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Volume 8, Number 8           August 2003

 

 

East Coast Blackout Has Little Impact on Coffee. 1

Sara Lee's Ralph Russo to Kick Off Fall Educational Conference. 1

"Coffee on the Hill" Set for Next Month -- Add Your Voice. 3

William J. Maher III, Son of William Maher of Ellis Coffee, KIA Iraq. 3

Coffee-Drinking Again Shown to Reduce Cirrhosis Risk. 3

USDA Report on Vietnam Coffee Quality Standards. 4

Vietnamese President Urges Province to Reduce Coffee Acreage. 5

Coffee and Exercise. 6

Ethiopia Coffee Production 3.3 Million Bags, Up 79 Percent 7

Retail prices (all sizes/per pound) 7

The ICO composite average indicator prices. 7

 

East Coast Blackout Has Little Impact on Coffee

 

The electrical blackout that struck huge parts of the Northeast shut down NCA communications late in the day on Thursday August 14 and continued into the next day, while staff continued working from remote locations.

 

As this is being written, full electrical and communications service in NCA headquarters was anticipated by Monday morning.

 

The blackout also had little impact on coffee trading at the New York Board of Trade (NYBOT), where spokesman Guy Taylor noted that coffee trading from the day, normally conducted in the morning, had long been over by the time the blackout struck at 4:11 pm. No data were lost, he noted.

 

NYBOT, which has only recently relocated to new quarters in lower Manhattan after a year and a half at backup facilities in Queens following the destruction of its trading floors and facilities on September 11, 2001, was fully operational on Friday after the blackout, Mr. Taylor reported.

 

 

Sara Lee's Ralph Russo to Kick Off Fall Educational Conference

 

An overview of coffee consumption within the context of the entire beverage category will be a focus of the NCA Fall Educational Conference General Session kickoff presentation, "New Products & Trends," to be given by Ralph Russo, President and CEO of Sara Lee Coffee & Tea Foodservice.

 

The Conference is set for October 16 and 17 at the Metropolitan Hotel, in New York. Registrations are now being accepted (go to www.ncausa.org).

 

What consumers are up to -- what they're drinking besides coffee, what they're looking for from coffee and other beverages -- is the key to understanding what coffee is competing against in its respective categories, Mr. Russo recently explained.

 

His talk will cover current trends in coffee forms -- soluble, ground, liquid -- changing patterns in the role location is playing, whether home, office, restaurant or specialty shop, and some of the new forces driving consumption, including changing lifestyles, the desire for quality and artisanal foods, and the increasing interest in functional foods.

 

Mr. Russo will also discuss many of the challenges and opportunities coffee enterprises face caused by the increasing diversity of opportunities for consumers to access coffee. These include issues relating to the allocation and cost of capital, the decreasing throughput of individual pieces of equipment because of the fragmenting of the coffee market, and the changing relationships of suppliers and retailers as retailers shift focus to follow consumer trends.

 

The General Session will also include a talk by Marc Beckmann, of the NKG Partnership of Sustainability, on the industry's increasing response to "Achieving Global Sustainability."

 

Following the early morning General Session, the Conference will break out into its two-track program for the next two days, designed to provide coffee professionals and others with comprehensive knowledge of the fundamentals and past-year developments.

 

Track 1, “Total Quality & New Realities,” consists of a nine-session program covering seed to cup, and highlighting a review of the new FDA Bioterrorism Regulations scheduled to be published a few days earlier and to take effect in December, as well as cupping and grading demonstrations, a tour of an area roaster and sessions on water quality, espresso, and new robusta coffees. Track 2, “The Frontline of Coffee Marketing,” will highlight latest consumption developments in liquid coffee, office coffee, and robusta specialty opportunities, the increasing appeal of single origin, whole bean and certified coffees, new distribution channels and packaging innovations and the challenge of keeping your marketing in line with your organization's core mission.

 

A lot has happened in coffee since last year's Educational Conference, which was quickly oversubscribed. For further information or to register, please visit the NCA homepage at www.ncausa.org. For hotel accommodations, call the Metropolitan Hotel at 1-800-836-6471 or 212-752-7000.

 

 

"Coffee on the Hill" Set for Next Month -- Add Your Voice

 

Time is drawing short for next month's "Coffee on the Hill 2003" event, scheduled for September 16 & 17 in Washington, DC, during which coffee industry professionals will let elected officials know their views on the critical issues now affecting the coffee industry. If you have not previously done so, please review the registration and other materials previously sent to you by clicking on the button on the right hand side of The Coffee Reporter e-mail you received, or by patching http://www.ncausa.org/public/pages/index.cfm?pageid=279 into your browser address bar.

 

Coffee on the Hill is the industry’s opportunity to make its interests and issues known to lawmakers in Washington. You participation is strongly urged so that Congress can be made aware of the important role that coffee plays in our economy, as well as inform them of key issues important to the vitality of our business.

 

Information on the website contains the "Coffee on the Hill 2003" event schedule, registration forms, information on accommodations, sample letters to send to your representatives to urge their participation and to schedule personal appointments, and further information and some of the points that need to be conveyed to legislators on these important issues.

 

Your voice is needed. Please register and plan to attend. For additional information call NCA at (212) 766 4007.

 

 

William J. Maher III, Son of William Maher of Ellis Coffee, KIA Iraq

 

NCA has received word that William J. Maher III, a son of William Maher of Ellis Coffee Company, was killed in action in Iraq on July 28.

 

The younger Mr. Maher, 35, of Yardley, PA, was assigned to the Headquarters Company, 1st Battalion, 36th Infantry Regiment, of the 1st Armored Division. He was killed by an improvised explosive device while travelling in a convoy in Baghdad.

 

A scholarship fund has been sent up in Mr. Maher’s name.  Contributions may be sent to the William J. Maher III Scholarship Fund, c/o Conwell Egan Catholic High School, 611 Wistar Road, Fairless Hills, PA  19057.

 

Mr. Maher is survived by his parents, William J. and Adeline Maher, his sister, Kelly Massimini; his brother, Bryan; and his grandparents, Marion DiRienzo and Amelia Maher.

 

 

Coffee-Drinking Again Shown to Reduce Cirrhosis Risk

 

BeverageDaily.com reported earlier this month that, according to a Norwegian study published last month in the Annals of Epidemiology, drinking three cups of coffee daily may reduce the risk of mortality from liver cirrhosis.

 

The research team from the Norwegian Institute of Public Health in Oslo followed up 51,306 adults who had undergone screening for cardiovascular disease from 1977 to 1983. During this time, 53 deaths were cirrhosis-related, and 36 of these deaths were attributed to alcoholic cirrhosis.

 

The relative risk of liver cirrhosis, adjusted for sex, age, alcohol use and other major cardiovascular risk factors, seemed to be reduced by 40 per cent for those drinking three daily cups of coffee. For alcoholic cirrhosis the results were identical, the researchers reported.

 

“The present study confirms the existence of an inverse association between coffee consumption and liver cirrhosis,” concluded the researchers, although they could not explain which component of coffee was producing the protective effect. The beneficial ingredient is unlikely to be caffeine however.

 

This study corroborates others in recent years showing an inverse relationship between coffee drinking and cirrhosis. The full study may be found in Annals of Epidemiology, Volume 13, Issue 6 (July 2003), pp 419-423.

 

 

USDA Report on Vietnam Coffee Quality Standards

 

Improving the quality of its coffee exports is one of the key objectives of Vietnam’s Coffee Sector Development Strategy, according to a recent USDA Foreign Agricultural Service (FAS) Attaché Report. However, implementing standards introduced to improve the quality of its coffee appears to be taking time.

 

Also last month, the Vietnam News Agency issued a statement in which President Tran Duc Luong is quoted urging Central Highland farmers to consider alternative crops (see related story).

 

According to the July 31 FAS Attaché Report, the Vietnam Coffee and Cocoa Association (VICOFA) led a government quality improvement Technical Committee that developed five new grading standards for its coffee, which were issued in 2001 by the Ministry of Science and Environment.

 

More than 90 per cent of the coffee produced in Vietnam is exported, the Report noted, but “many traders and importers feel the quality of Vietnam's robusta coffee is relatively poor.” While the quality of Vietnam's arabica coffee is higher, arabica exports only total about 3 to 4 per cent of total exports. The new standards, which according to the report “conform (mostly) to international standards,” were a response.

 

The new standards introduced major changes to Vietnam's coffee grading system by applying the international defect counting system, which replaced the traditional method, based on an analysis of a sample for set parameters (such as moisture percentage, percentage of black and broken beans, and foreign matter percentage). According to the new Vietnamese standard, coffee is classified into 6 grades, from Special to Grade 5. One key difference from International Coffee Organization (ICO) Resolution 407 standards, the Report notes, is that the Vietnamese standard sets the maximum moisture level at 13 percent, instead of the ICO's 12.5 percent level.

 

VICOFA's efforts to promote the new standards are confronting several large problems, the FAS Report stated. Most Vietnamese coffee exporters are unfamiliar with the defect counting system and only a few well-equipped coffee processors are capable of grading coffee in accordance with the new standard. Also, the Report noted, many foreign importers are not eager to use the new system, since they are accustomed to the old looser standards. Buyers said they have dealt with the traditional standard for quite a long time and still find it convenient.

 

With a lack of enforcement measures to force exporters and importers to use the new standard, traders are using both systems, based on the importers' requirements. One foreign trader said that during the peak harvest period, when raw coffee quality was quite consistent and uniform, his company did purchase Vietnamese coffee graded under the new defect counting system without any problems either in the coffee quality or in using the new grading standard itself. However, after the peak harvest season, his company stopped using the new standard because it would be difficult to grade coffee in accordance with the new standard if the coffee were taken from different holding stocks with large variations in quality.

 

In 2002 VICOFA informed the ICO that Vietnam would implement the new standards for the 2002/03 coffee crop starting in October 2002, but in a follow-up letter in May 2003, VICOFA outlined conferences, codes of conduct, and other measures Vietnam has taken to explain and promote use of the new standards, but also noted it was too early to apply all aspects of Resolution 407, as Vietnam needed more time to tackle various issues, including (1) what to do with coffee that may not be exported under the new standards; (2) the need to develop a legal policy system for coffee quality disputes; and (3) the need to find financial resources to promote the new standards.

 

The FAS Attaché Report noted that in the past, Vietnam has tried to implement other programs to address “the global oversupply of coffee,” but Vietnam does not have the financial resources to fund large operations. Vietnam participated in the Association of Coffee Producing Countries' (ACPC) coffee retention program in 2001. The Government of Vietnam spent hundreds of billion of Vietnam Dong to cover the storage costs for retaining 150,000 metric tons of coffee for six months in 2001, but was eventually forced to release the coffee. Likewise, Vietnam could not take part in ICO's program to destroy five percent of the 2001-crop, which would have cost Vietnam more than $13 million, the Report said.

 

 

Vietnamese President Urges Province to Reduce Coffee Acreage

 

According to a statement issued by the Vietnam News Agency in late July, Vietnamese President Tran Duc Luong has asked the central highland province of Lam Dong to “work carefully on the planning of its coffee growing acreage” -- in line with the market's demand, while ensuring growers' benefit.

 

He said that coffee-growing countries in the rest of the world have been shrinking their coffee acreage in an effort to stabilize the price of coffee on the world market and protect growers' interests.

 

The President suggested that the province should replace coffee with other food or industrial crops such as cashews, maize or cotton if the coffee-growing acreage was found to be too large.

 

The President also asked the provincial authorities to reconsider its GDP growth rate of 11-15.2 percent, saying the target was higher than the national average while the province has been rated as poor and still relied too much on agriculture.

 

According to the news agency report, President Luong advised the province to roll out the "red carpet" to welcome investors to the locality, especially for industry, to help spur its development.

 

 

Coffee and Exercise

 

According to the BBC News Service, Australian researchers have found that even a small quantity of caffeine allowed athletes to exercise almost a third longer, and burn more fat during workouts.

 

The Australian Institute of Sport team found that caffeine triggers the muscles to start using fat as an energy source rather than carbohydrate sugars. A single cup of coffee may be sufficient to trigger these effects, the researchers found.

 

The researchers tested coffee effects on cyclists, who were allowed to sip as they pedaled. Those who did were able to keep going longer than those who stuck to water.

Caffeine has been used by many endurance athletes as a way of eking extra energy out of their body's reserves during an event. Many, though, are still advised to steer clear of coffee or cola before exercise because the belief persists that it has a diuretic effect that could contribute to dehydration.

 

This, according to sports dietician Jane Griffiths, is actually a myth.

 

She told BBC News Online: "If you drink a large quantity of caffeine - perhaps 300 milligrams - in one sitting, there might be a diuretic effect, but not if you drink this amount over a day." Three hundred milligrams is the equivalent of about three and half cups of coffee.

 

Ms. Griffiths told BBC that taking caffeine prior to exercise might help not only elite athletes, but also amateur players.

 

Unfortunately, she noted, drinking caffeine without exercising does not result in fat-burning -- both have to be combined.

 

Other studies also suggest the beneficial effects of caffeine during exercise, delaying the onset of fatigue by up to 60 percent, BBC reported.

 

 

Ethiopia Coffee Production 3.3 Million Bags, Up 79 Percent

 

Ethiopian coffee output rose 79 percent in the 12 months to the end of July, with a 20 percent growth in exports for the same period, according to a government source reported by Oster Dow Jones in Nairobi.

 

Alamirew Geberehiwed, head of information and public services at the government-run Coffee and Tea Authority, said 3.283 million 60-kilogram bags (197,000 metric tons) were produced between July 2002 and July 2003, up from the 1.831 million bags (109,895 tons) produced during the previous year. He said exports were 2.114 million bags (126,855 tons) against last year's 1.759 million bags (105,567 tons).

 

"Many factors contributed to the rise, including good weather in some producing areas, which boosted supply at auction centers," Mr. Geberehiwed said. Ethiopia's coffee season runs from October to September. The harvest for the 2003/04 season will commence in October, with the crop now flowering, the report noted.

 

 

Retail prices (all sizes/per pound)

 

Ground roast

 

 

June '03

May '03

June '02

May '02

U.S. Avg

2.931

2.937

2.938

3.011

Northeast

3.364

3.290

3.380

3.432

Midwest

2.687

2.696

2.493

2.529

South

2.736

2.736

2.652

2.693

West

2.962

3.047

3.426

3.705

Source: U.S. Bureau of Labor Statistics

 

The ICO composite average indicator prices

 

 

Colombian Mild

Arabicas

"Other Mild"

Arabicas

Brazilian & Other

Arabicas

Robustas

Composite Price

February

69.60

67.60

48.54

42.35

54.07

March

61.82

61.66

43.77

38.26

49.61

April

66.12

65.35

48.71

38.68

51.87

May

67.56

66.47

51.06

38.90

53.19

June

65.01

61.34

47.11

35.33

48.90

July

67.84

62.32

49.64

36.71

50.89