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Coffee and Tea Reports from the Front Lines

WTO Aims to Protect Tea

India - There has been an EU proposal that the World Trade Organization should extend "enhanced protection" that is already provided to alcohol, to geographic-specific products such as Darjeeling tea, reported the Economic Times. recently. Another EU initiative which was presented to WTO council proposed that a global register be created by the end of 2003 to guarantee the origin of high quality products. Currently the producers have to register their geographical location in every country where they want to market it.

New York-based professor and writer for Tea & Coffee Trade Journal Randy Altman, who is currently advising the Darjeeling Planters' Assoication (DPA), says Darjeeling can compete in the modern marketing realms, the new intellectual property regimes enforced by WTO, the EU and other global bodies.

"Darjeeling is also showing India that trendy software or highly-touted telecommunications need not necessarily be the only ones which are bringing in hard currency. India has much to offer in agricultural riches," Altman said.

Complimenting DPA's hard work in the area of promoting Darjeeling tea, he said the organization is helping to maintain regional brand-name recognition in the increasingly competituive arena of export globalization. However, he cautioned that the next step was vigilance against the infringement and willingness to take action. "The tool must be weilded to attain actual power in the global marketplace," he said. He said India has historically been slow to take advantage of branding of agriculture for export, while software and other hi-tech items have gained all the glory in the recent past. Now, Darjeeling is proving the old-industry backbones of India have brands that can increase currency inflows.

Brazil Grows Super Crop
Brazil - One of the speakers at the 12th Santos Coffee Seminar in May 1998 predicted that the coffee world was facing a long-term cycle of low prices. Based on an expected increase in stocks in consuming and producing countries plus an increase in new plantings, stimulated after the escalation of prices following the 1994 Brazil frosts; he forecast a severe supply surplus over the next coming years. Market prices over recent years has dramatically confirmed the prediction with world coffee prices dipping to their lowest levels in over 30 years.

The two main reasons for the drastic market decline and supple surplus were the phenomenal increase in Vietnam production and exports and the explosion of new plantings in Brazil creating a cycle of surplus crops. The 2002/03 crop now being harvested is expected to be the largest coffee crop in the history of Brazil.The latest official estimate by CONAB, the National Supply Agency, calculates a production of 44,690 million bags consisting of 34,935 million bags of Arabica (78.2%) and 9,755 million bags of Conillons (21.8%).The previous record crop of 1987/88 was estimated officially at 42.9 million bags.

CONAB also estimates the Brazilian coffee park as of June/02 at 6.1 billion trees with 4.7 billion in production and 1.4 billion in formation.This has grown from an estimated 4.8 billion trees in the mid 1990’s with the largest expansion of new plantings in the States of Minas Gerais, Espirito Santo, Bahia and Rondonia.

It should be noted that Brazil is not only the world's largest coffee producing country (38%) and exporting country (31%) but also the second largest consuming country with an off-take of about 13.5 million bags. This means that with normal exports and domestic consumption Brazil needs yearly crops of 38 to 40 large crop is normally followed by on off-year reduced crop.T he first estimates of the 2003/04 crop are in the area of 35 to 37 million bags which with the estimated disappearance could mean a reduction of some of the stocks in Brazil. This feature combined with crop diversification and grower decapitalization in Brazil and other producing countries resulting in lower yields especially of Arabica qualities cold mean, in the opinion of some of the trade, the beginning of the end of the cycle of low prices in late 2003 or yearly 2004.

August 2002 was a record month for Brazil coffee exports reaching a total of 2,804,364 bags (green and soluble) and breaking the previous record of 2,766,000 bags exported in December 1976.

This performance helps to maintain the prediction of CACAFE (Council of Brazilian Green Coffee Exporters) estimating exports of 27 million bags for the calendar year 2002.

Brazil’s coffee exports this year have been encouraged and helped by the largest crop in Brazilian history plus a very competitive exchange rate with a devaluation of the export “Real” at 44.7 since January 2002.
- Harry C. Jones

Central America Speaks Out on Coffee Crisis
Guatemala - A seminar and workshop was held recently by the Central American Parliament called "The Coffee Crisis, a Regional Problem." The event was took place at Anacafe´s headquarters in Guatemala City with delegates coming from Honduras, El Salvador, Panamá, Dominican Republic, Nicaragua and Guatemala. Deputies of the Central American Parliament met with the various coffee sectors of Central America and the Dominican Republic, to discuss the problem. Below we reprint the event's concluding remarks, provided by Anacafé.

Considering:

  1. That the Region should visualize the coffee situation as an integrated block, that will be characterized by its quality, efficiency and the information it handles, will allow to be protagonist in the introduction of new markets, generating employment, social, environmental and economic benefits for all the Central American people, therefore, it should receive the support of the governments as well as national and international institutions, framed in the strategies and negotiations in a global level.

  2. That because of these social, economic, environmental and politic effects of the coffee crisis, it is a problem that not belongs to a single sector, but to the countries that produce together and so, and that these effects also cause problems to the importing countries.

  3. That for the experience, cultivating coffee culture, coffee

    production in the high economic, environmental and social value of the Region, it constitutes a natural platform that will direct our nations to more diversify economies.

    We, parliamentarians of the Central America Parliament agree to present the content ofthis declaration to our general assembly:

    First: The Central American Parliament will make all the necessary efforts so that the governments and parliaments of the World as well as the international public opinion will understood the human drama that the people of the Region is living, as a result of the coffee crisis and the decrease in the prices settled to the coffee producers. The Central American Parliament will exhort the Central America and Dominican Republic Governments so that in a short time they lend greater attention to this crisis.

    Second: Agree to constitute the Central American Coffee Community as a regional institution that will establish the bases to a true regional union and allow a better commercialization of Central American coffee in the international market, as well as entrust the Central American Parliament the process of consult the governments, coffee organizations and other sectors involved to promote the creation of this Community.

    Third: To enforce the international cooperation at the International Coffee Organization (OIC) frame, because this Organization has the potential to apply solutions with a global reach.

    There is necessary that the importing countries have a bigger compromise to solve this structural problem applying control systems to the imports. The incorporation of the United States of America to the OIC is a very important key to these effects, because this country is the major coffee consumer in the World.

    Fourth: Agree to ensure the multilateral organizations of technique and financial cooperation to promote the diversification programs of incomes with a global perspective as a strategy to enlarge the comparative advantages of the Region in another sectors of economy.

    Fifth: In connection with the Central American Parliament seek multilateral support to develop a market that allow the environmental services recognition to coffee production as well as to achieve the goals of sustainable of the natural resources and the environment of the Region.

    Sixth: Prompt a joint campaign of promotion with two basic elements:

    • Differentiation of Central America coffee.
    • Promotion of the internal consumption.
    Seventh: Request to the European Parliament, the United States of America Congress and the Legislative Cameras of Japan, Canada and other members of the International Community to give the Central America Parliament their economic and financial support, so that the creation of a Central America Coffee Community can be established as a first step to the Central America union.

    Eighth: In this context, the Central American Parliament will promote the alliance with the coffee productive sector in the Region, and will contribute with all the political influence in the development and following up of these agreements.



Tea & Coffee - November/December 2002
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