Weekly Coffee News
February 27, 2015
Global Coffee Exports
27-Feb-2015 10:40 – WORLD COFFEE EXPORTS AT 8.79 MLN BAGS IN JANUARY 2015, UP FROM 8.77 MLN BAGS IN JANUARY 2014 -ICO
27-Feb-2015 10:40 – GLOBAL COFFEE EXPORTS DOWN 0.1 PCT IN FIRST FOUR MONTHS OF 2014/15 VS YEAR-AGO -ICO
27-Feb-2015 10:40 – GLOBAL ARABICA EXPORTS AT 68.44 MLN BAGS IN 12 MONTHS ENDING JANUARY VS 68.38 MLN BAGS PRIOR YEAR -ICO
27-Feb-2015 10:40 – GLOBAL ROBUSTA EXPORTS AT 43.56 MLN BAGS IN 12 MONTHS ENDING JANUARY, UP FROM 41.86 MLN BAGS YEAR AGO -ICO
Global coffee exports rise slightly in January -ICO – RTRS
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.
February 23, 2015
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 8th – April 9th, 2015
Place: Sheraton Seattle Hotel
1400 Sixth Avenue
Seattle, WA 98101
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.
February 19, 2015
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.
February 11, 2015
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.
February 09, 2015
Truckers declare force majeure as West Coast port congestion continues
DRAYMEN SAY THEY COULD BE FORCED OUT OF BUSINESS BY HUGE DEMURRAGE AND DETENTION BILLS.
The Harbor Trucking Association (HTA), which represents drayage companies near the Ports of Los Angeles and Long Beach, said more than 70 trucking companies have declared “force majeure” in letters sent to the Intermodal Association of North America (IANA) and various steamship lines in response to huge “per diem” and demurrage charges for containers and chassis.
“These more than 70 companies have been unable to return or take possession of marine equipment due to the congestion crisis that has been impacting the Ports of Los Angeles and Long Beach for several months, and have each been charged hundreds of thousands of dollars in per diem and demurrage bills as a result. These unfair charges are in violation of California State Law under SB 45 and are on the brink of forcing many of our Licensed Motor Carriers (LMC) out of business,” the HTA said in a press release.
Congestion at West Coast ports has worsened as contract talks between the International Longshore and Warehouse Union and Pacific Maritime Association have dragged on for nine months. The PMA says the union has been engaged in a slowdown since Halloween. On Thursday, the PMA said a lockout at ports might occur if a contract is not reached soon, and the PMA suspended loading and unloading of ships this weekend, though some terminals may continue yard and gate operations.
“After three months of union slowdowns, it makes no sense to pay extra for less work,” said PMA spokesman Wade Gates, “especially if there is no end in sight to the union’s actions which needlessly brought West Coast ports to the brink of gridlock.” He said ILWU members make time and a half on weekends.
Gates said contract talks between the ILWU and PMA are scheduled to resume Monday.
Craig Merrilees, a spokesman for the ILWU, responded by saying “Closing the ports over the weekend is a crazy way to treat customers. The foreign-owned firms behind this move are insulting the businesses who need their containers, and should focus instead on reaching an agreement that is almost done – and could be finished if they focused more on concluding a contract and less on gimmicks and games that hurt the economy.”
On Saturday morning, Kip Louttit of the Marine Exchange of Southern California said 31 ships, including 20 containerships, eight bulk carriers, two tankers and a car carrier were anchored outside the Ports of Los Angeles and Long Beach because of congestion.
Weston LaBar, executive director of the HTA explained how the congestion crisis is affecting the drayage industry.
“A lot of our companies have six-figure bills, hundreds of thousands of dollars per month in per diem,” said LaBar. “And the biggest reason for the per diem is that they are not able to return marine equipment.”
Per diem is the charge paid when intermodal equipment is not returned by the end of the allowable free time to its origin or to another location, as previously agreed.
“The same goes for demurrage,” added LaBar. He said after containers are unloaded from ships, they are sometimes being placed in closed areas for their entire free time and truckers are “charged demurrage before they ever have the ability to take possession of the container and remove it. They are just in some area of the yard that the marine terminal for whatever reason has said ‘this area is not open.’”
Demurrage is a charge to be paid when intermodal equipment is stored on property, and is normally used to encourage swift removal of containers from terminals.
“For those companies who can no longer afford to pay these mounting invoices, they are being locked out from doing business at the ports causing further distress to the ongoing congestion crisis and hurting the individual truck drivers that drive for them,” HTA said.
“A lot of our smaller companies are on the brink of going out of business, because they don’t have the cash flow to support the per diem and demurrage charges” said LaBar.
LaBar said HTA members and other motor carriers have contested the charges, saying they should not have to pay them because carriers have not been able to pick-up or return equipment due to congestion at the port. He said in some cases charges have been waived, but in others, truckers have been told they must pay the charges or face being shut out of terminals.
HTA said the trucking companies are invoking a declaration of force majeure as defined under the Uniform Intermodal Interchange Agreement (UIIA), the standard agreement used. The UIIA provides this definition in the agreement, “Force Majeure: In the event the motor carrier is unable to interchange equipment to provider within the free time as specified in provider’s addendum, or provider’s applicable tariff, as a result of acts of God, war, insurrections, strikes, fire, flood or any like causes beyond the motor carrier’s control, the motor carrier shall be exempted from the per diem charges to the extent of, and for the duration of, the condition that prevented the redelivery of the equipment.”
LaBar said, “The steamship lines seem to think that they can declare force majeure under the addenda they file, but they don’t think the truck driver has the ability to do that and the first thing we need is for the industry to realize that this is absolutely a state of force majeure.”
Although the Pacific Maritime Association issued a press release on Nov. 6 headlined “Longshore Union’s Job Actions Spread from Pacific Northwest to Nation’s Largest Port Complex in Southern California,” LaBar said the HTA believes a slowdown began in the port in mid to late summer of last year.
“The HTA stands by this ground breaking declaration from these companies and will continue to fight for members to continue moving the world’s cargo,” the association said. “Many of our members have taken to the Dispute Resolution Process (DRP) under the UIIA to have these unfair charges properly dismissed.
“We don’t think that is enough!” HTA added. “The motor carrier does not have equal rights under the UIIA” as other stakeholders.
HTA is calling on the IANA to hold a summit to amend the UIIA and add a “Motor Carrier Bill of Rights.”
“It is high time the LMC had an equal seat at the table, as well as equal and fair protections under this one-sided agreement,” said HTA. “We are advocating for a true bi-lateral agreement that allows our members to have the necessary protections to prevent abuses like these from happening again and harming the global supply chain and goods movement in Southern California.”
LaBar said truckers would like, for example, more ability to set their own rates and have marine terminals involved in the agreement. This way, if a terminal will not take back an empty container, the trucker would be able to charge for storage or diversion of equipment.
This would “even the playing field,” he contended.
“The marine terminal which controls a lot of these situations are not part of the agreement,” he said. “It is the ocean carrier, the equipment provider, motor carrier and we feel the marine terminal needs to be part of that.”
Truckers pay per diem charges to ocean carriers if containers are returned after a free time period expires that can range from $85 to $175 on a dry containers, and reefer charges can be double that, according to LaBar. He also noted that truckers may have to pay a separate per diem to the chassis leasing company.
IANA administers the UIIA, which has over 6,700 motor carrier, 53 equipment provider signatories and is utilized for approximately 95 percent of all North American intermodal equipment interchanges.
January 15, 2015
Detailed Brazil Weather/Rain Forecast
… in case of interest ….
· The forecast lower rainfall values are roughly concentrated in the Sul de Minas/Mogiana regions while higher forecast values are suggested for more southern regions (eg border areas of Sao Paulo and Parana states).
January to March period, 2015.
Seasonal forecast for January to March, 2015 using our internal USQ system:
· most locations in the key Sul de Minas/Mogiana regions have a probability of getting their long-term median rainfall of between 26% and 29% for this period.
· Most other locations in southern Brazil (especially in the far south) have an approx. 50% probability of getting their long-term median rainfall for this period.
Seasonal forecast for January to March, 2015 using the general circulation models of our collaborators of the UK and other sources: double the risk of being in the lowest 33% of possible values for the Sul de Minas/Mogiana regions. Close to normal probability values for remaining regions.
February to April, 2015.
Seasonal forecast for February to April, 2015 using our internal USQ system:
· most locations in the Sul de Minas/Mogiana region have a probability of getting their long-term median rainfall of between 30% and 36% for this period.
· Most other locations in southern Brazil (especially in the far south) have an approx. 50% probability of getting their long-term median rainfall for this period.
Seasonal forecast for the February to April total period: using the general circulation models of our collaborators in the UK and other sources: double to three times the risk of being in the lowest 33% of possible values for the Sul de Minas/Mogiana region. Close to normal probability values for remaining regions.
14/1-22/1/15: 25%-50% of normal rainfall (ie 15-30mm) in Sao Paulo and Minas Gerais States – close to normal values remaining regions (ie more southern regions) (ie 50-70mm).
22/1-30/1: 10-35mm throughout.
Temperatures for the January to March period: 50%-70% probability of above normal mean temperatures, especially in Sul de Minas/Mogiana.
January 14, 2015
Port Update : From Bad to Worse
Longshore contract negotiations on the U.S. West Coast have degenerated into a war of attrition in which the union’s work slowdowns have significantly increased operating costs for shipping lines and terminal operators, and the employers are countering by reducing work opportunities for rank-and-file longshoremen.
Caught in the middle are the ports, whose reputations have been tarnished, truckers, who sit idle in long lines, often without compensation, and cargo interests, whose cost of shipping through the West Coast has skyrocketed.
Conditions are so bad that some employers say the only way to stop the bleeding is to lock out the union as they did in the 2002 contract negotiations. However, those employers are still outnumbered by others who say that everyone will lose in a lockout, and a war of attrition is the better option.
The contract negotiations, which began on May 12, are now in their ninth month. Shipping lines and terminal operators, who are represented by the Pacific Maritime Association, can no longer afford the increased operating costs that result from work slowdowns by the International Longshore and Warehouse Union. According to numbers published each week on the PMA website, terminal operators are paying 15 to 20 percent more man-hours than they did in the same weeks last year, but cargo volumes are up only about 1 to 3 percent, depending upon the port range.
Shipping lines are suffering as well because vessels are taking as long as one week to work, when cargo should be discharged and loaded in no more than three days. Carriers say they lose at least $50,000 each day that their vessels are idle. According to the Marine Exchange of Southern California, seven containerships were at anchor Tuesday awaiting berths. In Oakland, the port reported that eight container ships were at anchor.
The strategy of ILWU negotiators apparently is to make the hard-timing so costly for individual employers that they will cave in to the union’s demands on unresolved issues involving automation, and also jurisdiction over chassis maintenance and repair. The ILWU hopes the individual companies will pressure PMA negotiators to grant the union’s demands. Last month, ILWU President Bob McEllrath said the negotiations would reach a successful conclusion only when shipping lines became directly involved in the contract talks.
Employers have taken the offensive by cutting back on work opportunities for longshoremen. Terminal operators in Seattle and Tacoma have not opened for night shifts for several weeks now. Oakland’s terminals no longer work vessels at night, although they continue to employ longshoremen at night to organize containers in the yards. When longshoremen refuse to dispatch enough workers, especially equipment operators, to fill a gang, employers dismiss the gang within one hour so the workers don’t have to be paid.
Terminal operators in Los Angeles-Long Beach caused a stir on New Year’s Eve when they informed the ILWU locals in Southern California they were reducing the number of vessel work crews at night to one, from the three 45-member gangs that had been loading and unloading ships. Employers went a step further on Monday when they informed the ILWU locals that beginning today there would be no gangs hired to work vessels at night, although yard and gate operations would not be affected.
According to letters from the PMA to the ILWU locals, these actions make good operational sense. PMA stated that since the ILWU in Southern California on Nov. 3 unilaterally decided to reduce from 110 to 35 the number of skilled yard crane operators that would be dispatched each day, the container yards had become so congested there was no space left to accept additional containers at night. Therefore the terminals would stop discharging containers from the ships at night, and would use the night shift to relieve congestion in the yards.
PMA spokesman Steve Getzug said Tuesday that reasoning is still valid. “Our sole rationale for the adjustments in night operations at L.A. and Long Beach is to free up crane drivers to clear the yards. It’s that simple.”
However, at least in the thinking of some employers, reducing work opportunities at night at all of the ports also hits the rank-and-file longshoremen in their pocketbooks. Many longshoremen like nightwork, which carries premium pay, and they reportedly care very little about the union negotiators’ stance on chassis maintenance and repair, which is one of the issues preventing negotiation of a new contract.
ILWU negotiators want the PMA to guarantee the union M&R division, which accounts for about 10 percent of the ILWU membership, the right to inspect every chassis before it leaves the terminal. This is no longer possible because the shipping lines sold their chassis to equipment leasing companies, and those employers are not members of the PMA. ILWU negotiators want jurisdiction over “red-lined” terminals that years ago signed M&R contracts with other unions such as the International Association of Machinists. The PMA can’t make any such guarantee because they have no control over those contracts. ILWU negotiators want PMA to grant the ILWU M&R jurisdiction at off-dock locations run by the chassis-leasing companies, but the PMA has no jurisdiction over the off-dock sites.
Some rank-and-file longshoremen are reportedly upset over losing work opportunities on the night shifts because union negotiators are holding up contract approval over M&R work that is performed by ILWU mechanics. Employers hope that those general longshoremen pressure the ILWU negotiators to back off on chassis demands that the PMA can not grant even if the employers’ group chose to do so.
Just as the PMA will not discuss bargaining strategy, the ILWU does not do so either. In recent statements, and in letters to the PMA, the union has attacked he employers’ decisions to cut back on night work as being bad for productivity at the ports. In a letter Monday to the PMA, the president of the three ILWU locals in Southern California said the decision to cease all vessel operations at night would not improve productivity.
“There is no evidence that there has been any effort to reallocate labor to clearing the yard,” said Bobby Olvera, president of ILWU Local 13. “We ask you to reconsider this unilateral action. It is not a sound management decision and will inflict direct damage on the industry and to retailers large and small. In the interim, ILWU Local 13 will continue to fill any orders for night-side vessel gangs it receives,” Olvera said.
Meanwhile, the war of attrition continues. The PMA, in a release on Monday, said: “The ILWU slowdowns and the resulting operational environment are no longer sustainable. The PMA has alerted the local port authorities to the deteriorating situation on the docks.” The PMA said that statement should be taken at face value, meaning the terminals are approaching complete gridlock. Others say is a not-so-subtle warning that if the slowdowns continue, the voices within the PMA calling for a lockout of the ILWU will get louder and will soon outnumber those who oppose a lockout.
It is generally agreed that no one wants a lockout. Rank-and-file longshoremen would receive no paychecks because they won’t be working. Terminals will forego revenue because they won’t be lifting containers on and off of ships, and shipping lines will lose thousands of dollars a day because their vessels will sit idle at anchorage. Furthermore, a lockout and the inevitable Taft-Hartley injunction that would follow would only prolong the agony because the work slowdowns would most likely continue.
On the other hand, cargo interests and shipping lines based in other countries seek action after eight months of inaction in the negotiations, and rank-and-file longshoremen are seeing their earnings diminish each week as employers reduce their hours, so each group is pressuring its respective negotiators to end what they consider to be complete nonsens
January 13, 2015
PORT Update : Despite mediator, war of words escalates between ILWU, PMA
Despite the involvement of a federal mediator in contract negotiations over the past week, West Coast dockworkers are continuing their policy of work slowdowns and the withholding of skilled labor, bringing West Coast ports to the brink of “complete gridlock,” the Pacific Maritime Association said Monday.
The International Longshore and Warehouse Union responded with a blistering release late on Monday saying PMA conceded at the negotiating table that port congestion on the West Coast was caused by operational issues such as a lack of space to handle the return of empty containers and export loads. The ILWU and the PMA have thus appeared to break the two sides’ mutual pledge, which had largely held since negotiations began last May, not to discuss details of the actual negotiations. That by itself takes the negotiations to a new low.
The ILWU also accused the PMA of putting the economy at risk through ill-advised changes in work procedures in recent weeks and then blaming the union for the problems “in a self-serving attempt to gain the upper hand at the bargaining table.”
The Federal Mediation and Conciliation Service announced on Jan. 5 that the ILWU-PMA contract negotiations would be held under its auspices. The negotiations began on May 12, 2014, and the ILWU has been working without a contract since July 1. The PMA has charged that beginning in late October, the ILWU initiated work slowdowns that contributed to already-existing congestion at the ports. With the negotiations at an impasse, the PMA on Dec. 22 requested federal mediation, and last week the ILWU did the same.
Although the federal mediator cannot dictate a solution to the contract impasse, past maritime industry experience with federal mediation has shown that in the vast majority of the cases mediators have helped the parties to reach a compromise.
But so far that has not been the case in the ILWU-PMA contract negotiations in San Francisco. In fact, it appears the situation is only getting worse.
ILWU dockworkers in Portland on Monday walked off their jobs at noon, leaving two vessels at Terminal 6 without labor. Involvement of the federal mediator in contract negotiations this past week has resulted in “no further agreements” at any of the West Coast ports, the PMA stated on Monday. Contract negotiations on the West Coast involve both coastwide issues such as wages and benefits, and issues that are particular to the individual port regions.
Meanwhile, congestion continues to mount at West Coast ports. It began last summer with operational issues caused by big ships producing large cargo spikes, compounded by a shortage of chassis, truck and intermodal rail capacity and carrier alliances increasing the number of inter-terminal moves. The congestion got worse last fall when the ILWU job actions began, according to PMA. Terminals that were already congested due to operational problems were pushed to the breaking point when equipment operators began to drive slowly and skilled personnel were not dispatched, employers said.
The ILWU, however, said that in contract talks in recent weeks, PMA told the ILWU that employers were not blaming the union for West Coast port congestion. The PMA told the union that “the lack of space for returning empty and export containers was exacerbating the existing chassis shortage — because export-bound containers are a key source of desperately-needed chassis that have become the number-one choke point ever since shipping lines stopped providing a chassis for each container arriving to West Coast ports,” the ILWU stated.
The PMA blames the ILWU’s withholding of skilled labor as a critical cause of the congestion, especially in Los Angeles-Long Beach, the largest U.S. port complex. “The ILWU’s action in Southern California goes against 15 years of precedent and targets precisely the skilled workers who are most essential to clearing congested terminals. By withholding an average of 75 yard crane drivers each day, the ILWU has stalled the movement of tens of thousands of containers, the PMA estimates. Since Nov. 3, the union has reduced these yard crane operator positions in Southern California by 67 percent,” PMA stated Monday in a release.
The ILWU responded that PMA’s recent decision to eliminate night shifts at some of the ports has emerged as a serious problem. “In addition to cutting shifts at major container ports, the PMA cutbacks would also apply to bulk and breakbulk operations, for no apparent reason other than as a cynical tactic to generate anxiety among workers,” the ILWU stated.
Both sides have been guarded about releasing the issues being discussed in negotiations, but automation is known to be an important one. As some terminals automate, they will replace manually-operated yard cranes with automated stacking cranes that have no drivers. This technology has been used in Europe for 20 years.
U.S. terminal operators until recently have hesitated to invest in automated stacking cranes as well as automated guided vehicles, which are driverless carts that move containers from the foot of the ship-to-shore cranes to the container stacks in the yard. Employers have cited labor opposition and also the high cost of implementing automation as their reasons for not adopting this type of container handling automation.
Furthermore, some employers say that a motivated and skilled labor force can achieve productivity rates comparable to the automated machines. They are therefore surprised that rather than working productively to preserve their positions, the ILWU’s skilled equipment operators have reduced their presence on the Southern California docks by 67 percent.
Pay and benefits are not holding up the contract negotiations, PMA said. The PMA annual report states that the average annual earnings for longshoremen who last year worked at least 2,000 hours, or 40 hours per week, were $137,253 for general longshoremen and $154,842 for marine clerks.
“To date, the ILWU and PMA have reached tentative agreements on health care and increases to pay guarantees. That tentative agreement provides fully employer-paid health care benefits valued at $35,000 per worker annually. PMA has proposed pay increases and pension enhancements. There are no takeaways in the PMA proposal,” the employers’ organization stated.
Both parties have stated on more than one occasion that their goal since negotiations began on May 12 has been to achieve a fair contract without a strike or lockout. “Unfortunately, it appears the union’s motivation is to continue slowdowns in an attempt to gain leverage in the bargaining,” PMA spokesman Steve Getzfred said.
ILWU President Bob McEllrath said Monday that dockworkers are “ready, willing and able to clear the cargo backlog created by the industry’s poor decisions.”
McEllrath said employers are “making nonsensical moves like cutting back on shifts at a critical time, creating gridlock in a cynical attempt to turn public opinion against workers. This creates an incendiary atmosphere during negotiations and does nothing to get us closer to an agreement,” he said.
In a possibly foreboding comment, PMA stated, “The ILWU slowdowns and the resulting operational environment are no longer sustainable. The PMA has alerted the local port authorities to the deteriorating situation on the docks.”
January 12, 2015
Peru’s coffee harvest likely to reach 6 mn quintals in 2015
Lima, Dec. 30. The National Coffee Board (JNC) has estimated that coffee harvest in Peru will reach 6 million quintals next year due to stronger investment in fertilization and crop management practices.
January 12, 2015
Coffee Bulls Return as Drought “Menaces” Brazil Crop
Brazil is getting dry again and the coffee bulls are back.
Growing regions are forecast to get about half the normal rainfall this month and in February, according to Celso Oliveira, a meteorologist at Somar Meteorologia in Sao Paulo. Brazil is the world’s biggest grower and exporter, spurring hedge funds to increase their bets on higher prices for the first time in six weeks.
After more than doubling to last year’s peak in October amid the worst drought in decades, coffee ended 2014 in a bear market after heavy rains in November. The return of dry weather sparked renewed risks of damage to flowering coffee trees, sending prices up 12 percent last week, the biggest gain in almost 11 months.
“Coffee is very weather-dependent,” John Stephenson, chief executive officer of Toronto-based Stephenson & Co. Capital Management, which oversees C$50 million, said in a Jan. 9 phone interview. “You’ve seen a massive drawdown in stockpiles in Brazil. When that’s coupled with the drought, supply is tight-to-constrained.”
Arabica coffee for March delivery surged 19 cents last week to $1.8005 a pound on ICE Futures U.S. in New York. Prices rose 9.3 percent this month, the most among the 22 components in the Bloomberg Commodity Index, which fell 1.6 percent. The MSCI All-Country World Index of equities declined 1.3 percent and the Bloomberg Dollar Spot Index climbed 1.3 percent.
The net-long position in coffee rose 6.6 percent to 27,071 futures and option contracts in the week ended Jan. 6, the biggest gain since mid-October, according to U.S. Commodity Futures Trading Commission data published Jan. 9. Long wagers climbed by 2,492 contracts, offsetting a rise in short holdings of 806 contracts.
Northern regions of Brazil will remain “almost completely dry” in the next two weeks, while light rain is expected in southern Minas Gerais and most of Sao Paulo, Donald Keeney, a meteorologist with MDA Weather Services in Bethesda, Maryland, said in Jan. 8 interview. As much as 40 percent of the crop is at risk, because plants need water to develop cherries that contain the coffee bean, he said.
Prices could climb as high as $2.30 by the end of December, according to Ross Colbert, a New York-based global beverage strategist at Rabobank International. Continued dryness may compound last year’s crop damage, he said.
Weather concerns may not last. Arabica-coffee futures dropped 11 percent in December on signs the 2014 drought in Brazil had eased.
The crop Brazil’s farmers will harvest from May to October will reach 50 million bags, Ecom Agroindustrial Corp. said last month. That compares with a July outlook from the National Coffee Council for less than 40 million bags. Each bag weighs 60 kilograms, or 132 pounds. Prices are down 19 percent from a 32-month high of $2.255 reached in October.
“Trying to bet on weather is always just so mercurial and so hard to do,” Sameer Samana, St. Louis-based global strategist at Wells Fargo Investment Institute, which oversees $1.6 trillion, said in a Jan. 8 phone interview. “The overall picture in coffee is more of a short-term move. It’s hard to extrapolate too much from this recent blip.”
Net-long holdings across 18 U.S. traded commodities fell 0.6 percent to 790,238 contracts as of Jan. 6, the CFTC data show. Bullish bets across 11 agricultural commodities slid 3.7 percent to 501,606 contracts.