Green Coffee Market Update

April 28th, 2008

In spite of all the current volatility in commodity markets, including coffee, green prices are about where they were in our last Update. It seems because the global credit crisis had seriously hurt equity markets, new money began flowing into the commodity index funds late last year. In January and February of 2008 alone some $20-billion (US) has move into these funds.

The Commodity Futures Trading Commission (CFTC) has failed to adequately control these speculators, and rising commodity futures have made it tough for ordinary, small hedgers to manage risks. The price of rice for example has more that doubled in the past year, wheat is up 71% and corn 60%. This has put tremendous pressure on food prices everywhere, to the point of real distress, especially in the economically disadvantaged Third World. Rising costs of fertilizer inhibit the boosting of production, or must be compensated by further increased food prices.

Coffee prices have risen in spite of record world production in the 2007-2008 crop year, up from 123 million bags to 141.9 million (arabicas by nearly 15 million and robustas by 4 million). Some countries have enjoyed large increases, such as Indonesia at 38% (for those interested, Sumatra will weigh in at around 400,000 tons of coffee this year, with Java and Bali totaling around 100,000 tons).

In spite of good present production, world consumption continues to grow, especially in countries such as Russia, India and China. Some of the large speculative money is focused on the idea of world consumption outpacing production over the longer haul. With large sums of speculators' money rushing into commodities in a time of relative equilibrium between supply and demand, there doesn't seem much chance of green prices lowering in the near future.

But given this era of extreme volatility, one never knows. Stay tuned:

April 2nd, 2008

In our last update we mentioned that the market seemed to have ceased and even reversed its upward climb. That softening has continued to the point that as of this day's closing (April 2, 2008), the market on a roasted basis is around 20 cents per pound over that of last fall.

Folgers, which had issued three price rises in the past few months, now has retracted the last raise on one of its blends, possibly due to its robusta content. But for the industry as a whole, today's replacement green costs are fairly well in keeping with the 20 cents per pound most roasters have implemented. The difficulty is that these same roasters have purchased a lot of inventory at prices much higher, but may find it difficult to raise prices on a temporary basis, having to roast off these inventories at a substantial loss.

Such is the nature of the coffee business, and why we would love to see a more stable, tranquil market.

March 18th, 2008

No sooner had we "gone to press" with the last green coffee update, than we were blindsided by a sudden retraction, some falloff in green coffee prices. We had all hoped for this but were beginning to wonder just when it was going to happen. The recent run-up in prices really had little to do with the coffee market per se, but rather the unstable condition and chaos in world financial markets.

Commodities, including coffee, have been seen as a safe haven against an uncertain world economy. So it wasn't surprising that the Monday, March 17 falloff in commodities closely followed the Friday, March 14 news of the collapse of Bear Stearns Cos, the stock of which dropped to $2.00, while JPMorgan Chase swooped in to pick up the pieces and the Federal Reserve announced an emergency discount rate cut.

The flight from commodities may continue in order to raise cash to meet margin calls as US equities take a beating. And there is some concern that demand could weaken from poor economic prospects in the US. All this could mean a further decline in coffee futures. But for now at least we are hopeful that future price increases may be less onerous than had been expected.

All of this, as we have been reminding our customers, is in the end dependent on the laws of supply and demand. While some firming in coffee prices is understandable as we approach the uncertainty of the upcoming Brazilian frost season, let’s hope we are spared that happening.

March 14th, 2008

The public must be quite confused about the machinations taking place in green coffee prices. Since our last Update, the market hit a high water mark of 1.6755 (the closing on March 3/08). The green index from the July 2007 average of $1.1982 per pound had thus increased by .4773 cents per pound, or about 58 cents roasted. Mercifully some retraction has taken place from that level to today's (March 12, 11:00 a.m.) $1.5130. That would mean a more modest increase in roasted costs of around 38 cents since July.

That's good news as far as it goes, for all roasters have implemented interim price increases, including our own of 20 cents per pound at Heritage. We now watch the market closely in hope of any further downward trend, as higher cost inventories booked earlier are arriving daily, and further catch-up increases will be necessary unless there is a marked turnaround.

The latest market action could be expected as a correction was quite late in coming, following such a rapid, steady progression upwards. Some shifts in commodities in general, excepting oil, triggered stop losses by speculators, and threats that the Exchange might increase margin requirements for those speculators, some of whom have record-breaking amounts of cash involved, has had an effect.

But when we say that the fundamentals of supply and demand rule market prices, that means long-range fundamentals. For In the short run one never knows what will happen, given the enthusiasm now exhibited by those who never actually have to handle the beans.

Once again, stay tuned!

February 25th, 2008

The past week has seen the market advance a further 10 cents per pound. This reflects the unprecedented speculator interest in commodity indices, as these index traders added another 2,800 long positions, pushing the active May contract to a new high of $1.6635. This is partly taking place as a hedge against the inflation taking place in the whole economy. It is estimated that speculators now hold nearly one third of the world's total annual coffee supply. One would think from all this that the market may be overbought. If so, when do we get a break?

The main physical issues are the reluctance of roasters to fix prices in a state of disbelief at these price levels, while shippers, especially Vietnam, are still holding back in anticipation of even higher prices.

Some interesting questions arise from all of this. Among them: will higher coffee prices dampen demand? Past experience tells us that coffee has a very inflexible demand curve. People go on drinking it in spite of higher prices. But higher prices give incentive to growers to expand production. If the market breaks, how far will it go in what could be a free fall? Almost no one seems to anticipate this, but often that's just when it happens. Let's hold our hats!

February 15th, 2008

From Jan 25 to today, February 15, (9:00 a.m.), the market has risen from 1.3145 to 1.5605, nearly 25 cents per pound (US$ green). Since July 2007, when the average for that month was 1.1982, we have seen a whopping jump, 36.23 cents green, or over 43 cents per pound roasted. Prices for arabicas, along with robustas, are now at 10 year highs.

This is against a background of a low carryover in world stocks, and with world consumption to exceed production this coming year by roughly 1.8-million bags (production 123.4 million bags, consumption 125.2 million bags, per the reliable German based firm F.O. Licht's analysis). That's roughly in equilibrium, and with a better upcoming crop than had been earlier predicted by Brazilian authorities, one would assume little need for panic. Thus roasters, cautious because of all the uncertainty, seem to have been caught flat-footed, as speculators have ridden the commodity bandwagon, driving prices higher with even the slightest rumor of any shift in world economics.

All soft commodities are included, partly driven by the distortions created by the drive for ethanol production, and coffee is going along for the ride. As we have reported earlier, coffee consumption has been on the rise in many countries. That includes Russia and Eastern Europe, along with the emerging markets in Asia, and even within the producing countries such as Brazil, where sales have been rising along with their increased standard of living.

It's as if the 'specs' have, in effect, created a huge coffee company, trading in far larger lots of coffee contracts than the combined roaster community. Thus we have a classic battle between emotion (the specs with their gut feelings, reading their quasi-mystical charts), and reality (the roasters having regard for production and consumption).

This makes buying for actual roasting a tricky exercise. Stay tuned in, 'we'll keep you posted.'

January 31st, 2008

Since our last report the market has continued to be quite volatile, within a limited range. But the highs and the lows within that range continue to edge upward. Several factors are in play:

The market for robustas has reached ten year highs as the largest producer, Vietnam, seems to be holding back in anticipation of even higher prices. This of course puts pressure on arabicas as well.

Speculators and funds are driving the market. According to the Standard Chartered Bank, investment funds have some $30-billion invested in agricultural commodities, with Barclay’s Capital estimating a grand total of $175-billion in all commodities, some $40-billion higher than this time last year. There seems to be a flight to tangible assets, and coffee is one of them.

On the other hand, as we reported last time, the Brazilian government agency CONAB predicted the upcoming crop at close to 44-million bags. But more recent and likely more reliable private estimates place the figure at over 49-million bags. This is a much better indicator for our trade, as world carryover stocks are relatively low, not able to provide much of a sinking fund for world supply.

Given the current condition of world inventories, and rising consumption, especially in the coffee growing countries, we must be wary of the upcoming frost season in Brazil, beginning in late May. Fear of such an event will likely assure no serious falloff in prices before that time. Indeed, even though the fundamentals of supply and demand currently remain roughly in equilibrium, historical charts show that mid-May is very often the high point, with a gradual falling off as the Brazilian harvest and frost season play themselves out.

January 9th, 2008

Since out last report of December 3, 2007, the market as of yesterday, January 8, through narrow ups and downs, has increased by around 5 cents per pound. There are two reasons that likely have contributed to this. One is the Brazilian government's National Commodity Supply Corp. (CONAB) having predicted a shortfall in projected production for the next crop year 2008/2009, which begins with Brazil's harvest of this year's crop, May through August.

Private interests had been predicting a bumper crop of close to 50-million bags for 08/09, but CONAB places it at between 41.3 and 44.2 bags. As a general comment, we note that the Brazilian authorities almost always understate future coffee production, which has the effect of raising world prices, as speculators not actually in the coffee business take them at their word.

The second reason for strong prices may be the general trend in commodities, fueled by fears of inflation and stagnant world economies. Roasters generally seem to be short on inventories, probably fearing a general price decline that could catch them with too long a commitment.

And so it is difficult making buying decisions at the moment, but it is safe to say that it may be wise to be prudent and not to gamble by going too far out in this, an uncertain market.

2007

December 3rd, 2007

Since our last report as of November 7, the market seemed to be calm, content with the level existing at that time, but a couple of reports from non-official sources had the effect of causing it to move upward by around 4 cents per pound this week.

The report from Brazil indicated that, while sufficient rainfall in all coffee growing areas had restored ground moisture to normal levels, the hope that the problems caused by the early drought had been overcome may not be wholly accurate, as there are signs that the upcoming crop may be four million or more bags below the recent, more optimistic predictions.

That, combined with a more conservative estimate of production in Viet Nam, frightened speculators, at least temporarily. That indicates how nervous the market is right now. Fears of further sharp increases are leavened somewhat by the reality of the new crop in Latin America beginning to be shipped. Residual stocks are low, but there is an abundance of new coffee coming available.

As usual, we will keep you apprised of any new trends and conditions.

November 7th, 2007

At the time of our last posting, the fear of a continued Brazilian drought haunted the market. Throughout early October, daily reports of skimpy rainfall well into the normal rainy season drove prices steadily upward, to the high point on October 8, 18 cents (USD green) over the August 2007 average.

Since then, gradual improvements in rain coverage in the various growing areas of Brazil seemed to have a calming effect on the "non-commercials." Those are the speculators who don't touch actual coffee per se, but who have a powerful impact on the market short term, to the consternation of the roasters who tend to be more laid back, less skittish. So when the rains came, cooler heads prevailed and the market receded back to the approximate average for the month of September, but still slightly above August.

The day of this writing, news of a typhoon driving towards Viet Nam has caused a slight upward reaction. Viet Nam's main coffee is Robusta, the prices for which have been very strong, with the inevitable upward pressure this causes on Arabicas, as national retail roasters lose the normal cost savings through their robusta use, switching to some degree to lower grade arabicas that are available.

In summary, with Brazil having tiptoed through the drought scare without any serious loss, and with harvesting beginning for most arabica growing areas, we see little reason for concern. One exception is the prediction from some sources of a very significant upsurge in coffee consumption, especially for robustas, and coming from erstwhile non-coffee importing nations. Russia and China are good examples countries with a growing standard of living, which is always conducive to higher coffee consumption.

September 28th, 2007

Since out last report, the market has wobbled around, but is essentially where it was September 19, despite a one day drop on news of likely rainfall, quickly reversed when turning out to be overstated. But such rains as have begun in Brazil, while light and scattered around the various coffee growing areas, have at least started, which normally signals better precipitation to follow. We are a little surprised that this has not triggered at least some net decline.

We will watch closely for further news on Brazil and it's need for moisture for coffee flowering and development.

September 19th, 2007

Since our last Update of September 7, and essentially just over the past few days, the green market has taken off, now 15 cents (USD) higher than it was on that date. The only reason is the question in the speculators' minds, that now the frost season in Brazil is over, will there be sufficient rainfall to allow the flowering of the coffee trees.

The rainy season started around mid-September, and there has been no significant rainfall in the coffee growing areas of Brazil to date. Meteorologists foresee nothing on the horizon until at least early October. While there should be no cause for real concern until we see what happens then, the market has built in a premium just in case.

We will follow this situation closely, for if green coffee stays at this level there would have to be a general price increase to the trade. As always, we share our inventory with our customers as long as possible.

September 7th, 2007

In our last posting of August 17, the first hurricane to hit Central America had caused a rapid rise of four cents in green coffee prices, but assessment of the lack of damage caused the market to retract those four cents in a matter of days.

But then another hurricane of equal magnitude headed for an area just below the first, threatening Honduras, northern Guatemala, and southern Mexico. The market quickly jumped on that news, gaining a couple of cents, but a slight veering to the left, and the breaking of the hurricane's back against the mountains restricted the loss of coffee cherries, with the accompanying rain not causing the damage that it might have.

The market quickly settled back to where the net position for the December 2007 contract month as at 1:00 p.m. September 7, 2007, is 2.6 cents lower, at 1.1680 (USD), than the close of August 17, 2007.

August 17th, 2007

The coffee market bounced back by over four cents today on news that the Federal Reserve has lowered the rate at which it lends to banks by 1/2 a point, and as funds took profits from earlier gains to cover margin calls in their troubled equities .

In addition, the news of a strong Hurricane heading for Mexico raised some fear about damage to ports or coffee plantations. The falloff of the value of the Brazilian Real has also encouraged exporters to sell.

We will update this report as the next week unfolds.

August 16th, 2007

The trend in coffee prices has been upward, fueled by speculators, with buyers of physical coffee carefully following along so as not to be caught short of inventory. But coffee, as with the whole commodities sector, has taken a severe hit the last couple of days, with coffee losing all its gains of the past few weeks. Panic in the world financial community seems to be the main reason.

When all this cools down, just which commodities are in good supply and which ones are not will dictate future trends. Nothing much has changed in coffee fundamentals to have us expect big swings in either direction. We'll just have to sit tight and await what happens in the over all world economic situation.

Our feeling is that there is nothing at present about coffee supply/demand that warrants any big move either way. Consequently, in this uncertain situation we intend to merely replace inventories and not indulge in speculation.

August 7th, 2007

The market has risen 3.5 cents per pound (US) since our last posting July 19, and over 8 cents since July 9. This represents mostly speculative buying, while commodities in general have been weakening, with losses in energies and metals leading to a 588 point drop in the CRB index.

The slightest bit of negative news (positive, from the speculator's point of view) can send the market rising. The latest issue has been the early flowering in some Brazil growing regions throughout an unusually wet July, such flowering requiring sustained rainfall in order to develop mature beans. But with August being traditionally the driest month, there is concern that this developing stage will be aborted, in which case later rainfall will be needed to start the process of resetting the buds. Weather conditions must be ideal for this to happen.

On the one hand certified stocks continue to gradually rise in the US, while data from Brazil indicate that exports plus domestic consumption will exceed production this year. And the ICO (International Coffee Organization) puts global output of 112-million bags, but says consumption may be as high as 120-million bags. Much then depends on Brazil's next crop, in its high biennial (once every two years) mode. We note that, in the last seven years, there has been a net demand/supply deficit of around 9-million 60 kilo bags in that country.

Incidentally, a customer asked us why so much in coffee pricing depends on Brazil, if in fact Brazil is not a main source for Heritage Coffee. The answer of course is that even if we used none, we would still be caught in a world supply/demand situation that cannot help but be heavily influenced by Brazil, which on average produces around one third of world's coffee, and nearly half of its arabica variety.

More on this as we (nervously) watch the current trend.

July 19th, 2007

"The near market (September) rose nearly 5 cents (USD) from July 9 to July 19, fueled mostly by "non-commercials," those not actually in the coffee business. There seems to be no particular reason beyond some late shipping problems due to strife and resulting bottlenecks in the Colombian port of Bueneventura, and late shipments from some other origins. The weak US dollar causes coffee growing countries some stress as that means lower buying power at home.

"Cooler weather in Southern Brazil is still well below frost temperatures, and certified stocks in the US continue to rise, now at around 4.25-million bags. Of course there are always some elements in the business trying to encourage a bullish sentiment, so we will have to keep a close watch on this latest trend."

July 6th, 2007

Arabica futures have continued their gradual decline in absence of any negative news about Brazilian weather, along with quite a bit of speculative selling . Some support against this trend has come from heavy industry buying, and continued strength in robusta prices.

While this off-year Brazilian harvest will come in much below that of last year, there was an ominous announcement from FO Licht that next year (08/09) will see a bumper crop exceeding the 02/03 record of 52.4 million bags. Certified stocks of arabica have risen this week by 9,633 bags to 4,190,230 bags. Without a frost in Brazil over the next couple of months, there is probably no reason to expect an up-tick in arabica prices. Then we can all sit patiently through the following season of potential Brazilian drought.

June 25th, 2007

The market has been slightly softer since out last report of June 4, and on Friday's close (June 22), was almost 3 cents per pound lower. Much has depended on the rising cost of robustas which, as the gap with arabicas has narrowed, has created a kind of floor supporting arabica prices. This gives the large retail roasters an incentive to at least slightly increase arabica content in their blends. But after a long period of steadily rising, robustas have slipped somewhat in the past few days, probably causing, at least temporarily, the abovementioned lowering in arabicas.

Other underlying bearish conditions include a gradual rising in U.S. stocks of certified coffee, and the continuing warm weather in Brazil. On the other hand, with the upcoming year of biennial low production in Brazil, year-end stocks will be very low, a condition that would be troublesome if there were to be either a frost this summer (Brazilian winter), or a severe drought later in the year.

It is interesting to note that volume in many countries that were previously low consumers of coffee has been steadily on the rise. Much of that increased usage is soluble in form, usually meaning higher requirements for robusta coffee. And that often represents soluble production right in the countries of origin, leaving less for export.

Please stand by for future trends.

January to April imports into the USA highest since 2000, at 7.514-million bags

June 4th, 2007

The market has suddenly moved upward, and due to more than just one influence. Most important was the fear of a frost late last week causing prices to jump by 5.5 cents for the July Contract. In fact, temperatures touched the freezing point Thursday night in the southern province of Parana, but no actual crop damage was reported, though there was some fear of possible harm to next year's crop.

Parana only accounts for around 10% of Brazilian production, unlike years ago when it was a major factor. But successive frosts have forced the coffee culture to move northward nearer to the equator, where fear of frost is somewhat lessened. Minas Gerais now accounts for the largest share. But psychologically the fear of any frost anywhere in Brazil spooks the coffee world, in particular the speculators (specs), who went heavily into short covering in anticipation of possible bad news. As of last Friday's Commitment of Traders Report, they are still modestly short.

Another important factor was the Brazilian government's announcement that stocks of all coffees in Brazil (arabica, robusta, equivalent green converted to soluble, etc.), had fallen to 18-million bags from last November's count of 27 million. That's a big drop, especially in view of this year's harvest, now just underway, being the small biennial crop.

In addition, the Brazilian government has also announced what in effect is a subsidy program for coffee growers, that kept producers from selling into last week's price rally.

Given all these circumstances, one would not expect a sharp falloff in world coffee prices, at least in the short run. As always, we will keep you posted.

May 18th, 2007

The market illustrated its nervousness the past few days, with a roughly nine cent rise as a cold front approached southern Brazil. But as of today, a retraction of nearly two cents followed a less scary weather update that predicted temperatures in the mid-single digits Celsius, below frost levels.

But these longer-range forecasts can be capricious at times, so we have to keep a watchful eye on things. Meanwhile, robustas continue to be strong, putting continued pressure on national roasters, especially the retail variety.

Conditions in most of Central America are a bit dry, as rainfall is needed to encourage flowering. We will keep you posted on that situation as well.

May 11th, 2007

There is an unusual condition prevailing in the coffee market. Arabicas have been slowly receding, while robustas have been strengthening, narrowing the price gap between the two. This creates an interesting situation. The major, high volume roasters, especially the national retail variety, have traditionally employed robustas to maintain lower blend costs, relying on the principle that customers wouldn't know the difference. The long-range effect has been lower quality and receding consumption, especially on the retail side.

Imagine the dilemma for these roasters when robustas approach the cost of arabicas (in fact older arabica stocks are only marginally higher than the better robustas today). As an example, if the traditional mix has been 50/50, then the advantage of lower cost arabica is canceled by the other half of the equation, the rising price of robusta. Thus the incentive for, and advantage of, using robusta for these large roasters becomes diminished. This can cause certain anomalies. There could be a temptation to improve blends by shifting the weight to the arabica side. Some risk might be involved, however, as customers are used to the taste of their coffee, however unpleasant it might be to the connoisseur.

And, given the high volume of such companies, switching to arabicas could put upward pressure on them for normal operators such as Heritage. Public demand for the big nationals to lower retail prices gets thwarted by the fact that, while the public hears green coffee costs have become lower, the blend costs for these companies has not.

Of course the current small spread in costs between arabica and robusta would not seem quite so dramatic in a much lower overall market, and depending on the Brazil crop this summer, it's hard to predict what will happen to prices by autumn. The cause of current market unpredictability is the heavy influence of the funds, the speculators who are not actually in the coffee business, and whose concern is entirely in anticipating future price movements. Open interest is near an all-time high, but it is not the result of roaster activity. In terms of demand and supply, current world supply of coffee is adequate, but much depends on this year's crop in Brazil.

As a matter of interest, the Intercontinental Exchange (NYSE:ICE) the leading soft commodities exchange, and its subsidiary, the New York Board of Trade (NYBOT), have announced its successful launch of side-by-side trading, with over 12,000 contracts changing hands the first day. This is a convenience for the trade, though it did cost some pit jobs, given the convenience and longer hours of electronic trading.

April 25th, 2007

The market has continued on the soft side with the expiration of the May contract. The Brazilian agriculture ministry's National Commodities Supply Corp. (CONAB) has put the upcoming 2007/2008 crop at 32.1 million bags, well below this year's production, but within the expected range for next year.

The problem becomes one of other estimates of the Brazil crop coming in much higher, as the CONAB numbers are not given as much credence as one would expect from an official government agency. The USDA reports for example are considered more reliable. And, given the ample stocks of coffee in the world today, there is a pervading sense of bearishness on prices. Commodities generally have been soft, and that likely contributes to the current pessimism.

A couple of other tidbits in the news include a report from London, England, saying investors have come up with a new soap called Shower Shock that has been infused with caffeine. The company, with a website thinkgeek.com says it will "help users wake up in the morning." But if you click in on that website you may agree the whole product mix of that company is pretty frivolous.

At the same time we hear of yet another British contribution. This is a new drink called CoffeeSlender, allegedly using a "coffee-derived ingredient, Svetol." The claim is that it adds weight loss during a diet. We are told in the press release that even Miss Universe of 1990, Norwegian Mona Grudt, endorses it.

We will keep you posted on more serious market moves as we approach the Brazilian harvest.

April 10th, 2007

The market still hovers around the $1.10 mark as of this morning's writing. Fund selling at anything beneath that level triggers industry buying, creating a virtual price standoff. One influence was a bearish report out of Brazil, where Instituto Brasileiro, de Geographia e Estatistica (IGBE for short) predicts the upcoming 2007/2008 crop will be 37.5 million bags, putting pressure on the "C" market, as that is somewhat higher than earlier predictions.

As a counterpoint to this, Brazil's official government count of stocks of green coffee as at March 31 of 1.6 million bags was the lowest on record. Further news indicated that Brazil's domestic consumption will reach 17.3 million bags in 2007, as opposed to 16.3 million bags in 2006. Such rising volume of course tends to remove more and more coffee available for export.

We await something more definitive that might signal a strong move either way. We will keep you informed.

March 16th, 2007

Our last update told of a rapid 6 cent rise in early March, but since that time there has been a gradual retraction of an equal amount. The market seems to be torn between the short-term comfort of plentiful supply, and concern over possible future weather problems during Brazil's winter, beginning in May.

We had suggested in the March 2 Update that the market might move in a range from 1.10 to 1.25 (US Green), and while on March 14 it did dip to 1.0985, it has stayed within, but at the lower end of that scale. One would expect a continuation of this pattern, at least for a while.

Much publicity surrounded the recent battle between Starbucks and the government of Ethiopia over the use of the name "Sidamo." Ethiopia vehemently resisted Starbucks trying to copyright a name that included "Sidamo," one of Ethiopia's prime coffees. They seem to have won their case.

But one aspect of the conflict that held particular interest was that Starbucks would choose Sidamo, admittedly a high quality coffee grown in Southwestern Ethiopia, while seeming to miss the reality that both Ethiopian Yirgacheffes and Harrars normally bring even higher prices, all other things being equal (note that we are referring to washed Sidamos and Yirgacheffes, while Harrars, from Eastern Ethiopia, are unwashed, or "naturals)."

Apparently Starbucks executives traveled to Ethiopia to congratulate the Sidamo farmers on having "the world's best coffee." This seems to be an unusual gaffe for a company noted for its marketing acumen, if not its coffee expertise. It's always dangerous, especially in what can be largely a subjective judgement, to say one coffee is the "best" when, as in this case, more sophisticated coffee people say, through the prices they are willing to pay, that it is not. Besides, other countries may be raising their collective eyebrows too.

This is not to detract in any way the proven success of Starbucks as a marketing phenomenon. In that sense they warrant unreserved admiration. Maybe this lapse confirms the wisdom of economist Peter Drucker who, when asked when a company can become too large, simply replied, "When it becomes unmanageable."

March 2nd, 2007

We had no sooner gone to bed with our last Update than the market decided to take off. The May contract rose over six cents in two days, partly due to a general rise in commodity prices, and partly because of short coverings by the "specs," the speculators that have such an undue effect on prices. In the following few days, some fallback of those increase has taken place.

Prices for what are referred to as “Tropical Softs,” including sugar, orange juice, cocoa, and coffee, have, with the exception of coffee, been strong lately, and coffee has been fluctuating between higher highs and lower lows, giving the impression that it could break out either way. The indexed funds with huge transactions involved seem to be rolling around like loose cannons.

Concerning fundamentals, there is a lot of coffee in the world today, but concern for diminished supply of both arabicas and robustas in the upcoming few months has us all on edge. We keep mentioning conditions in Brazil because of its huge portion of the arabica market, and coffees grown elsewhere become victims of the laws of supply and demand that are so influenced by the Brazilian position.

In such a market, one is wary of making predictions by attempting to outguess the guessers. For any of our customers re-selling coffee, it may be better not to try to be a hero by going a long way out in time, but to average costs and "go with the flow."

In summary, as a reasonable guess, one might expect the market for the next while to fluctuate between 1.10 and 1.25, as future supply of coffee becomes clarified.

As an interesting aside, there has been a merger of the European ICE commodity electronic market with the NYBOT (New York Board of Trade), meaning a 14-hour trading day between the two (NYBOT-ICE). Electronic trading now surpasses that of the floor trading in New York. Functionally it really has no serious effect on roasters, but some floor traders in New York have been having to keep long hours, and some have even been terminated due to a lighter load, and in the name of efficiency.

As usual, we will keep you apprised of any serious market changes.

February 21st, 2007

The market still seems to be wondering where to go, but since our last Update it has given back almost exactly 6 cents per pound, going up and down in tiny increments, but with a gradually lower trend. There has been a lot of speculative contract selling, while an easing of physical selling from countries of origin has contributed to helping support prices. The heavy switch from March to the May contract month also has been supportive. Other commodities have been dropping, but as is often the case, coffee hasn't gone along quite in step with them.

We have around three months to go before the Brazilian frost season, and supplies seem plentiful for now. Speaking of Brazil, we see the strange spectacle of that country perhaps importing green coffee from other countries for blending to the export market, or to cover for certain shortages that might occur domestically, particularly in robustas, and most likely coming from Vietnam.

Strong promotion of coffee consumption in Brazil has boosted domestic usage by around 19% since 2003, to 16.3 million bags (69K), putting Brazil number two in the world, just behind the US. Meanwhile, a look at the long term trend in the US shows it holding steady since 2001, with 2006 imports totaling 14,057,248 bags.

The Canadian picture is quite different, with an apparent 3% annual rise in coffee importation over the same period. Tea in both countries is growing nicely, while soda has had its difficulties, and with water still being the undisputed growth champion of the past few years. The softening of the Canadian dollar against the US$ acts as an offset to the slightly lower green coffee market.

As Arnold might say, "We'll be back," with an update on any new news from the world of coffee.

January 31st, 2007

The green coffee market has been going through a rather suspenseful period where one would not be surprised if there was a sharp turn either way. The present year has been a case of very high world production exceeding consumption, which continues to rise slowly. But market uncertainty has been affected by early predictions regarding the upcoming crop that puts the decline in Brazilian output alone from this year's (2006/07) 42-million bags to as low as 32-million bags, about the same as in the last low production year in the cycle, 2005-06. It should be remembered that of those 32-million bags, 10-million will be the robusta variety, leaving what for Brazil will be a relatively small amount of arabica for export.

This is partly due to it being the lower half of the two year production cycle, and partly due to a early drought during the flowering season of October and November, in the most important growing areas of the country, Minas Gerais and Sao Paulo. Hopefully a sufficient carryover in Brazilian stocks will provide a cushion for what could otherwise be a serious shortfall.

But now the current heavy rains in Minas have created a problem of coffee rust, though no proof of crop damage from this has emerged as yet. The same heavy rainfall in the southern state of Parana has provided enough moisture to raise hopes of a big increase in the 2008-09 growing year for Parana which used to be so important to over all Brazilian production.

In sum, and as of this moment, an nervous market has still kept prices well above those of six months ago. But the uncertainty mentioned above still prevails. We will keep you posted when we can get a clearer view of the over all picture.

December 28, 2006

For some months now the market has been slowly moving higher as the coffee world has been trying to guess the long-range likelihood regarding supply and demand. There is a lot of coffee in the world at the moment, but the coming year may see a reversal of that condition. In particular, the Brazilian crop which was so abundant this year, will see a sharp drop in the coming season, perhaps by over 10-million bags. And the Vietnam yield seems not to be as promising as originally thought. A decline in world production of some 15-million bags in possible. And just yesterday we heard that Brazil is going to buy a large amount of Viet robustas, as it feels Brazil might fall short on delivery commitments in the coming year. Why would Brazil buy robustas when they may fall short in arabicas? Because the robustas would go into the domestic Brazilian market, liberating some needed arabicas for export.

Taking that into consideration against growing world consumption, the prospect of future shortages looms large, especially in the minds of the "specs," the speculators who make the market in the short run. Yesterday saw a nearly 4 cent drop in prices, but this may have been entirely due to liquidation of short positions prior to year-end, a sort of straightening up the books, so to speak.

While we can't predict the exact outcome of all this, a reversion to last year's lows is highly unlikely. And roasters are now buying at these higher prices, so will quickly have to reflect it in their selling prices.

December 13th, 2006

In spite the bearish predictions of some coffee people, the market has resisted backing off. It continues its slow, tortuous climb. Fundamentally, it is the belief that the upcoming Brazilian crop is going to be a mild disaster, limiting the amount of arabicas against a picture of slowly rising world consumption. And this is in spite of what looks like a real bumper crop coming out of Viet Nam.

With each jump in prices, usually fueled by the Funds, those holding coffee sell into it while others do a little profit taking fearful of a reversal, but it doesn't seem to deter those optimists who keep charging forward.

Meanwhile roasters, in fear of being too long in inventory, have been cautious in committing, but as those inventories shorten, the need for an imminent price increase becomes apparent. At this moment as the bulls and bears get ready to enjoy the holiday season, both sides are keeping their fingers crossed for their cause.

November 30th, 2006

As of November 30, 2006, the arabica market has been able to hold its gains as reported in our last Update. Absent a quick turnaround, increased roaster prices are expected shortly (as distinct from the increase announced by robusta oriented Folgers which announced a 15 cent per pound increase a few weeks ago strictly on the rise in robusta prices as a result of the short Viet Nam crop this year).

Brazilian origin reports insist on the idea that poor spring weather (Brazilian spring – our fall) has repressed the flowering/budding/cherry development sequence. This is alleged to be particularly so in the important growing areas of Minas Gerais. But outside of the specs, the trade remains skeptical of the idea that over all demand is about to outpace supply. It is this caution that, in absence of any new, definitive information, is likely to temper a serious further increase in green costs. But as one can never be sure in this crazy world of coffee, we will resist making any predictions.

November 15th, 2006

The market has jumped around 14 cents per pound (US Green, 19 cents Canadian roasted) in the first half of November. This in spite of the generally bearish attitude of world roasters. But, at least in the short term, money is king, and the big speculator funds have gotten the smell of profits to be made in creating this rising market.

There is some rationalizing possible to support this, such as reports of a spotty spring in Brazil; not enough rain here, too much there at the wrong time, etc., with an important growing area in South Minas Gerais especially suffering from lack of adequate moisture.

We hear of the general unhappiness in Brazil flowing from the relatively low prices of the past few years and, as mentioned by Gilmar Melles, an agronomist at Brazil's second largest coffee coop, Cooparaiso, "Either roasters have to pay more or we are in trouble." We also hear rumors of world green stocks being at a recent historically low level.

Other reports are more bullish (from the roasters' point of view). It appears, for example, that preliminary figures for this current crop year indicate production of around 122 million bags worldwide, with consumption at 117-118 million bags, making up for last year's shortfall. It may also be true that a lot of Brazilian coffee is being held back in hope of forcing higher prices, but not reflecting market realities.

The reader might note that the roasters of the world are almost always cynical of producers' reports of Armageddon just around the corner. Let's wait and see what happens over the next couple of weeks, and we are into the March 2007 contract month.

November 2nd, 2006

After moving up and down within a narrow range for some months, the market has jumped nine cents (US$) per pound in the last two weeks. In the lower ranges buyers enter the market. At higher levels origins want to sell.

This latest move has mostly been fueled by "specs," anxious to see coffee break through recent highs to a new plateau. With some publicity regarding increased world consumption, coupled with the knowledge of a drop in Brazil's upcoming off-year production, the bias may be toward the upside.

Another factor is that Fall weather roastings have of course picked up in major importing countries. But absent some other, specific, identifiable factor coming along, one would be wise not to panic But "we'll keep you posted."

October 9th, 2006

As of the close on October 9, and since our last post of September 29, a rather lazy market has drifted downward by around 3.5 cents. Lack of buyer interest and a good result from the Asian typhoon that bypassed the robusta-growing area in South Vietnam, gave the market some comfort with the long-range view.

Fairly decent rainfall in southern Brazil bodes well for the smaller biennial upcoming 2007 crop, though precipitation has been stubbornly avoiding bringing meaningful amounts to the important region of Minas Gerais.

On other coffee news, it is amusing to see a proposed class action lawsuit filed by a Seattle specialty coffee house owner who is claiming Starbucks is exercising its "monopoly power" in violation of the Sherman Antitrust Act, engaging in a range of anti-competitive activities aimed at eliminating competition.

The complaint claims that Starbucks locks out competition through a series of predatory practices such as including exclusive lease arrangements, offering to make lease payments higher than fair market value, the "cluster bombing" of stores, and competitive buyouts.

Steve Berman, attorney for independent shop owner and complainant Penny Stafford says, "We believe Starbucks' market practices are more about destroying competition than pouring a good cup of coffee."

Doesn't Berman know that "Charbucks" never was really about "pouring a good cup of coffee," only about "creating an experience?"

Another interesting item was the winning of the "Cup of Excellence" award by a woman farmer in Colombia named Edith Encisco Yasso. This Cup of Excellence program is managed by the US based non-profit Alliance for Coffee Excellence, in partnership with coffee producing countries.

It should be noted that the rather wild prices paid for small lots of these offerings of 15 to 75 bags, has little to do with their intrinsic value. To an experienced green coffee buyer, the "winning" lot might indeed be good enough to command a premium, perhaps two or three additional pennies above the "C" Contract.

But it does afford a marketing opportunity for entrepreneurial types who may pay over $20 per pound to seize on the chance to promote a name that has gained recognition through an essentially unreliable round of highly subjective "cup tests," by a handful of people whose main qualification is the time and ability to travel to exotic climes.

The month of September 2006 saw green prices for the nearest contract month of December move within an eight cent range, but wind up almost exactly where it started. The two factors most affecting the market have been the concern for lack of rainfall in coffee growing areas of Brazil, and the shortage of robustas emanating from Vietnam.

September 29th, 2006

Rainfall in Brazil has greatly improved in the past few weeks, and financing for growers has been plentiful, meaning they are in no hurry to sell. The biennial nature of Brazilian production will result in a smaller harvest next year. Along with world demand for arabica coffee holding firm, that should mitigate against a deep falloff in prices. Improved production in Vietnam should help in this, subject to some calamity such as the typhoon heading toward that country even as we write this update.

In sum, given current circumstances, there seems little reason for concern that prices will move sharply in either direction, although there may be a slight bias to the upward side. But one cannot foresee all of the complexities that can affect this business, so we will keep you posted on any surprises.

September 22nd, 2006

Since our last report the market has moved only slightly downward (about three cents in arabicas), with narrow margins between its highs and lows. It has been essentially responding to the daily weather reports out of Brazil, where the need for rain and the lack of sufficient moisture until now has kept everyone in minor suspense.

Throughout the Brazilian frost season, one is emotionally prepared to handle a two day weekend, which is a bit too short for coffee people there to manufacture grounds (pardon the expression) for coffee prices to rise.

But for some reason three day weekends are different. That extra day provides lots of time to upset the coffee world while non-Brazilians slept or enjoyed their holidays. Of course that refers to the two three day weekends in Canada and the US when the Exchange is closed in the midst of the Brazilian harvest, early July and early September.

It seems uncanny that, over the many years I have been in this business, strange things have happened after going to bed peacefully on a Friday night, only to arrive at the office on Tuesday morning after a long weekend to find the coffee world in a panic. The telephone is ringing with brokers on the line warning me that “the train is leaving the station.” That was the old days of course when we all took trains and panicked at the thought of being left behind. Today it might be, “the departure gate is closed.” Either way, the message is that we had better commit immediately to some heavy buying or be left behind by clever bargain seekers less cautious that we seem to be.

So here we are just after this Labour Day 2006 at what would normally be the end of the frost season in Brazil. But as so often has happened over the years, we arrive at our office only to hear, after “tiptoeing past the graveyard” for most of the normal Brazilian winter, which has been warm this year, that a sneaky cold front slipped in from Argentina and actually brought a mild frost in Parana in the deep south of Brazil, and the market has jumped over three cents (after a total six cent rise in the month of August). Luckily Parana is not the big growing area it used to be before the coffee culture of Brazil migrated further north, specifically due to the risk of frost. Now coffee is more heavily centered in Minas Gerais to the north.

Such is the nervous period through which it is unwise to turn one’s back, for if it isn’t a frost, it’s the potential for drought. If there is insufficient precipitation by September 15, the prospects for next year’s crop become gloomier, and the train starts pulling away from the station again. But in fact the risk of frost is now light, and readings on rainfall are fairly optimistic, so one can hope for reasonable long-range stability in prices. And in fact in this same week cooler heads prevailed, and by Thursday the market had taken back Monday’s gain.

One large element that has affected price trends this year is the rare problem of the robusta market becoming inverted because of the situation created by a shortfall in Viet Nam production. Inverted refers to a condition where the out months are being quoted far lower than the spot months because there is insufficient coffee available to meet immediate delivery requirements. Not only that, but the squeeze has driven robusta prices to the point of closing in on arabicas, causing a dilemma for the large national brand retailers. After all, how can they cheapen their blends when the most important tool, robustas, are priced inordinately high?

August 29th, 2006

For propaganda regarding the outcome of Brazilian coffee production, no one can top the Brazilians themselves in the art of wobbly prognostication. The conflicting news that is often contradictory can drive coffee buyers to distraction. A case in point is this very morning as we open our early email and see the short and long term weather reports. What is it this time? Not enough rain, too much rain, rain too early, rain too late, frost, threat of frost, or what?

In fact, less rain is not that bad during the harvest season, now nearly ended, for the simple but adequate reason that it is more comfortable picking coffee cherries when it's not raining. Besides, spotty rain coming too early before the normal rainy season causes premature flowering for next year's crop, inhibiting the full flowering expected when normal rainfall comes in September, which is Brazilian springtime.

So there is normally not much need for concern before mid-September, but the mere mentioning any day that we are going to need rain in September, and that it hasn't rained yet in August, is enough to scare the market and have it rise by perhaps two cents. Up until today, we have had mild concern, but the tone of today's example of weather reporting out of Brazil, seems starkly more ominous. Here is what we read this morning:

29 Aug 2006 21:22 DJ Dry Spell Hurts Brazil Minas 2007-08 Coffee Crop
-Survey
SAO PAULO (Dow Jones)--Brazil's No. 1 coffee-producing state of Minas Gerais will suffer a reduction in its upcoming 2007-08 coffee crop due to the worst water deficit the south of the state has experienced in the
past eight years, said the country's National Council of Coffee, or CNC,
Tuesday.

As of Monday, "the water deficit has reached 230 millimeters in the
south of Minas - which is the largest volume registered in the region
since 1998," said a CNC spokeswoman in a phone interview with Dow Jones Newswires.

Due to this water deficit, the result of an extended four-month dry spell over the country's center-south region, there is likely to be a fall-off in productivity of between 10% to 30% of potential production in the south of the state, she added.

And it's not just Minas Gerais state that has been affected. The neighboring state of Espirito Santo could also see a drop of 15% in potential productivity next season, said the spokeswoman. Meanwhile, a few regions in Parana and Sao Paulo states are also suffering from a water deficit - though there are no estimates yet for the possible crop damage that might result.

In the city of Alta Mogiana in Sao Paulo, for example, the water deficit has hit 170 millimeters. Worse yet, however, the trees have started to flower, due to showers that sprinkled the region in the past 15 days.

Flowering is an indication of the coffee tree's health. The more uniform and abundant the flowers are, the more likely the tree will produce an abundance of coffee beans. A weak flowering, however, causes panic among coffee producers, who worry that the flowers will not grow properly without good showers, which could then result in potential crop loss. "If it doesn't rain, and well, in coming weeks, these flowers could
fall off, and the tree won't bear fruit," said the spokeswoman. Parana state has also experienced flowering in limited coffee-growing
areas, she added.

Coffee is a biennial plant, with alternating years of high and low
productivity. The current 2006-07 season is a high-production year,
with an estimated 41.6 million 60-kilogram bags to be harvested, while
the upcoming season is expected to have a crop somewhere in the mid-30 million bag range.

The survey into the region's water deficit was conducted by Fundacao
Procafe, a coffee organization linked to the country's Agricultural
Ministry, with headquarters in Varginha in the south of Minas Gerais state. The CNC released the results right before the start of the three-day
Brazilian Coffee Congress Tuesday evening. Brazil is the world's largest coffee producer and exporter. Minas Gerais state accounts for roughly 40% of national production.
-By Grace Fan; Dow Jones Newswires; 55 11 3145 1489;
brazil@dowjones.com
(END) Dow Jones Newswires

August 18th, 2006

Since our last posting the market has continued to oscillate within a narrow range, with various influences tending to cancel each other out. The three key things affecting market judgements seem to be:

- the fact that the Brazilian harvest is nearing completion amid warm weather, but with some cooling off predicted for next week, with a low of 4 degrees Celsius for the southern regions of Parana and Sao Paulo, and 7 degrees for the more important Minas Gerais.

- There has been a dearth of precipitation in the major Brazilian coffee growing areas, and time is getting short regarding the proper flowering for next years crop. But typical of the confusion is the report that, as we approach this weekend, fairly decent precipitation is expected in the southern growing regions of Parana and Sao Paulo, but stopping short of Minas Gerais.

- lack of robusta coffee has brought it to a recent historical high and a narrowing of the difference between it and lower grade arabicas. This has tended to act as a support for arabica prices. In such a situation, it is reasonable to expect a correction, with either arabicas rising, or robustas falling. But it is tricky to attempt to capitalize on this as, even with the spread widening, both varieties could be rising or falling at the same time.

Some of these uncertainties may change shortly, so we will keep you on top of the coffee news

August 3rd, 2006

Quick Update: To everyone's surprise the market rose sharply amid gains for other commodity sectors, reaching a two month high. One main reason that has prevailed for some time is the rather surprising prices for robusta relative to arabicas. Robustas have reached levels they haven't seen in many years. The spread between the two varieties has been abnormally narrow, largely due to production problems lately in Viet Nam.

This latest rise in arabicas may be partly to redress that situation. Origin countries are tending to sell into these higher prices, though the market as of this writing continues to move ahead. Buy stops and short coverings in arabicas by Funds are creating an impetus, but it is difficult to guess what further movement will take place over the next few days. We will continue to report in this volatile situation.

July 31, 2006

Warm winter weather in Brazil has seen green prices slowly drift downward at roughly the halfway mark of the frost season. But in the last few days there has been a slight firming up as growers, in Brazil for example, look at long-term trends in world production and hold back stocks in anticipation of a stronger market to come

It may be interesting to note these trends in the world’s major producing areas over the past ten years. Brazil for example has been slowly but steadily expanding its exports of Arabica coffee, and we note that the quality level of its offerings has also shown some improvement. But its robusta volume has continued to suffer in competition with Viet Nam. After ascending to a high in 2002/2003, Brazil is pretty well back to its 1999/2000 level in that variety.

But if we take Brazil’s ten year over all record, we see that the pasty five years have averaged 42.26 million bags, as opposed to the previous five years production of 31.82 million bags. That’s an increase of 32.8%. These numbers do not include the roughly 20% of Brazilian production of coffee that for one reason or another has been deemed “unfit for human consumption,” much of which is now going into the production of what is called “biodiesel” fuel. This is a clean burning fuel derived from any fat or vegetable oil that will work in diesel engines. Brazil is already a leader in production of ethanol, and is now producing a growing amount of this bidiesel fuel as an additive to regular diesel, suitable for tractors and trucks on coffee cooperatives.

Meanwhile, the group roughly described as Central America, including Peru and Mexico, while holding its own the past three years is substantially down from the previous three. Comparing Brazil production this year Vs Centrals, Brazil wins easily with around 36.5 million bags, versus the Centrals yield of 16.1 million (60 kilo).

Colombia alone, by comparison, has seen production in a similar time frame vary back and forth between 8 and 12 million bags fairly consistently. As an aside, we have had some difficulty with Colombian coffee leaving the main coffee port of Buenaventura, which has been receiving much more green coffee that it can handle, causing a backup and the need to store a lot of coffee in port. This of course is in addition to the random inspections due to concern over security when the coffee enters the US or Canada.

On the consumption side, recent data on average cups-per-day consumption in the US indicates that since 1970, when it was around 2.6 cups per person per day, it has fallen to about 1.4 cups in 2006, though that figure is an improvement on the 1.1 cups just two years earlier in 2004. One can’t be blamed for being a bit skeptical about such survey numbers however, as there are so many variables it is virtually impossible to quantify things objectively through making a few phone calls, given such issues as varying cup sizes, to name just one.

Watch here for further postings as we slide through the remainder of the Brazilian frost season.

June 29, 2006

A surprise cool front entered the South Eastern coffee growing areas of Brazil amid a light drizzle of rain. This can happen at high elevations near the coast, and in southern Minas Gerais, an important coffee growing area, temperatures reached minus 2 degrees Celsius, or 28 degrees Fahrenheit on Wednesday morning.

There was no frost affecting coffee trees, and warmer weather is predicted, so there seems little fear of trouble for the next ten days or so. But just that unexpected cold snap was enough to drive the market higher on Wednesday by over two cents, before leveling off.

As a general comment, absent a Brazilian frost and the equally dangerous drought season that follows, the market shows little indication of moving higher. There has been a mild flight from commodities by funds that have had an undue influence on coffee by their speculative activities. Lower production in Viet Nam, while not affecting world arabica supply, does have an influence on prices in that large national roasters, while experiencing savings in their arabica purchases, are paying a disproportionately high price for robustas of which they are heavy users.

INTERESTING TIDBITS: Wal-Mart is moving into Fair Trade coffees that are inherently higher in price as a kind of departure from their low cost image. And coffee has received a boost from reports that it has a beneficial influence on humans whose liver might be suffering from over-indulgence of alcohol. On the minus side, we have the inevitable periodic reports about coffee's negative effect on those with acid stomach or acid reflux. Buyers should be skeptical about reports of roasters processing low acid coffee, and of course one should remember that in coffee, acidity is a prime virtue in contributing to its flavor.

June 13, 2006

The trend noted in our last update has continued, with the market drifting listlessly downward. Traders are torn between taking advantage of lower prices while nervously watching such things as weather in Brazil, and the huge number of short positions held by speculators as we approach the first notice day for ending the July contract.

These and a large number of other, less influential variables, bullish and bearish seem to be neutralizing each other at the moment. We will keep you informed at the first sign of a trend either way.

May 26, 2006

In our May 18 Update we suggested that, all considered and with no new happenings on the weather front, the market would likely drift around in a range between .95 an 1.15 in the near contract month. And that is where it is now.

Whatever changes that do take place rest on a few variables that buyers and speculators alike must watch for. In the past few days we have been hearing reports of the current Brazilian harvest being somewhat larger than predicted, perhaps by 3 million or so bags. Weather there has been warm, and the 10 day forecast is for more of the same. This has had a dampening effect on what we often get before the Memorial Day weekend when buyers and "specs" become nervous about a sudden cold front hitting the southern coffee growing areas of Brazil.

The US$ has strengthened against the Brazilian real, giving producers there more incentive to sell coffee. Commodities have been taking a hit lately, and speculators are bearish on coffee as well. So the market has slipped slowly but surely downward. Traditionally that has been the way it behaves as we all "tiptoe past the graveyard" of the Brazilian frost season. And while we see no reason to be fearful of a sudden rise, let's keep an ear tuned to the weatherman's reports.

Meanwhile, news of Starbucks entering the Brazilian market with vigor is interesting. One is reminded of the old saying, "Poor Henry Ford, with all his millions, he never got to drive a Cadillac." The modern version of this might be, "Poor Starbucks, in all their Brazilian retail stores, they can't use anything but Brazilian coffee. Oh, what the heck, customers can still get the Starbucks 'experience.'" And they can get music, and books, too.

The Heritage Coffee Company, Ltd.
Coffee Roasters for Office Coffee, Vending, Foodservice and Specialty

Green Coffee Market News
by Stuart Daw

The Heritage Coffee Company, Ltd. Coffee Roasters for Office Coffee, Vending, Foodservice and Specialty

Green Coffee Market News by Stuart Daw

The Heritage Coffee Company, Ltd.
Coffee Roasters for Office Coffee, Vending, Foodservice and Specialty

Green Coffee Market News
by Stuart Daw