Posts filed under ‘Coffee’
The global spread of coffee growing and drinking began in the Horn of Africa, where, according to legend, coffee trees originated in the Ethiopian province of Kaffa. It is recorded that the fruit of the plant, known as coffee cherries, was eaten by slaves taken from present day Sudan into Yemen and Arabia through the great port of its day, Mocha. Coffee was certainly being cultivated in Yemen by the 15th century and probably much earlier. In an attempt to prevent its cultivation elsewhere, the Arabs imposed a ban on the export of fertile coffee beans, a restriction that was eventually circumvented in 1616 by the Dutch, who brought live coffee plants back to the Netherlands to be grown in greenhouses.
Initially, the authorities in Yemen actively encouraged coffee drinking. The first coffeehouses or kaveh kanes opened in Mecca and quickly spread throughout the Arab world, thriving as places where chess was played, gossip was exchanged and singing, dancing and music were enjoyed. Nothing quite like this had existed before: a place where social and business life could be conducted in comfortable surroundings and where – for the price of a cup of coffee – anyone could venture. Perhaps predictably, the Arabian coffeehouse soon became a centre of political activity and was suppressed. Over the next few decades coffee and coffeehouses were banned numerous times but kept reappearing until eventually an acceptable way out was found when a tax was introduced on both.
By the late 1600’s the Dutch were growing coffee at Malabar in India and in 1699 took some plants to Batavia in Java, in what is now Indonesia. Within a few years the Dutch colonies had become the main suppliers of coffee to Europe, where coffee had first been brought by Venetian traders in 1615. This was a period when the two other globally significant hot beverages also appeared in Europe. Hot chocolate was the first, brought by the Spanish from the Americas to Spain in 1528; and tea, which was first sold in Europe in 1610. At first coffee was mainly sold by lemonade vendors and was believed to have medicinal qualities. The first European coffeehouse opened in Venice in 1683, with the most famous, Caffe Florian in Piazza San Marco, opening in 1720. It is still open for business today. The largest insurance market in the world, Lloyd’s of London, began life as a coffeehouse. It was started in 1688 by Edward Lloyd, who prepared lists of the ships that his customers had insured.
The first literary reference to coffee being drunk in North America is from 1668 and, soon after, coffee houses were established in New York, Philadelphia, Boston and other towns. The Boston Tea Party Of 1773 was planned in a coffee house, the Green Dragon. Both the New York Stock Exchange and the Bank of New York started in coffeehouses in what is today known as Wall Street.
In 1720 a French naval officer named Gabriel Mathieu de Clieu, while on leave in Paris from his post in Martinique, acquired a coffee tree with the intention of taking it with him on the return voyage. With the plant secured in a glass case on deck to keep it warm and prevent damage from salt water, the journey proved eventful. As recorded in de Clieu’s own journal, the ship was threatened by Tunisian pirates. There was a violent storm, during which the plant had to be tied down. A jealous fellow officer tried to sabotage the plant, resulting in a branch being torn off. When the ship was becalmed and drinking water rationed, De Clieu ensured the plant’s survival by giving it most of his precious water. Finally, the ship arrived in Martinique and the coffee tree was re-planted at Preebear. It grew, and multiplied, and by 1726 the first harvest was ready. It is recorded that, by 1777, there were between 18 and 19 million coffee trees on Martinique, and the model for a new cash crop that could be grown in the New World was in place.
But it was the Dutch who first started the spread of the coffee plant in Central and South America, where today it reigns supreme as the main continental cash crop. Coffee first arrived in the Dutch colony of Surinam in 1718, to be followed by plantations in French Guyana and the first of many in Brazil in the state of Pará. In 1730 the British introduced coffee to Jamaica, where today the most famous and expensive coffee in the world is grown in the Blue Mountains.
The 17th and 18th centuries saw the establishment across Brazil of vast sugar plantations or fazendas, owned by the country’s elite. As sugar prices weakened in the 1820’s, capital and labour migrated to the southeast in response to the expansion of coffee growing in the Paraiba Valley, where it had been introduced in 1774. By the beginning of the 1830’s Brazil was the world’s largest producer with some 600,000 bags a year, followed by Cuba, Java and Haiti, each with annual production of 350 to 450,000 bags. World production amounted to some 2.5 million bags per year.
The rapid expansion of production in Brazil and Java, among others, caused a significant decline in world prices. These bottomed out in the late 1840’s, from which point a strong upward movement occurred, reaching its peak in the 1890’s. During this latter period, due mainly to a lack of inland transport and manpower, Brazilian expansion slowed considerably. Meanwhile, the upward movement of prices encouraged the growth of coffee cultivation in other producing regions in the Americas such as Guatemala, Mexico, El Salvador and Colombia.
In Colombia, where coffee had been introduced by the Jesuits as early as 1723, civil strife and the inaccessibility of the best coffee-growing regions had hampered the growth of a coffee industry. Following the “Thousand Days War” of 1899 to 1903, the new peace saw Colombians turn to coffee as their salvation. While larger plantations, or haciendas, dominated the upper Magdalena river regions of Cundinamarca and Tolima, determined peasants staked new claims in the mountainous regions to the west, in Antioquia and Caldas. New railways, relying on coffee for profit, allowed more coffee to be grown and transported. The opening of the Panama Canal in 1914 permitted exports from Colombia’s previously unreachable Pacific coast, with the port of Buenaventura assuming increasing importance.
In 1905 Colombia exported five hundred thousand bags of coffee; by 1915 exports had doubled. While Brazil desperately tried to control its overproduction, Colombian coffee became increasingly popular with American and European consumers. In 1914 Brazil supplied three-quarters of U.S. imports with 5.6 million bags, but by 1919 that figure had fallen to 4.3 million, while Colombia’s share had risen from 687,000 to 915,000 bags. During the same period Central American exports to the U.S. had risen from 302,000 to 1.2 million bags.
In spite of political turmoil, social upheaval and economic vicissitude, the 20th century saw an essentially continuous rise in demand for coffee. U.S. consumption continued to grow reaching a peak in 1946, when annual per capita consumption was 19.8 pounds, twice the figure in 1900. Especially during periods of high global prices, this steadily increasing demand lead to an expansion in production throughout the coffee-growing regions of the world. With the process of decolonisation that began in the years following the Second World War, many newly independent nations in Africa, notably Uganda, Kenya, Rwanda and Burundi, found themselves in varying degrees dependent on coffee export revenue.
For US coffee drinkers, the country’s wettest city, Seattle, has become synonymous with a new type of café culture, which, from its birth in the 1970s, swept the continent, dramatically improving the general quality of the beverage. This new found ‘evangelism’ for coffee has spread to the rest of the world, even to countries with great coffee traditions of their own, such as Italy, Germany, and Scandinavia, adding new converts to the pleasures of good coffee. Today it is possible to find good coffee in every major city of the world, from London to Sydney to Tokyo; we are drinking more and, more importantly, better coffee.
The importance of coffee to the world economy cannot be overstated. It is one of the most valuable primary products in world trade, in many years second in value only to oil as a source of foreign exchange to producing countries. Its cultivation, processing, trading, transportation and marketing provide employment for hundreds of millions of people worldwide. Coffee is crucial to the economies and politics of many developing countries; for many of the world’s Least Developed Countries, exports of coffee account for more than 50 percent of their foreign exchange earnings. Coffee is a traded commodity on major futures and commodity exchanges, most importantly in London and New York.
Exports are expected to be “no less” than 150,000 metric tons in the six months through July 7, the second half of Ethiopia’s fiscal year, Tesfaye Kenea, acting general manager of the association, said in an interview today in the capital, Addis Ababa.
Shipments in the first half totalled about 60,000 tons, 35,000 tons less than the same period a year earlier, Tesfaye said. Exports declined mainly because the crop was delayed for two months by a “lengthy” rainy season and because “the New York price is going down, but the Ethiopian price is not going down proportionally,” Tesfaye said.
Arabica coffee for May delivery has fallen 12 percent so far this year, and traded at $1.9920 a pound on ICE Futures U.S. at 9:43 a.m. in New York. Ethiopian buyers currently pay an average of $1.9883 per pound, according to data from the Ethiopia Commodity Exchange.
Ethiopia, Africa’s largest coffee producer, relies on the beans to generate about a third of its foreign-currency earnings. Exports of 196,119 tons brought in $841.7 million last year, according to the country’s Trade Ministry.
World coffee output over the last two seasons has beaten previous expectations by nearly 5m bags thanks to far-higher-than-expected production by Ethiopia, the birthplace of the bean, which has overtaken Colombia.
Global coffee output in 2010-11 was 134.2m bags, more than 1m bags higher than previously expected, the International Coffee Organization said.
For the current 2011-12 season, the production estimate was lifted by 3.8m bags to 132.4m bags.
The revisions reflected a massive upgrade, totalling nearly 6m bags, in output in Ethiopia, in whose Kaffa province the bean is believed to have originated.
The 9.8m bags that Ethiopia production is now believed to have reached in 2011-12 would rank the country “as the world’s third-largest producer after Brazil and Vietnam”, the ICO said.
In recent seasons, Colombia and Indonesia, have been battling it out for third rank, but with both unveiling a series of sub-par crops thanks largely to excessive rainfall blamed on the La Nina weather pattern.
The ICO gave no reason for its massive Ethiopian upgrades.
However, the rise in production, now seen doubling in three seasons, come amid a government drive to more than double coffee output in the five years to 2015 – a campaign which has received a tailwind from high bean prices which have encouraged investment in the sector.
Indeed, the production record contrasts with a commonly-held belief that Africa is likely to prove unable to fulfil its large potential in coffee, held back by political and climatological volatility.
Ethiopia is Africa’s largest coffee producer, while the bean itself is of huge importance to Ethiopia, which has more than 1m families dependent on the crop, which accounts for more than one-quarter of gross national product (GNP) and accounts for some 40% of exports.
The upgrade to the estimate for Ethiopian output offset small downgrades to production forecasts for Central America, which suffered heavy rains late last year.
Nonetheless, robusta coffee edged 1.3% higher to $1,854 a tonne in London on Monday, for the best-traded March contract.
New York commodity markets, where arabica coffee is traded, were closed for a public holiday.
Ethiopia grows overwhelmingly arabica coffee.
By William Davison
Exports from Ethiopia, Africa’s biggest coffee producer, surged 38 percent in the year through July 7 as shipments of the beans jumped, the Trade Ministry said. Total exports amounted to $2.8 billion in the period, the ministry said in a statement released yesterday in Addis Ababa, the capital. Coffee was the Horn of Africa nation’s biggest revenue earner, raising $841.7 million from 196,118 metric tons of beans shipped. Last year, the country exported 172,210 tons for $528.2 million, the ministry said. The increase was driven by a 40 percent rise in global coffee prices in the period, Helaway Tadesse, senior vice president at Zemen Bank in Addis Ababa, said in an e-mailed response to questions today.
Gold shipments increased by 75 percent, bringing in $485.3 million from 11 tons of the precious metal. “Based on the direction of gold prices, and various prospecting projects in the pipeline, mining exports could in a couple years time eclipse coffee and other agricultural products as Ethiopia’s primary exports,” Helaway said. The third-largest earner was oil seeds, though the 323.9 million earned was a drop of 9.5 percent from the previous year, according to the Trade Ministry. The narcotic leaf qhat, which is popular in neighboring Somalia and Yemen, saw a 14 percent increase in revenue, earning $238.4 million from shipments of 40,973 tons.
While Ethiopia’s exports are still an “unusually low” 8 percent of gross domestic product, the performance was “very strong and one which played a key part in removing foreign exchange shortages within the banking system last past year,”Helaway said.
* Earned $841.6 mln in 2010/2011
* Commodity exchange helps regulate transparent trading, prevent hoarding
* Global commodity prices rises push production levels
By Aaron Maasho
ADDIS ABABA, July 27 (Reuters) – Ethiopia earned a record $841.6 million from the export of nearly 200,000 tonnes of coffee in 2010/2011, trade data showed on Wednesday, thanks to lower output from traditional giants Colombia and Brazil and higher demand from India and China. Africa’s biggest coffee producer intends to boost its agricultural output by 2015, raising coffee to 700,000 tonnes from 300,000 tonnes, under a five-year economic development plan launched last year.
High global commodity prices and the introduction in 2008 of a commodity exchange market, which promoted transparent trading instead of a murky auction system, helped lift coffee production to 196,118 tonnes in the 2010/2011 fiscal year, exporters said.
Trade data from the Ethiopian Coffee Exporters Association said the revenue figure represented a 59 percent rise compared to revenue earned in 2009/2010 and 124 percent from 2008/2009. “The price has doubled over the year and farmers have reaped their fruit. Everone was encouraged to bring coffee to the local market,” said Hailu Gebrehiwot, an exporter and former head of the Ethiopian Coffee Exporters Association.
Prices for Ethiopia’s specialty Sidamo beans reached 1,500 Ethiopian birr ($88) for 17-kilograms in 2010/2011, up from 600 birr last year, Hailu added. The Ethiopian Commodity Exchange, which trades coffee, maize, sesame and white pea beans through an open outcry system, has said it was looking to introduce future and forward trading in a country where hoarding is common among traders wary of price volatility.
Coffee traders in Ethiopia have repeatedly held on to their stocks, reluctant to sell through the new exchange saying prices were too low, sparking authorities to warn of seizures. The government seized 17,000 tonnes of the crop in 2009 and revoked the licences of six exporters it accused of hoarding their stocks and waiting for prices to rise. “With the Ethiopian Commodity Exchange (ECX), the flow of coffee trading is streamlined – it means there’s less contraband business going on,” Hailu told Reuters.
Ethiopia prides itself as the birthplace of coffee. Some 15 million smallholder farmers grow the crop, mostly in the forested highlands in the huge country’s west and southwest. The Horn of Africa nation projects it will earn $3 billion in export revenue for 2010/11 (July-June) after a resurgence of coffee sales and diversification into new commodities earned $2 billion in the previous year. ($1 = 17.044
Ethiopian Birrs) (Editing by Yara Bayoumy)
By Getachew Teklu
Starbucks confirmed Wednesday it will raise the prices for bagged coffee sold at its U.S stores by 17% and 6% at its Canadian locations, effective July 12. Its move comes a day after J.M. Smucker /quotes/comstock/13*!sjm/quotes/nls/sjm SJM +1.22% raised prices for the fourth time in the past year. Smucker, which sells Folgers, Dunkin Donuts and Millstone, is upping those prices by
11%. Since May 2010, Smucker has jacked up prices 34% to try to stay a step ahead of the commodities market.
Starbucks is raising prices for a 16-ounce bag of coffee at its U.S. stores to a range of $11.95 to $14.95. It is the first price increase since September 2009. The last time Starbucks rose prices for bagged coffee at its Canadian locations was in October 2007. The Seattle company last year raised prices for some of its drinks to counter rising costs for milk and unroasted beans. And on March 18, Starbucks upped the price of its bagged coffee sold at supermarkets.
Green Mountain said May 3 it’s raising prices by 10%. That comes after a hike last fall of 10% to 15% on K-Cup portion packs used in the company’s Keurig single-cup coffee brewer. Over the past 12 months, coffee contract prices for Arabica beans are up 99% on the Intercontinental Exchange. The July contract recently traded at $2.65 a pound. That has prompted Maxwell House coffee maker Kraft Foods /quotes/comstock/13*!kft/quotes/nls/kft KFT +0.38% to raise prices three times since August 2010, an increase amounting to 43%. A Kraft spokeswoman said Wednesday they had no immediate plan to raise prices. Last September, Peet’s Coffee & Tea /quotes/comstock/15*!peet/quotes/nls/peet PEET -0.44% raised prices on beans sold in its coffee shops by 8% on average. Peet’s couldn’t be reached to comment on whether they planned another price increase.
T.M. Ward Coffee Co., based in Newark, has raised the prices of its wholesale beans by 50 cents twice this year and may raise them again, said owner Robert Sommer. Ward’s buys green coffee beans primarily from South and Central America, and Africa. The company roasts the beans at a facility in Connecticut and delivers to restaurants, cafe and other clients throughout the region. Production
in Colombia will likely drop 10 percent in the second quarter because of storms that battered farms last year, Luis Munoz, CEO of the Colombian National Coffee Growers Federation, told Bloomberg News yesterday. And political upheaval in Ivory Coast is affecting coffee crops in the African nation. Shipments of cocoa, sugar and coffee have been disrupted during fighting after a disputed presidential election in November, and farmers cannot return to their fields until the turmoil subsides. Other major exporting countries, including Ethiopia, Kenya and Indonesia, are facing smaller crops this year because of drought, flooding and other inclement weather.
By William Davison
Ethiopia, Africa’s biggest coffee grower, has threatened to ban exporters and producers caught hoarding beans or defaulting on contracts from trading on the domestic commodity exchange.
Those found holding surplus stocks in the hope of future price rises and therefore delaying deliveries are “stopping the country from getting the foreign exchange it could earn, making foreign buyers lose trust, and spoiling the country’s image,” Yakob Yala, state minister of trade, said in an April 29 letter to the Ethiopian Coffee Exporters’ Association. The directive, which was handed to Bloomberg News by an industry official, was confirmed by Amakele Yilma, a spokesman for the Trade Ministry.
Hoarding by traders is “harming the wide-ranging efforts of the government to grow the coffee sector,” Yakob said.
Ethiopia earned $528 million from its most valuable export in the year to July 7 and the Horn of Africa country plans to almost double revenue this year. Shipments totaled 3.64 million 60-kilogram (132-pound) bags of coffee between April 2010 and March 2011, ranking the country as the world’s eighth-largest exporter, according to the International Coffee Organization’s website.
Shippers who hold 54 metric tons to 500 tons of beans for two months without an export contract will be barred from buying from the state-owned Ethiopia Commodity Exchange for two months, according to the directive that took effect on April 28. Those holding more will be suspended for three months, it said.
The regulation isn’t “workable” because exporters have legitimate reasons to contravene it, said Fekade Mamo, a board member of the exchange and chief executive officer of Mochaland Import and Export Plc, a closely held coffee exporter. The process of delivering samples to buyers before a contract is signed may take more than two months and a “good” exporter would want to hold as much as 1,000 tons in stock ready to deliver, he said by phone on May 9 from Addis Ababa, the capital.
“The law has been drafted by someone who does not know anything about the coffee industry,” he said. “How do you expect the country to export over 400,000 tons this year without holding a working stock? It’s not a day-to-day business.”
Exporters who default on delivery contracts for shipments of more than 36 tons will be prevented from trading for six months, while for lesser volumes the buying ban will be three months, the directive said. If a producer with an export contract doesn’t deliver within one month of the agreed date, the National Bank of Ethiopia won’t process any of their contracts for two months, it said.
In March 2009, the government suspended the licenses of six exporters for hoarding coffee and selling export-grade beans on the domestic market.
To contact the reporter on this story: William Davison in Addis Ababa via Nairobi at email@example.com.
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International finance corporation the World Bank’s private-investment arm started a loan-guarantee facility worth as much as $30 million for Nib International Bank SC to support Ethiopia’s coffee industry.
The guarantee is expected to result in lending to an additional 70 coffee cooperatives in the first year and the production of an extra 3,542 metric tons of beans and 2,000 jobs over three years, IFC said today in a statement handed to reporters in Addis Ababa, Ethiopia’s capital.
The guarantee will enable NIB to provide loans worth as much as $12.5 million for the 2010 coffee season, increasing to $25-30 million by 2013, according to the statement.
“This facility reduces NIB’s financial risk of lending to coffee-farmer cooperatives and will go a long way to strengthen NIB’s commitment to expand support to small farmers in the coffee sector in Ethiopia,” the bank’s president, Amerga Kassa, said in the statement.
Ethiopia, Africa’s largest coffee producer, earned $528 million from shipments of coffee in the year to July 7, according to Ministry of Trade and Industry figures.
The agreement should boost the cooperatives’ incomes by as much as 30 percent by providing working capital and allowing them to purchase equipment such as wet mills for processing high-quality coffee, IFC Resident Representative Aliou Maiga told reporters.
The deal will support the Ethiopia Coffee Initiative that is targeting 160 cooperatives representing 90,000 farmers. The program is run by Washington-based TechnoServe and funded by the The Bill & Melinda Gates Foundation.
The not-for-profit organization initiated the loan- guarantee facility and will help the cooperatives access credit from NIB and provide technical assistance, Michelle Buckles, TechnoServe’s East Africa Regional Credit Manager, said today in an interview.
by Erica Westly
The highlands of southwestern Ethiopia should be ideal for growing coffee. After all, this is the region where coffee first originated hundreds of years ago. But although coffee remains Ethiopia’s number one export, the nation’s coffee farmers have been struggling.
The Arabica coffee grown in Ethiopia and Latin America is an especially climate-sensitive crop. It requires just the right amount of rain and an average annual temperature between 64 degrees Fahrenheit and 70 degrees Fahrenheit to prosper. As temperatures rise — Ethiopia’s average low temperature has increased by about .66 degrees F every decade since 1951, according to the country’s National Meteorological Agency — and rains become more variable, Ethiopian coffee farmers have suffered increasingly poor yields. Last year was especially bad, with exports dropping by 33 percent. Some have moved their coffee trees to higher elevations, while others have been forced to switch to livestock and more heat-tolerant crops, such as enset, a starchy root vegetable similar to the plantain. Read more here: http://www.guardian.co.uk/environment/2010/aug/27/coffee-threatened-beetles-warming
By Barry Malone
ADDIS ABABA (Reuters) – Resurgent coffee sales and diversification into other products lifted Ethiopia’s exports to a record $2 billion in 2009/2010 from $1.5 billion in the previous year, the trade ministry told Reuters on Friday.
“Coffee has bounced back to $528 million this year,” trade ministry spokesman, Amakale Yimam, told Reuters.
Ethiopia’s export total fell well short of the $2.9 billion predicted by Minister of Trade, Girma Birru, in an interview with Reuters in November.
But Amakale said the Horn of Africa nation projected $3 billion in export revenue for 2010/2011 based on growth in new export commodities.
“Diversification has also helped our exports,” Amakale said. “We’re going to make more money from leather products and vegetables and flowers … So we’re confident we can make $3 billion.”
In 2008/2009 (June/July), coffee earnings in Africa’s biggest coffee exporter slumped to just $375.8 million after bad weather obliterated entire crops in some growing zones.
Exports last year were also shaken by Japan’s insistence on testing beans on arrival after it found some were contaminated with pesticides. Japan, which buys almost 20 percent of Ethiopia’s beans, has resumed imports.
Ethiopia prides itself on being the birthplace of coffee. Some 15 million smallholder farmers grow the crop, mostly in forested highlands in the west of the country.
Coffee accounted for some 60 percent of Ethiopia’s foreign exchange revenue in the 2007/2008 season, when it earned more than $525 million in export revenue.
Despite the rebound, coffee exports amounted to little more than a quarter of the total in 2009/2010, the figures showed.
Flower exports accounted for $158 million in 2009/2010, an increase of 20.9 percent, Amakale said. Vegetable exports were just $32 million, but the sector is seen by the government as an industry with strong potential growth.
Ethiopia’s exports were also boosted in 2009/2010 by growing sesame exports and by buoyant foreign sales of a narcotic leaf known as khat, Amakale said.
Ethiopia this year earned $209 million from khat, a 50 percent increase on 2008/2009, and $129 million from sesame — a boost of 30 percent. Ethiopia is the world’s fourth-largest sesame exporter after China, India and Myanmar.
Gold exports tripled to $300 million dollars in 2009/2010, Amakale said.
The country has made $450.5 million from about 48 tonnes of gold exports in the last 10 years, according to the central National Bank of Ethiopia.
The only export commodity that showed a fall in revenue was leather.
“We earned $56.5 million from leather this year, which was a 25 percent decrease,” Amakale said. “But that is because we are in a transition phase, trying to move from exporting raw material to finished goods like handbags and shoes.”
The Ethiopian government predicts growth of about 10 percent for 2010/2011. The International Monetary Fund says the economy will grow by 7 percent.
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