Coffee News

By the estimate of the International Coffee Counsel, during the season of 2006-2007 a record harvest of this product will be gathered in the world. The coffee harvest is forecasted to be on the level of 120 million nominal bags (1 nominal bag is 60 kg), which is almost 20 percent greater than during the previous season. But the high level of coffee harvest won't decrease its price.

It is predicted that Brazil will keep its leading position in this industry sector: during the season of 2006-2007 40.6 million bags of coffee will be gathered (which is almost 32 per cent of the world crop). Its production will also grow in the majority of other countries of Latin America, as well as in Ethiopia, Eritrea and Yemen - main producers of the Mocha variety. Growth of coffee production is also expected in Sudan, India and Madagascar. During the season of 2006-2007 the share of Robusta variety in the harvest of Brazil will amount to 9.6 - 10 million bags, and the share of Arabica to 30 - 31 million bags. The share of Robusta variety in the world coffee production is also steadily growing.

But the experts of the U.S. Department of Agriculture suggest that the world consumption of coffee in 2006 will decrease from 119.6 to 116.6 million bags compared to 2005. But the world coffee prices in the 2006 calendar year will stay as high as in 2005. It is expected that the world carry-over stock of coffee in 2006 will amount to 20.3 million bags: it will be the lowest in the last four seasons, and because of this the price of coffee will not significantly decrease this year.

After reaching its high in the 1st quarter of 2006 - almost 125 cents per pound, the world prices of coffee dropped to 103 - 110 cents per pound during subsequent months. But they are gradually increasing again since May, which is among other things caused by prognoses of a prolonged drought in many of coffee-producing countries. As it is suggested by the International Coffee Counsel and the U.S. Department of Agriculture, in the long term coffee prices will reach new highs at 143 cents per pound and in the medium term they might meet resistance at the level of 121 - 124 cents per pound or 132 - 135 cents per pound. The coffee prices are also stirred up by the tensions between the U.S.A. and Venezuela, Bolivia and Cuba, civil wars in Columbia, in the northern part of Guatemala, Peru, in the east of Honduras and in the south of Mexico: the combined share of these countries in the world coffee export now reaches 30 percent.

The distribution of coffee in domestic coffee markets of importing countries has been long before monopolized by their procuring and processing companies. And the producers of coffee are basically refused free access to domestic markets of foreign countries, and because of this the difference between procurement and purchasing prices (for example, in Latin America) and retail and consumer prices (in Western and Southern Europe) for, say, ground coffee, has been exceeding 350 percent for decades. By expert estimates, independent access of coffee-producing countries and companies to consumer markets in the EU region, Eastern Europe, Canada, Japan and Australia would decrease world and domestic prices in the importers mentioned for 25 - 40 percent. But - in the first place - this scenario wouldn't interest dummy speculative purchasing companies created by importing corporations to debar coffee-producing countries from transactions in foreign coffee exchanges.

Our information

Europeans have first met coffee in 1690, when the Dutch acquired coffee seeds in the Mocha port in Yemen and shipped them "for distribution" to Dutch colonies Indonesia and Ceylon, which have become the main coffee Klondike of the planet for a long time. But in about 70 years some insects killed all the coffee plants there (after which Ceylon had to turn into a tea plantation). Growing coffee in Latin America started only in the XVIII century.