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Coffee and Tea Reports from the Front Lines

Coffee Production Rises in El Salvador, Honduras

El Salvador - El Salvador’s coffee exports in the 2003-04 season grew a modest 0.7% from the previous harvest, and revenues from coffee sales abroad rose for a third consecutive year amid stronger prices.

The San Salvador-based Coffee Council said coffee exports in the 12 months ending September 30 totaled 1.77 million 46-kg bags, versus 1.76 million bags in the 2002-03 cycle.

Most of the exports went to the U.S., and Germany was the No. 2 destination, with 26%. Revenues jumped 16% in the season to $121 million, as average bag prices reached $68.40, up from $59.60 a bag in the previous year. The council’s export chief, Tomas Bonilla, said prices recovered for the third consecutive cycle from a low point in 2000, when a coffee glut sent bean prices on a downward spiral.

In neighboring Honduras, coffee exports jumped by 15% due to higher prices. The Honduran Coffee Institute in Tegucigalpa reported that exports in the 12 months ending September 30 totaled 2.79 million 60-kg bags versus 2.44 million bags in the 2002-03 harvest. In September, the final month of the crop cycle, exports increased 50% to 62,590 bags, up from the 41,752 bags exported a year earlier.

According to the Institute, the increase in exports reflects higher production and improved world prices. When prices are low, significant quantities of Honduran coffee beans are smuggled to neighboring countries, where higher prices are paid for what is perceived to be better coffee.

Meanwhile, Panama’s coffee production will slip as much as 8% in the 2004-05 harvest from the current season, says the country’s Ministry of Agriculture.

In a preliminary report, the ministry has forecast production at around 224,040 46-kg bags in the coming cycle, below the 243,231 bags produced in the 2003-04 season that ended Sept. 30. The decline is related to a protracted price crisis as well as damage from erratic weather.

In Panama as elsewhere in Central America, a growing number of coffee farms are being abandoned amid a coffee glut that has depressed prices since 1999. Between 1980 and 2004, the area in coffee production has dropped to 19,000 hectares from 21,000, mainly in the top producing region along Panama’s border with Costa Rica.

Panama’s association of coffee exporters also forecasts a drop in sales next year, though it anticipates better prices, especially for gourmet coffee brands.

- By Larry Luxner

Cup of Excellence Auction Prices Stun Bolivian Farmers

Bolivia - At the first Bolivian Cup of Excellence, in less than three hours, worldwide bidding was over. But coffee that started out at a modest opening price of $1.20 ended up being sold at record-breaking prices. Only 2 of the 13 lots sold for less than $5.00/lb. and all 3 presidential award coffees were purchased for at least $10.00/lb.

This was one of the smallest auctions by volume held by Cup of Excellence since its beginning in 1999 but the highest average prices to date at $7.07/lb There were 13 winning coffee lots auctioned today with a relatively small number of bags. Bidding however remained strong throughout the auction with the coffees being bought by Japanese, European and U.S. roasters who were willing to pay whatever it took to introduce these unknown coffees to their customers.

For the Bolivian farmers who were watching the auction live at three different locations the prices were nothing short of amazing. Never has a coffee from Bolivia fetched a price anywhere close to this. All of the auctioned coffees were produced by small farmers who in many cases had been discouraged by their neighbors. “They told me I would never win, but I am a very determined woman and decided to ignore their comments and concentrate on processing my coffee well,” explained Yolanda Lourdes Condori to the gathered farmers. Her coffee received over $6.01lb with a total payout multiple times an average year’s wages.

This is the 15th Cup of Excellence program to date. For more information log on to www.cupofexcellence.org.

Smaller Crop, High Quality After Drought

United States - While the crop yield will be smaller in Hawaii this year, it will be of excellent quality and prices are up, officials projected last December.

The latest report from the Hawaii Agricultural Statistics Service indicates the statewide coffee production will be down 14% from last season’s 8.3 million-pound harvest.

But last year, farmers in Kona were selling a pound of cherry coffee for 65 cents. That figure has doubled, officials say, Last year’s drought conditions meant the trees did not grow much. Also, some parts of the Kona coffee belt experienced heavier rains this year that affected the spring flowering season and extended the harvesting season.The combination of drought followed by increased rain has resulted in a smaller harvest but also led to the higher quality.

Tea & Coffee - January/February, 2005


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