatures, Unpredictable Rainfall

Hundreds of farmers in Tanzania are abandoning crops of coffee and cotton due to changes in the local climate. Instead, they’re planting more lucrative vegetables and flowers as temperatures rise and rainfall becomes less predictable.

“Coffee beans are no longer as profitable, as my harvests keep on falling,” Ludovick Meela, a farmer from Tanzania’s northern Kilimanjaro region, told the Thomson Reuters Foundation, the charitable arm of the Reuters news organization. “I need fast-growing crops I can sell for a quick income.”

The strain to Tanzania’s cash crops is the latest sign that climate change is altering how and where food is produced around the world. In Honduras, banana farmers are seeing yields decline amid fierce cold snaps and erratic rain patterns. India’s wheat and rice crops are suffering from hotter weather, and in the U.S. West, enduring drought has caused the beef-cattle herd to shrink to its lowest level in more than 60 years.

Climate change is also exacerbating a water scarcity challenge in the U.S. and globally. About 80 percent of the world’s freshwater resources are used to produce food, by some estimates, but drought, irregular rainfall and warmer surface temperatures are threatening to diminish those supplies. “Agriculture and food production as we know it in the United States is at risk, perhaps at far greater risk than we realize,” Jay Famiglietti, a senior water-cycle scientist at NASA, told reporters earlier this month.

In Tanzania, scientists have attributed the drop in arabica coffee yields to a rise in nighttime temperatures in recent decades.

Since 1966, the country’s coffee production has fallen by 46 percent, a trend expected to continue this century. Over that same period, Tanzania’s nighttime average temperature has ticked up by 1.4 degrees Celsius (2.5 degrees Fahrenheit), according to a recent study by South Africa’s University of the Witwatersrand. The researchers estimated that for each 1 degree Celsius (1.8 degree Fahrenheit) rise in the mean minimum temperature, coffee farmers were likely to lose around 137 kilograms (300 pounds) of coffee per hectare (2.5 acres) annually.

Tanzania’s declining coffee output has a limited impact on the world’s supply of the caffeine-rich beans — the country produces less than 1 percent of arabica coffee worldwide, according to Tanzania’s Coffee Board. But the regional economy could suffer significantly if coffee production falls further, observers say. The industry employs about 2.4 million people in Tanzania and millions more in neighboring countries in East Africa. “The effects to livelihoods and jobs will be huge,” Haji Semboja, an economics professor at the University of Dar es Salaam, told Reuters in April.

The declining trend is pushing Meela and other farmers in Tanzania to cultivate other types of crops — such as cabbage, onions, lettuce and potatoes — and to keep dairy cattle. Meela said he believes these are a better investment of his time and money than climate-threatened coffee, the Reuters foundation reported Monday.

“When my children were growing up, coffee was everything to me,” he told the news organization. “I got a lot of income from it, which enabled me to gain economically, but all that is history.”

The Coffee Space Arms Race !

Espresso? Now the International Space Station Is Fully Equipped
Samantha Cristoforetti, the first Italian woman in orbit, after brewing the
first espresso in space. Credit NASA, via Associated Press
ROME — Samantha Cristoforetti had an espresso on Sunday that was out of
this world, and she did it in the name of science.
Ms. Cristoforetti is an astronaut, the seventh Italian and the first
Italian woman to venture into orbit. She has been at the International
Space Station since November, and over the weekend she got to do something
quintessentially Italian: She became the first person to drink an authentic
serving of what she called “the finest organic suspension ever devised” in
“Fresh espresso in the new Zero-G cup! To boldly brew … ” she posted on
social media, where she has been chronicling her stay on the station with
photos and explanatory videos.
However much she may have enjoyed her first espresso in more than five
months, making the drink in orbit was no lark, but “a very serious study in
fluid physics,” Roberto Battiston, president of ASI, the Italian space
agency, wrote in an emailed statement. “Until Sunday, we didn’t know
exactly how hot fluids under high pressure reacted” in the near-weightless
environment of the space station, he said. “Now we do.”
A special espresso maker, named ISSpresso, was designed for the task by
Argotec, an engineering and software firm based in Turin, and the Italian
coffee producer Lavazza, with help from the space agency. It was included
among the experiments and technical demonstrations that Ms. Cristoforetti,
a captain in the Italian Air Force, was scheduled to carry out on her
mission to the station, which ends in mid-May.
“Coffee represents one of the distinctive elements of Italian culture,”
said a spokeswoman for the agency, who requested anonymity under her
agency’s rules for employees.
Making a proper espresso — a singular alchemy of high temperature, water
pressure and perfectly tamped coffee — is difficult enough to master on
earth. Microgravity conditions made the task still more complicated, and
Argotec took two years to work out how to do it.
“We developed our hardware on the basis of the parameters for making good
coffee, while considering safety requirements,” said Valerio Di Tana, an
engineer at the company.
The squat, 44-pound machine wound up looking something like an
old-fashioned laboratory incubator, built from military-standard
components. “You don’t see those on terrestrial machines,” Mr. Di Tana
The dripless system is even designed to emit a small waft of coffee odor
when the straw is inserted into the pouch containing the brew. Two small
flaps on the side allow an astronaut to hold it without burning a hand.
An important part of the espresso-in-space experience is the newly
developed microgravity coffee cup, which allows astronauts to sip liquids
more or less the way they would use a cup on earth. It does not have an
open top that would allow spills, though; instead, the liquid reaches the
astronaut’s lips by capillary action — “almost like the wicking of water
through a paper towel,” a NASA blog post explains. The cup also provides
data on the passive movement of complex fluids in space.
The ISSpresso machine makes other hot drinks as well, including tea and
consommé. “This is important from the nutritional aspect, but also gives
the astronauts a psychological boost,” David Avino, the managing director
of Argotec, said in a telephone interview on Monday.
The company had already begun the project when another Italian astronaut,
Luca Parmitano, remarked in a June 2013 interview from the space station
that the one thing he really missed in space “was a good cup of espresso.”


Port of Oakland says most diverted vessels have returned

In one of the more positive developments to affect West Coast ports since the announcement of a tentative coastwide longshore contract on Feb. 20, the Port of Oakland reported Tuesday that vessels which had been by-passing the Northern California port to keep on schedule have mostly returned.

“Some vessels that were omitting Oakland have already started to return, and a look at schedules indicates that the rest will be back soon,” said John Driscoll, the port’s maritime director.

All West Coast ports have grappled with congestion and vessel backlogs since early November during labor disruptions associated with the contract negotiations between the International Longshore and Warehouse Union and the Pacific Maritime Association. An ILWU caucus in San Francisco on Friday voted overwhelmingly to recommend general membership approval of the tentative agreement that was reached on Feb. 20. Voting will be held next month, with the results to be announced on May 22.

More than two dozen vessels bypassed Oakland in January and February to maintain schedule integrity. Now that carriers are returning to their normal trans-Pacific rotations, importers and exporters in Northern California can resume their standard supply chain practices.

This will certainly help to boost Oakland’s cargo volumes. Vessel by-passes contributed to a 31.6 percent decline in container volume in January and February.

Oakland’s two largest container lines, Maersk Line and Mediterranean Shipping Co., have already resumed Oakland calls. The G6 alliance has restored two services and plans to restore two more in April. The CKYHE alliance will be back on its normal schedule by early May, Oakland reported.

The port continues to work with terminal operators and trucking companies to improve gate fluidity. Some trucking companies report their drivers are spending too much time in long lines outside the terminal gates. Port spokesman Mike Zampa said truck visit times vary widely, with some truckers reporting turn times as short as 38 minutes and others saying turn times are several hours.

Vessel calls in Seattle-Tacoma have returned to normal, and container backlogs on the terminals have dissipated. Port of Seattle spokesman Peter McGraw said occasional surges in exports result in truck bunching at the gates, however.

Terminal operators in Los Angeles-Long Beach are deploying huge quantities of labor on day, night and weekend shifts to reduce the congestion that is still present in the largest U.S. port complex. For example, the PMA reported that on Saturday 1,092 longshore jobs were ordered. The average for a Saturday is 970. On Monday, 1,547 longshore jobs were ordered for the first shift. The average dispatch for a Monday morning gate is 1,260.

The Marine Exchange of Southern California said eight container ships were at anchor on Tuesday. That was down from 10 vessels on Monday. As the vessel backlog in Southern California is reduced, container lines’ schedule integrity in the Pacific Southwest services will improve. The ships call in Oakland after leaving Los Angeles-Long Beach.

Port Delays Continue

Despite the February 21 settlement of a bitter labor dispute at West Coast ports between employers and members of the International Longshore and Warehouse Union (ILWU), whose members command average wages and benefits of about $1,200 a day, the continuing bottleneck is still causing job and revenue losses across many US industries.

Breitbart News had reported that the 13,500 ILWU members’ strategy of withholding of needed crane operators and slowing of crane movements cost shippers and their customers an estimated $1 billion a day during January and February.

The start of the year through early March traditionally is a slow time for international trade, but it tends to be a busy period for certain industries like agricultural exports and building material imports.

For California’s fresh fruit and vegetables producers, losses may never be recovered even after the settlement. Port delays are still running up to eight weeks, which means about 20 percent of this year’s agricultural exports are expected to spoil. Sun Pacific Shippers and Farming, the largest navel orange grower in California and largest kiwi grower in the United States, told the San Francisco Chronicle that port delays will cut their firm’s exports in half this year.

In addition, the bottlenecks at the West Coast ports that caused such horrendous losses pushed back building material imports by at least eight weeks, just as construction demand is accelerating in the spring ramp-up.

With the hot IPO market flooding Silicon Valley and the San Francisco Bay Area with oodles of cash, a number of large trophy office projects had been going-up in the South of Market tech zone. But much of that building has ground to a halt due to protracted delays blamed on the shortage of tempered exterior glass.

Nathan Rundel of the Build Group told CBS San Francisco: “We were all trying to get the cost of these projects less. And so we started to source Chinese curtain wall or overseas curtain wall.” He commented that the hoped-for savings have been more than wiped out by millions of dollars in delays.

Glass Shortage Impacting San Francisco’s Skyline
CBS San Francisco

According to Rundel, “curtain wall” that serves as the outside skin of most modern high-rises is always custom ordered for the each project. Without glass on the exterior, interior work on the structure cannot begin.

Rundel estimates that a delay could cost him $200,000 a month per building. Fortunately, he ordered glass from a very trusted supplier that took extra steps to get his materials delivered on time. He doesn’t have much sympathy for competitors that went for cheap imported curtain wall, “Their glass has been delayed five, six, seven months. Both from the fact that they went to new vendors and the fact that they can’t get their material.”

But Rundle has lots of sympathy for the construction workers that should be making big money in a record year of work. Due to the continuing bottleneck that is the hang-over from union battle at the ports, hundreds of hard-working laborers are being impoverished.

Brazil Crop Forecast Update

March 18 (Reuters) – An unprecedented drought reduced 2014 coffee production in Brazil, the world’s biggest grower, and stunted tree branch growth for the upcoming 2015/16 crop.

German coffee trader Neumann forecast in a March report that Brazil will harvest 45.3 million 60-kg bags of coffee in the harvest that will start in May, according to traders who saw the report.

This is up from its August forecast of 45 million bags. In the August report, it said Brazil’s 2014/15 crop was 47.7 million bags.

This is the lowest in a range of estimates gathered from trade houses since late December, with the highest at 49.5 million bags, estimated in February by Volcafe, the closely watched Swiss-based coffee division of commodities house ED&F Man.

Swiss-based trade house Ecom shaved its forecast slightly in a presentation to clients last week, estimating that Brazil would produce about 49 million 60-kg bags, with roughly 32 million arabica and 17 million robusta.

This was down slightly from its December estimate of 50 million bags.




Colombia coffee growers demand financial help as prices slide

09-Mar-2015 16:53
By Peter Murphy
BOGOTA, March 9 (Reuters) – Colombia’s coffee growers are requesting government cash to help cover rising costs after a recent sharp fall in the price of arabica beans, a growers’ representative said on Monday, as discontent resurfaces across Colombia’s farm sector.
The Dignidad Cafetera movement, which led protests by coffee growers in 2013, wants the government to pay out 850 billion pesos ($327 million) of subsidies not disbursed last year after arabica prices shot above an agreed subsidy cut-off rate.
Coffee growers met with two congressmen on Monday to discuss their financial difficulties after a 17 percent slide in arabica prices and to demand left-over subsidy cash be channeled into a fund that would top up farmer incomes when prices fall low enough.
“We are demanding that these 850 billion pesos are returned to create a stabilization fund to compensate for production costs,” said Alonso Suarez, Dignidad Cafetera spokesman for Antioquia, one of Colombia’s biggest coffee regions.
Suarez said the movement would also seek a meeting with Agriculture Minister Aurelio Iragorri to discuss their demands and said a repeat of protests in 2013, in which farmers blocked roads and refused to sell beans, was a “last option.”
Colombia is the world’s top producer of mild, washed arabicas.
The government is unlikely to be as receptive to requests for funds as it was two years ago. Its coffers have been shrunken by last year’s plunge in oil prices last year that prompted a hasty tax reform to ensure it could still pay bills.
The dip in international prices for coffee has been offset by a weaker peso, which has lost more than a fifth of its value versus the dollar in a year and hit its weakest level since 2006 on Monday. But that also raises the cost of imports like fertilizer.
The farmer-funded National Coffee Growers’ Federation was not involved in Monday’s meeting, which included representatives from other agriculture sectors including cocoa, rice and plantain, who are also seeking government intervention.
Arabica prices have plunged after fears subsided that world top coffee grower Brazil would face a shrunken, weather-hit crop for a second year in a row after rains recently ended a harsh dry spell and due to the weakening of the Brazilian currency.

Global Coffee Exports

Global coffee exports rise slightly in January -ICO – RTRS
27-Feb-2015 10:46

NEW YORK, Feb 27 (Reuters) – Global coffee exports reached 8.79 million 60-kg bags in January, up slightly from last January, while exports for the first four months of 2014/15 were little changed from a year ago, International Coffee Organization data showed on Friday.

Exports of arabica coffee in the 12 months ending in January were up slightly at 68.44 million bags from 68.38 million bags in the same period a year ago. Robusta exports rose to 43.56 million bags from 41.86 million bags the prior year, the data showed.
(Reporting by Marcy Nicholson; Editing by Chizu Nomiyama) ((email hidden; JavaScript is required; +1 646 223 6043; Reuters Messaging:marcy.nicholson.thomsonreuters.com@reuters.net))

PCCA Risk Management Seminar – Coffee Futures – April 8th – April 9th, 2015

Coffee Futures, Options and Structured Products

Risk Management Seminar

By: Albert Scalla Executive Vice President


Dates:  April 8thApril  9th, 2015      

Place: Sheraton Seattle Hotel      

 1400 Sixth Avenue     

 Seattle, WA 98101 

COSTS: PCCA/INTL FCStone seminar fees:

PCCA Member $695 Non Member $975  

Space is limited – So please register ASAP!  

Training will be from 8:00 AM to 2:00 PM  both days. Please click on the  link below to register for this event.         

PCCA Futures Seminar Registration Invoice 

Coffee Consumption Expected to Jump

The world is drinking more coffee, with demand likely to rise almost 25% in the next five years, according to the International Coffee Organization.

“Consumption is increasing as societies in India, China and Latin America continue to be westernized,” said Roberio Silva, the executive director of the intergovernmental coffee body.

Coffee demand is expected to jump to 175.8 million bags of beans by 2020, from 141.6 million bags now, Mr. Silva told the Africa Fine Coffee Conference in Nairobi last week. Each bag weighs about 132 pounds.

The strong demand projection comes at a time of squeezed global coffee supplies, which pushed prices to multiyear highs last year following a historic drought in Brazil, the world’s largest grower.

The forecast rise in demand comes as a drought in producer Brazil has pushed prices to multiyear highs. ENLARGE
The forecast rise in demand comes as a drought in producer Brazil has pushed prices to multiyear highs. PHOTO: BLOOMBERG NEWS
Total global coffee production is projected to drop to around 141 million bags during the current crop year, from 146.7 million bags last year, largely because of the effects of drought in Brazil and a plant fungus that is curbing output in Central America, Mr. Silva said.


“The world cannot afford to keep looking only at Brazil” for production, Mr. Silva said.

Weather worries this year have added uncertainty to Brazil’s harvest. Conab, the government crop agency, predicts coffee production at 44.1 million to 46.6 million bags of beans, on par with last year. The National Coffee Council, however, has said the harvest will be lower, at 40 million bags.

“Brazil is suffering from an additional drought, this time in its robusta-growing regions,” Mr. Silva said. Robusta is a variety of coffee that is more bitter and less expensive than arabica. Brazil grows both types of coffee.

Rainfall in the state of Espirito Santo, where much of the nation’s robusta is grown, is expected to remain low in the week ahead, according to Brazilian weather forecaster Somar Meteorologia. Marcos Antonio dos Santos, an agrometeorologist with Somar Meteorolgia, said more rains are expected in coffee-producing regions of São Paulo and Minas Gerais, where arabica is grown.

Coffee output from growers such as Vietnam, India and Indonesia won’t be enough to stabilize the markets next year, said Judith Ganes Chase, the head of U.S. commodity consultancy firm J. Ganes Consulting LLC. As a result, global coffee stocks may drop by four million bags in the year beginning Oct. 1, she said.

While tight coffee supplies ordinarily push prices higher, the market is also grappling with currency fluctuations.

“The plunging real has kept the market from advancing as one might expect from the ongoing problems in Brazil,” Ms. Chase said.

The Brazilian real has been trading at the lowest level in nearly a decade against the U.S. dollar. Brazilian producers and exporters tend to sell coffee when the real weakens because they get more reais back when they convert their dollar-denominated sales into their home currency.

On Friday, the May arabica coffee contract traded on the ICE Futures U.S. exchange eased 0.6% to $1.6650 a pound. Robusta futures traded in London rose 1.1% to $2,009 a metric ton, the equivalent of 91 cents a pound.

—Rogerio Jelmayer contributed to this article.

Write to Nicholas Bariyo at email hidden; JavaScript is required

Colombia’s coffee sector needs complete overhaul -gov’t study – RTRS

By Peter Murphy

BOGOTA, Feb 10 (Reuters) – Colombia’s coffee sector needs a complete overhaul to recover from a huge loss of global market share, says a government-commissioned report seen by Reuters whose recommendations include deregulation of exports and the introduction of a minimum price.

Despite the undisputed quality of its mild arabica coffees, Colombia now supplies only a tenth of global exports versus 18 percent around 1990, prompting fierce debate over what steps one of the country’s largest employment providers should take to regain share.

The study, carried out over two years, recommends scrapping the minimum quality standard for exportable beans so growers can enter the fast-growing low-end coffee segment, where prices are higher abroad.

The report, to be delivered this week or next to President Juan Manuel Santos, was commissioned to address Colombia’s marginalization in global coffee.

Controversially, it advocates a smaller role for the National Coffee Growers’ Federation, which exports about a quarter of Colombia’s coffee, a suggestion that has drawn a fierce response from federation members when raised in the past.

The report suggests splitting the farmer-funded entity into a private trading arm and one that would provide technical support to growers. It argues growers may earn more by dealing with a more competitive, exclusively private, export sector.

Private exporters complain the federation, which publishes its fluctuating guaranteed purchase price daily to set a market floor, competes unfairly because it is tax-exempt and because its shipments face fewer bureaucratic hurdles.

The federation says its presence ensures growers receive a better price, while the study says it is a drain on government funds, which are used to supplement the $0.06 per lb the federation earns from a tax paid on coffee shipped by private exporters.

Growing Colombia’s prestigious high-altitude beans provides a livelihood for 350,000 families and provides important social cohesion in a country where a 50-year war with leftist guerrillas has been fought mostly in rural areas.

The federation has opposed tampering with the sector’s economic model, while private exporters say that lack of flexibility has led to Colombia’s decline, as the industry has not adapted to new trends in global coffee.

Instead of the federation’s price guarantee, the report recommends government-funded support for growers when prices drop low enough. This would emulate the mechanism used in the world’s top coffee grower, Brazil, to ensure growers’ variable costs are always met.