Coffee

Summary

World coffee production in 1997/98 is forecast at 102.6 million bags (60 kilograms or 132.276 pounds each), about unchanged from the 1996/97 level, but down 1 percent from the June forecast. Brazil's production in 1997/98 is forecast at 26.0 million bags, down 2.0 million bags from the revised 1996/97 level and the June forecast. Colombia's 1997/98 coffee crop is forecast to rise 11 percent from the previous year.

Total supply in producing countries in 1997/98 is forecast at 131.9 million bags, down nearly 4 percent from the preliminary 1996/97 level. A large part of this decrease is forecast to result from a reduction in beginning stocks. Beginning stocks for 1997/98 are estimated at 28.3 million bags, down 14 percent from 1996/97. In 1996/97, total production had significantly recovered from the reduced crop of 1995/96. However, total supply for 1996/97 was up only 4.4 million bags, while total coffee exports were up 8.7 million bags, leading to another drop in 1996/97 ending stocks for producing countries.

World coffee exports in 1997/98 are forecast at a record 84.6 million bags, up less than 1 percent from the 1996/97 level, mainly as a result of the reduced supply in producing countries. During 1996/97, coffee exports were high as producing countries capitalized on high prices, and Brazil recovered from its 1995/96 reduced crop. In 1996/97, Brazil's higher level of coffee exports accounted for a large part of the total increase year-to-year.

World coffee consumption in 1996/97 is estimated at 105.6 million bags; 80.9 million bags in importing countries, and 24.7 million bags in exporting countries. This compares with an estimated 100.1 million bags in 1995/96. Use in producing countries in 1997/98 is forecast up nearly 5 percent. Brazil accounts for the majority of the increase.

Exportable production (total production less domestic consumption in producing countries) of coffee in 1997/98 is forecast at 77.2 million bags, down nearly 2 percent, or 1.3 million bags. Most of the decline in 1997/98 from the previous year is attributed to Brazil, where exportable production is forecast to decrease to 14.0 million bags, versus 17.0 million bags the previous year.

Brazil
The world's largest coffee producer is projected to produce 26.0 million bags in 1997/98, down 7 percent from last season's revised 28.0-million-bag harvest and the June forecast of 28 million bags. Arabica coffee production is estimated at 21.2 million bags, while robusta coffee production is estimated at 4.8 million. The 1996/97 crop estimate for Brazil was revised up 500,000 bags from the June 1997 estimate, based on steady and strong exports during the 1996/97 marketing year.

Factors accounting for the lower 1997/98 production forecast in relationship to 1996/97 are: 1) coffee trees in the off-year cycle had less flowering and fruit formation; 2) irregular weather patterns adversely affected fruit formation; and 3) increased green cherries in some areas contributed to lower dehusking yields. Partially offsetting the 1997/98 decline were: 1) favorable weather and good growing conditions in many coffee producing areas; 2) high grower prices that resulted in improved cultural practices coupled with an increase in production inputs; 3) an increase in harvested area and bearing bushes from last season; 4) an increase in high density plantings showing improved yield potential; and 5) the recovery of coffee trees that were pruned following the 1994 freeze.

The crop quality of Brazil's 1997/98 harvest is considered fair, despite the initial problems of excessive rainfall at the beginning of the harvest season and the higher level of green cherries that resulted from irregular flowering that occurred during August to December 1996.

Brazil's exports of coffee in 1997/98 are forecast at 18.5 million bags. Of that total, 16.0 million bags of green coffee and 2.5 million bags of soluble coffee exports are forecast. The total represents a decline of 2 percent from 1996/97. However, green coffee exports are forecast down nearly 4 percent, or 590,000 bags, to 16.0 million bags. Soluble coffee exports are forecast to increase to a more normal level after dropping 14 percent in 1996/97. Exports of all coffee in 1996/97 were 18.9 million bags. Coffee bean exports were 16.6 million bags, exceeding the 15-million-bag quota established by the Association of Coffee Producing Countries (ACPC). Exporters took advantage of good international prices and higher production levels.

According to a study by the Brazilian Association of Coffee Roasters (ABIC), 79 percent of all Brazilians drink coffee. The study also showed that 82 percent of all coffee consumed in Brazil is purchased in supermarkets. In addition, coffee consumption has risen since 1991, when ABIC did a similar survey. Also, ABIC has sponsored courses to promote coffee consumption by promoting the expansion of coffee bars, coffee consumption in restaurants, and training of hotel managers through the launching of Coffee Preparation Centers (CPC). Brazil's domestic use of coffee in 1997/98 is forecast up 1.0 million bags, to 12.0 million bags.

Brazil continues to offer government-owned stocks through its auction system.

Colombia
Colombia's 1997/98 coffee production forecast of 12.0 million bags is up 11 percent from the revised 1996/97 crop of 10.8 million bags and up 6 percent from the June forecast. The revision for the 1996/97 Colombian coffee upward by 500,000 bags was due to significantly higher grower prices which provided incentives to harvest more thoroughly.

After considerable pressure by producers to readjust grower prices upward, new grower prices and new formulas for setting grower prices were established in February 1997. Under this new formula, grower prices are revised weekly based on the international price for Colombian coffee during the previous 10-day period.

Coffee yields are projected to increase in the current 1997/98 season due to improved weather and better crop management practices prompted by higher coffee prices. Although coffee zones in the states of Caldas, Risaralda, and Quindiio were dry this past July and August, affecting the size and filling of coffee cherries, weather in the dominant coffee producing state of Antioquia has been favorable. Although there is much speculation about the adverse effects of El Nino on coffee production, historical data show that this phenomenon has had only a marginal impact on Colombia's coffee production. Coffee in Colombia is cultivated in areas where the topography is mountainous and weather patterns are subject to microclimates. The timing of precipitation, or lack of it, is a critical factor in crop outturn. If it is dry during the flowering period, trees may delay their bud formation until rains arrive. Once it begins to rain, trees are likely to have a normal flowering and bud growth which could produce a heavy crop if followed by sufficient rainfall for cherry development. If dryness prevails, trees are likely to abort their cherries or yield underdeveloped cherries.

In order to assist those coffee growers affected by quality problems resulting from the dry weather in July-August 1997, a grower price stabilization fund was authorized. The total quantity of coffee expected to receive payments is estimated at 200,000 to 500,000 bags.

Colombia's total exports of coffee in 1997/98 are forecast at 11.3 million bags, down less than 1 percent from the 1996/97 level, but up 500,000 bags from the June forecast. Estimates for Colombia include some coffee that reaches international markets through neighboring countries. Exporters in Colombia attempted to maximize their export earnings in 1996/97, and reports indicate that Colombia exceeded its ACPC quota. Coffee exports during 1996/97 are estimated at 11.3 million bags. Colombia was able to export more coffee than it produces by drawing down stocks. Ending stocks at the end of 1996/97 are estimated at 4.3 million bags, down 2.1 million bags from the previous year. Stocks are forecast to continue to decline in 1997/98.

Indonesia
Coffee production in 1997/98 is forecast at 7.1 million bags, down 10 percent from last year's revised estimate but up 4 percent from the June forecast. There is a wide ranging debate in Indonesia's coffee industry about how much production will decline in 1997/98. Some trade and industry officials predict a drop of 10-20 percent from the 1996/97 level to a range of 6.3 to 7.1 million bags. However, based on information now available it appears production will reach 7.1 million bags. The decline from last year is due to excessive rains and strong winds which occurred last year in several high elevation areas in southern part of Sumatra. Coffee flowers were destroyed and the fertilization level in soils decreased in this area that accounts for 50 percent of total production.

Due to the long drought persisting in many coffee producing areas since June 1997, coffee production for 1998/99 may decline from the record level set in 1996/97. Normally, showers during July-September help create sufficient humidity for coffee trees to form flowers. However, the relative humidity in some coffee producing regions has been less than 50 percent which causes high water evaporation in coffee trees. In East Java, where about 10 percent of the coffee is produced, very low humidity has promoted the growth of mealy bugs, which attack coffee flowers. The excessive rains and strong winds destroyed some coffee flowers and decreased the fertilization level in plant soils. Coffee production in East Java is also expected to decline by about 20 percent due to the off-year production cycle. The Government of Indonesia's coffee production policy continues on course regarding rehabilitation and intensification on existing areas rather than on expanding planted area.

Indonesia's exports of coffee during 1997/98 are forecast at 5.0 million bags, down 1.4 million bags from the previous year, but up 400,000 bags from the June forecast. According to trade sources, exports during April through September 1997 reached 3.3 million bags, compared with 3.5 million bags in the same period of 1996. Indonesia exports almost all of its coffee in green-bean form. However, this level of exports will be lower than Vietnam's level of exports and Indonesia is forecast to lose its status of the world's largest robusta exporter.

Domestic consumption of coffee in Indonesia during 1997/98 is forecast to grow only slowly to 2.1 million bags, less than 1 percent above the revised 1996/97 number of 2.08 million bags. This is despite efforts by local roasters to promote coffee in the domestic market and increase the number of coffee shops in the big cities. Per capita coffee consumption in Indonesia remains low compared to other countries.

Vietnam
Vietnam's production of coffee during 1997/98 is forecast at 5.8 million bags, up 800,000 bags from the June 1997/98 forecast, and up 15 percent from 1996/97. Vietnam's exports of coffee during 1997/98 are forecast at 5.5 million bags. This represents an increase of 12 percent, or 600,000 bags from the 1996/97 level. As Vietnam's production of coffee grows, so do its exports. If realized, the level of exports in 1997/98 will surpass Indonesia's, making Vietnam the largest exporter of robusta coffee.

Mexico
Coffee production in 1997/98 is forecast at a record 5.5 million bags, 4 percent above the revised 1996/97 crop of 5.3 million, but 4 percent less than the June forecast. The June projection was lowered as a result of the damage caused by dry weather and the recent hurricanes which affected Mexico's coffee producing states of Oaxaca and Chiapas. The production forecast was revised downward to reflect lower expected lower yields on plantations from large and medium coffee growers.

Mexican coffee production for 1995/96 was revised slightly downward to reflect official government numbers. Coffee production for 1996/97 is revised downward to reflect updated figures from government sources and information gathered from established coffee contacts. Planted area for 1997/98 is expected to increase slightly due to export demands and high international coffee prices. However, these new plantings will not come into production until the year 2000. Due to increased grower returns, small producers are expected to improve tree care because of their increased incomes, thus resulting in higher yields. Rust and Broca, reported in several coffee producing areas, have affected yields, but have not caused significant damage to coffee plants. These pests, rust a disease and Broca an insect, are present in nearly 390,000 hectares. Coffee quality is anticipated to improve slightly for 1997/98 because of improved cultural practices.

Mexico's exports of total coffee in 1997/98 are forecast at 4.6 million bags, up 4 percent from 1996/97, but down 200,000 bags from the June forecast as a result of the reduced supply. Exporters in Mexico estimate that coffee prices will remain favorable for exports versus the domestic market. Mexico exports a large part of its total to the United States. Domestic consumption during 1996/97 declined over 8 percent from the previous year as a result of higher domestic coffee retail prices and weak consumer purchasing power. Consumption is forecast is decrease again in 1997/98 as price increases are forecast for the domestic market and because of the inability of domestic processors to compete for coffee supplies.

Guatemala
Coffee production for 1997/98 in Guatemala is forecast at a record 4.28 million bags. This is a relatively small increase compared to recent years and nearly the same as the revised 1996/97 crop of 4.275 million bags. March and April precipitation was near normal, but May was an unusually dry month followed later by excessive rains in October. Many producers reported that ripe fruit fell to the ground due to the heavy October rains. The projected harvested area and the number of bearing trees in 1997/98 at 250,000 hectares and 755 million trees, respectively, is unchanged from the previous season.

Most coffee produced in Guatemala is washed arabica and classified as good-washed, extra-good washed, prime-washed, extra-prime washed, semi-hard bean, hard-bean, and strictly-hard bean. Coffee production is the most important sector in Guatemala's economy. The coffee sector employs approximately 40 percent of the agricultural farm labor and contributes approximately 7 percent to Guatemala's gross national product.

Guatemala's exports of coffee during 1997/98 are forecast at 4.2 million bags, up 163,000 bags from the June forecast, but about unchanged from the 1996/97 level. Guatemala's trade includes some cross-border movement of coffee from Honduras. The exact amount of these "cross-border" movements is unknown. However, during 1996/97 these cross-border movements are estimated at 195,000 bags. In 1997/98, these movements are forecast to increase to 250,000 bags.

Cote d'Ivoire
Coffee production in 1997/98 is forecast at 4.2 million tons, down 10 percent from last year's record level. Field visits indicated that coffee harvesting has started, but a considerable portion of the crop remains unripe. Field observations suggest that production will be lower than last year. The expected lower harvest will be minimal in the west, center-west, and south-west where new plantations are entering production and the effects of the drought were minimal during the cherry formative period. For the remaining producing areas, the production decline is expected to be substantial, especially in the east and parts of the south where old coffee varieties are predominant. The drought of July to September 1997 is expected to have an adverse effect on crop quality because it coincided with the period of cherry development resulting in improperly formed kernels in cherries.

Cote d'Ivoire's coffee season opened on December 18, 1997. Agriculture officials also announced that the reference farmgate price will increase by 20 CFA francs per kilo, to 520 CFA francs per kilo. The 1996/97 coffee season closed on December 16, 1997.

There are conflicting production estimates for the 1996/97 coffee crop. While official pronouncements put production at 5.33 million bags, official statistics based on arrivals at the port estimate it at 4.667 million bags.

Cote d'Ivoire's exports of coffee during 1997/98 are forecast at 4.6 million bags, up 971,000 bags from 1996/97 and up 98,000 bags from the June forecast. A part of this increase in exports is the result of higher ending stocks in 1996/97. The level of coffee exports during 1996/97 has been revised down to 3.6 million bags. The demand for high quality coffee and the low quality of Cote d'Ivoire's supply accounted for the reduced exports. For the first 9 months in 1997, only 40 percent of coffee exports were classified as superior compared with 72 percent superior for the same period of 1996.

Kenya
1997/98 coffee production is forecast at 1.5 million bags, up 36 percent from the revised 1996/97 crop, but down 12 percent from the June forecast of 1.7 million bags. Total coffee exports during 1997/98 are forecast at 1.6 million bags, up nearly 16 percent from 1996/97.

Costa Rica
Coffee production for 1997/98 is estimated at 2.46 million bags, up 3 percent from last season, but down 4 percent from June. The Costa Rican Coffee Institute (ICAFE) issued a new estimate of 2.46 million bags for the 1997/98 crop. The new estimate is based on ICAFE's evaluation of the crop's progress in different areas of the country. The estimate was reduced because of lower- than-expected production from the first areas harvested. Most of the coffee will be harvested in December throughout the central valley, but production will extend into March 1998 in the late ripening areas.

Honduras
1997/98 coffee production is forecast 2.5 million bags, up 8 percent from that produced in 1996/97, but down 4 percent from the June forecast of 2.58 million. However, as in 1996/97 the new estimate may not become a reality if the weather does not cooperate. Abnormal rainfall could stunt the growth in Honduras's 1997/98 crop.

Despite early prospects of establishing a new record for 1996/97, the crop merely inched forward from the previous year. The 2.28-million bags produced during this period fell short of initial expectations by over 200,000 bags. Wet weather and cold spells in the late 1996 and early 1997 greatly offset expected production increases due to increased area and improved cultural practices.

El Salvador
Coffee production for 1997/98 is estimated at 2.38 million bags, down 5 percent from last year and 9 percent less than forecast in June. According to the foundation for coffee research (PROCAFE), the 1997/98 crop is not expected to exceed 2.38 million bags. Unusual rains during the harvest season have concerned growers about the quality of their coffee beans.

Ecuador
The 1997/98 coffee production forecast is 1.45 million bags, down 17 percent from the 1.75- million-bag crop of last year and down 24 percent from the June forecast of 1.9 million. This reduction is due to the adverse weather during the growing season.

Central America
Central American coffee nations and Ecuador have opted to lower exports during July-June 1997/98 to 8.57 million bags, down from the previously assigned quota of 8.92 million bags. This was broken down into a July-December quota of 3.454 million bags. However, second half quotas were not announced, but they could not exceed 5.12 million bags in order to meet the full year quota. The breakdown by country is: Costa Rica, 1.2 million bags; El Salvador, 826,000 bags; Ecuador, 780,000 bags; Honduras, 506,000 bags; and Nicaragua, 142,000 bags. Previously, the quota had been 3.1 million bags for the first half and 5.82 million bags for the second half (January through June 1998).

United States
U.S. coffee stocks at the end of November totaled 1.5 million bags, down 396,000 bags from the revised October 31, 1997, level. Details follow:

Switzerland
Switzerland announced that it would adopt a uniform green coffee import tariff of 37.40 Swiss francs per 100 kilograms, as of January 1. Switzerland has been charging 37.40 Swiss francs from developing countries and 42.50 francs for developed countries. The Economics Ministry said this difference caused problems for exporters because most green coffee arrives in mixed shiploads.

Cocoa

The following is taken from "AgExporter", a publication of the Foreign Agricultural Service (FAS). It is by Frances Wei, Administrative Assistant with the FAS Agricultural Trade Office in Shanghai.

Chinese Newlyweds Love Chocolate Kisses

During and after a Chinese wedding, the newlyweds present little gifts of Xi Tang to friends, relatives and well wishers. Literally, Xi means happiness and Tang means candy. A tradition that began long ago, the gift represents the happiness and sweetness of the couple's new life together.

For many years, Xi Tang has been packaged in a small red plastic bag with the Chinese character for "double happiness" printed on the outside. The bag contains 8 pieces of candy. The number "eight" is considered lucky because it rhymes with "wealth" in the Chinese language.

Many couples now choose chocolates over the traditional Xi Tang candies, for more than their taste appeal. The attractive packaging of the chocolate also plays a significant role in its selection.

The local Xi Tang market is lackluster, held mostly by local products. The domestic "White Rabbit" brand, with eye-catching packaging, leads local brand sales. Only the Taiwan candy brand, "Yuan Zu," has ever been promoted specifically in this gift category.

With the right package design and the right Chinese partner to distribute and promote their product, U.S. chocolate exporters willing to invest time and energy could move into or expand their presence in the Chinese market.

The average couple will buy 500 bags for their wedding. This year in Shanghai alone, almost 200,000 couples will marry. They will spend about $18 million on their Xi Tang. If they buy a local product that can cost from 12 cents to 36 cents a bag, they will spend $60 to $180.

However, more couples are choosing pricier chocolates. Hershey's "Kisses," which cost up to 60 cents per bag, appeal to many couples.

Based on this price, an average-sized wedding purchase could lead to $300 worth of chocolate sales, which would sweeten the balance sheet of any candy manufacturer. Multiply that sale by the potential of the many weddings in China every year, and a niche market starts to look like a major one.

Spices

Sesame seed
According to an Associated Press article, scientists are in the process of developing strains of sesame plants that will grow in northern climates, such as Idaho. This could be an important development for potato producers. The sesame plant has the ability to control root nematodes when it is grown in rotation with susceptible crops.

Last modified: Thursday, April 06, 2000