Association of Coffee Producing Countries (ACPC) Agree to Coffee Retention Plan
On September 29, the ACPC agreed to withhold 20 percent of the exportable supply of coffee beans from the market in an attempt to raise coffee prices. The retention plan went into effect on October 1. Under the plan, the coffee producing members of the ACPC are required to retain 20 percent of its exportable coffee between October 1 and January 31. Sources said that although countries will be monitored for compliance, there will be a certain degree of flexibility. When announcing the plan, leaders of the ACPC stated that it had the full support of its members, and in addition, the support of key non-members, especially that of Indonesia. New York arabica coffee prices are near 6-year lows as a result of higher stocks in consuming countries and oversupply.
International Coffee Organization (ICO)
The members of the ICO have agreed to a new 6-year international coffee agreement that will enter into force October 1, 2001. According to a statement issued by the ICO, the agreement will strengthen international cooperation; encourage members to develop a sustainable coffee economy; promote coffee consumption; promote quality; provide a forum for the private sector; promote training and programs designed to assist the transfer of technology; and analyze projects that would benefit the world coffee economy. The ICO has 63 member countries, accounting for 97 percent of world coffee production and about 65 percent of world consumption of coffee.
According to the ICO, producing members' exports totaled 7.2 million 60-kilogram bags in August 2000, compared with 6.58 million bags in August 1999. This brings the cumulative October-August 1999/2000 to 81.25 million bags, up 5 percent from the previous year.
Brazil continues to offer government-owned stocks through its auction system.
|Brazil: Auctions of Government-Owned Coffee Stocks|
|Date of Auction||Quantity Offered||Quantity Sold||Price Range|
|--------60-kilogram bags--------||Brazil reais/bag|
On August 1, 2000, Mexico announced that the quantity of select coffee products--unflavored instant coffee (HS 2101.11.01), extract of concentrated liquid coffee (HS 2101.11.02), preparations with a basis of extracts (HS 2101.12.01), and other coffee products (HS 2101.11.99)--imported from the United States have exceeded the safeguard quota agreed to under the North American Free Trade Agreement (NAFTA). As a result, starting August 2, 2000, Mexico increased its tariff rate from 6 percent to 20 percent which will remain in effect through December 31, 2000.
U.S. coffee stocks at the end of
August totaled 6.2 million bags, up 112,000 bags from the July
31, 2000, level. Details follow in 60-kilogram bags:
|Location||July 31||August 31||Difference|
The following is extracted from a recent FAS Attache Report:
Italians are one of Europe's largest coffee consumers on a per capita basis. Italians drink approximately 600 cups of coffee per capita per year and this has a slow increasing tendency. It is estimated that between half to three-fourths of the coffee consumed yearly is for breakfast and mid-morning. The coffee Italians' drink is dark roasted espresso mostly from arabica-type coffee. This is the basis for most types of coffee in Italy. Decaffeinated coffee also has the dark roasted coffee base. The coffee market is dominated by a few large manufacturers with their private brands. Lavazza, Segafredo, Illycaffee, Café do Brasil, and Suchard are the largest manufacturers and distributors. Consumers are often very loyal to these producers and private labels, especially supermarket brands, are of secondary importance in the market. Competition is fierce, and several low-priced, or innovative products, have been introduced for sale in the home, at coffee bars and in supermarkets. Italians know their coffee and expect good, high quality flavor.
Most Italian coffee bean imports are of Colombian and Brazilian origin. Some coffee beans are also imported from Asian countries. The bean origin of coffee roasts tends to fluctuate depending upon available world prices. The strong dark roasted flavor is more easily and consistently maintained without such a close watch on the origin of the coffee. Italy also exports coffee, more than 90 percent of exports are made up of roasted espresso coffee. Exports have increased nearly 25 percent in the last five years in value. Coffee exporting, especially to nearby European and Middle Eastern countries, is important, but secondary to providing coffee for the domestic market. Exports make up 10 to 15 percent of domestic coffee production. The largest coffee producers are also the largest exporters.