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Volume 8, Number 7           July 2003



SAG/PEC Antioxidant Workshop at Biannual ASIC Conference. 1

"Coffee on the Hill" Update. 2

NCA Fall Education Conference Update. 2

ISIC to Match €4.5 Million Promoting Coffee in Europe Over Three Years. 4

Second Study Shows Coffee May Cut Diabetes Risk. 4

USDA Projects 107.1 Million Bags for 2003/04, Down 13 Percent 6

Fedecafé to Resurrect Juan Valdez in $9 Million U.S. Consumption Campaign. 7

Colombia Working to Increase Domestic Coffee Consumption. 8

NYBOT Upgrades Peruvian, Honduran and Indian Coffees. 8

Australian Coffee Production to Grow, New Development Council Says. 9

Retail prices (all sizes/per pound) 9

The ICO composite average indicator prices. 10


SAG/PEC Antioxidant Workshop at Biannual ASIC Conference


A special workshop on recent promising research concerning the very high levels of antioxidants found in coffee will be co-sponsored by NCA's Scientific Advisory Group (SAG), and its European counterpart, PEC (Physiological Effects of Coffee), at the next International Conference on Coffee Science, to be held Oct. 27-31, on Kauai, Hawaii.


The Conference, held every two years, is sponsored by Paris-based ASIC (Association Scientifique International du Café). ASIC was founded in 1966 to distribute scientific knowledge about coffee as widely as possible, as well as technical and applied knowledge, and to facilitate exchanges between experts. Its last conference was held in Trieste, Italy, in 2001. Conferences alternate between consuming and producing locales.


Antioxidants, which have received increasing attention in recent years, are compounds that inhibit oxidation of cells in the body, and are believed to protect against degenerative diseases like cancer and heart disease. Certain foods are known to contain antioxidant compounds, but the activities of those compounds in the body, their chemical profile in plasma, their absorption, metabolic fate and bioavailabilities are less clear.


The SAG/PEC-sponsored program will present scientists from Italy, Switzerland, Germany and the U.S., discussing the role and importance of antioxidants in the diet, chemical characterization of antioxidants in coffee, quantitative assessment of anti-oxidants in coffee, the availability to human tissues of antioxidant compounds consumed in coffee and their actual antioxidant capacities in the body, and a panel discussion on future research directions.


One presenter will be Dr. Cristina Scaccini, of the National Institute for Food and Nutrition Research, in Rome, who will discuss research finding that coffee's antioxidant properties are highly available within the body and are superior to tea and other beverages.


Other programs at the Conference will focus on other aspects of coffee and health, as well as on coffee agronomy and technology. The mix of experts from various disciplines, allowing the cross-pollination of information, is one of the aims of the biannual Conference.


Further information about these programs and registration may be found at the ASIC website:



"Coffee on the Hill" Update


Detailed information on NCA's "Coffee on the Hill 2003" was e-mailed to members in early July. During the event, scheduled for September 16 & 17, in Washington, DC, coffee industry professionals will let elected officials know their views on the critical issues now affecting the coffee industry.


The information sent contained the event schedule, registration forms, information on accommodations, sample letters to send to your representatives to urge their participation and to schedule personal appointments, and an outline of some of the issues to be addressed at the event.


In order to access the letter and the information it provides, go to


Many issues confront the coffee industry. Your voice is needed. Please register and plan to attend. For additional information call NCA at (212) 766 4007.



NCA Fall Education Conference Update


The complete program and registration materials for the NCA Fall Education Conference are now posted on the NCA website, The conference, set for Oct. 16 & 17 at the Metropolitan Hotel in New York City, is designed to provide coffee professionals and others with comprehensive knowledge of the fundamentals and past-year developments in either coffee production, in Track 1, "Total Quality & New Realities," or the business of coffee, in Track 2, "The Frontline of Coffee Marketing."


This year's program begins with a General Session kick-off for both tracks featuring Ralph Russo, President and CEO of Sara Lee Coffee & Tea Foodservice, providing his view of industry developments in "New Products & Trends." The industry has gone through much change in the past few years, Mr. Russo notes, and rather than slowing down, the change is accelerating. Then Marc Beckmann, of the NKG Partnership of Sustainability, will discuss the increasing responsibility to achieve sustainability the coffee industry faces, how companies are reacting and how this could change the coffee industry in the future, in "Achieving Global Sustainability."


The two tracks then break out. Track 1, "Total Quality & New Realities," will take participants step-by-step through a two-day, nine-session program that will go from agriculture and processing, in "Coffee at Origin," through an extremely timely presentation on "How Coffee Traffic Will be Effected by the New Bioterrorism Regulations" (the new regulations are scheduled to be published in October and to take effect on Dec. 12), and on to a tutorial on "Cupping and Grading" at the new New York Board of Trade facilities in lower Manhattan. Day two will include sessions on "Ensuring Quality in the Roasting Process," "Achieving a Gold Cup Standard in Brewing," and "Brewing Good Coffee Starts with Good Water," and will also cover the finer points of "What Makes Espresso, Espresso," which will discuss the distinct characteristics of the espresso beverage, and "Robustas: The Full Story," which will review robustas' processing, trading history, production and usage, and examine the opportunities residing in what is now seen as the poor relative in the coffee family. 


Track 1 will conclude with a "Roaster Tour" at the roasting facility of Dallis Bros., a major specialty roaster in the New York area.


Participants in Track 2, "The Frontline of Coffee Marketing," will receive a wide variety of perspectives on latest developments in the coffee business from large and small companies, as well as the latest news on recent positive research findings about coffee and health and how that may impact consumer attitudes, and a look at developments in the overall non-alcoholic beverages category.


Track 2 will include presentations on the opportunities presented by new developments in liquid coffee, adding value to the office coffee sector with branded coffees, the potential of robusta coffee, the benefits of the single origin mystique, the increasing consumer-appeal of whole-bean, accommodating new realities in certified coffees, the practical use of new distribution channels opened up by the internet, and opportunities deriving from current packaging innovations will be rounded out with sessions on the opportunities and challenges of corporate social responsibility, managing media crises, keeping marketing in line with your organization's core mission and the challenges and opportunities of corporate social responsibility.


Many developments have occurred in both the production and marketing of coffee in the past year. Last year's Education Conference was quickly over-subscribed. For further information or to register, please visit the NCA homepage at



ISIC to Match €4.5 Million Promoting Coffee in Europe Over Three Years


The Institute for Scientific Information on Coffee (ISIC) announced last month the establishment of a new three-year "Positively Coffee Market Development Program," beginning in 2004 to promote coffee consumption, and thus help alleviate the current coffee crisis, by providing up to €1.5 million (about $1.3 million) yearly in matching funds to European national coffee associations for coffee promotion initiatives.


ISIC, a European coffee-industry organization based in Paris, was established in 1991 to promote coffee by supporting public information education and scientific research concerning coffee. It has since sponsored 32 studies, with 14 more underway. The new program will be sponsored by ISIC, but administered under the aegis of ICO.


The new program will provide a maximum of €300,000 per year each to national coffee associations in Europe to match funds spent by the associations on promotional activities. The program will be evaluated for effectiveness after the first and second years.


In a letter sent by ISIC President Dr. Ernesto Illy to the presidents of major European coffee associations inviting them to urge their national association members to submit proposals for matching funds, the program was described as being based on a "bottom up approach," in which each national association will design promotions most suited to their own national audiences. Upon approval, the new program will match funds raised by the national associations to implement the promotions.


The new Positively Coffee Market Development Program will complement the already existing Positively Coffee program, which is a "top down" design in which health-oriented promotional messages and literature are developed centrally by the Positively Coffee program and distributed to national sectors for use, as appropriate, in their own markets. The combination of the two complementary approaches should enhance both efforts.


Eligible national sector participants are urged to submit proposals by September 15, for January 2004 implementation.



Second Study Shows Coffee May Cut Diabetes Risk


A study by Harvard School of Public Health researchers presented last month at the American Diabetes Association (ADA) annual meeting in New Orleans appears to corroborate findings of a Dutch study published in The Lancet last fall, which found coffee drinking helps protect against the development of Type 2 diabetes.


Type 2 diabetes results from insulin resistance, a condition in which the body fails to properly use insulin, the hormone needed to convert sugars, starches and other food into energy in the cells. Insulin "unlocks" the body's cells, according to the ADA, allowing glucose to enter and fuel them. Ninety-five percent of diabetes is Type 2. Type 1 diabetes, affecting 5 percent of cases, is the complete inability to produce insulin. Around 17 million Americans have Type 2 diabetes, and many more are undiagnosed.


The Harvard study looked at data collected from 42,888 men and 85,056 women who were followed for 12 and 18 years respectively in two famous long-term epidemiological studies, the Health Professionals Follow-up Study and the Nurses' Health Study. All subjects were diabetes-free when the studies began and their coffee drinking and other habits were assessed bi-annually throughout the studies. During follow-up, thirteen hundred of the men and 4,000 of the women developed Type 2 diabetes, but men who drank 4 or more cups of coffee a day had a 29 percent lower incidence of diabetes than those who drank three or fewer cups. Men who drank 6 or more cups had a 54 percent lower risk of getting the disease. Women who drank four cups also reduced their risk 30 percent, though greater consumption was not associated with further risk reduction.


In last November's Lancet study, conducted at Vrije University in Amsterdam, researchers had examined epidemiological data from 17,111 Dutch men and women followed over 125,774 person-years, and found those who drank seven cups of coffee per day were half as likely to develop the disease as those who drank two cups or fewer.


Scientists are uncertain what causes the effect, and many former sceptics are surprised, since other studies that have looked at the effect of a single cup of coffee have shown that acute administration of caffeine decreases insulin's effectiveness and the ability to process glucose.


The Harvard study appears to confirm that it is the caffeine in coffee that is responsible for the positive long-term effect. One of the authors, Frank Hu, MD, PhD, Associate Professor of Nutrition and Epidemiology at the Harvard School of Public Health, told colleagues at the ADA's 63rd Scientific Session that his group also studied the effect of other compounds in coffee, including magnesium, niacin, potassium and the antioxidant tocopherol, by examining the data for tea and decaf consumption as well. Decaf also contains these substances. Tea has other substances, but much less caffeine than coffee.


There was a "modest reduction in risk" for decaf drinkers, he said, but the researchers were unable to control for the amount of regular coffee the decaf drinkers also drank. Tea had no effect.


The researchers also examined diabetes risk reduction for total caffeine intake from colas and other foods, in addition to coffee intake, and found that people in the highest fifth of caffeine intake had lower risk. Men were 22 percent less likely, and women 30 percent less likely, to develop diabetes.


"When the Dutch study came out, I was shocked. But now with this second study that shows the same thing, you start to believe it," Terry E. Graham, PhD, Chair of Human Biology and Nutritional Sciences at the University of Guelph in Ontario, Canada, was quoted in a report of the meeting in Medscape. Dr. Graham had presented a different study examining the acute effect of the equivalent of two cups of coffee on 12 men who already have Type 2 diabetes, which found increased insulin sensitivity and higher glucose levels. His study of the acute affects of caffeine, and the Dutch and Harvard studies of the long-term effects of coffee, would seem to be counterintuitive.


However, he noted, the Harvard study is even more thorough than the first, with more accurate data about the participants' coffee habits over 10 to 15 years. "Plus, they evaluated tea and decaf, which the first study didn't."


One possible reason for the result, according to Dr. Hu, might be that caffeine stimulates thermogenesis and increases energy expenditure. "This could decrease obesity rates and thus diabetes." Other studies looking at this question are ongoing.


According to the report in Medscape, Dr. Hu said that he is not yet ready to recommend coffee for diabetes prevention. "We still need more study," he said. But for the diabetic patients who ask if coffee is detrimental, he noted, "I don't think they have to worry."



USDA Projects 107.1 Million Bags for 2003/04, Down 13 Percent


According to the “Tropical Products; World Markets and Trade” USDA Foreign Agriculture Service  (FAS) report, 2003/04 world coffee production will total 107.1 million 60-kilo bags, down 13 per cent from the 2002/03 level of 122.7 million bags.


"Most of the reduction is attributed to the substantial decline in Brazil's 2003/04 coffee production level," FAS reported. Brazil’s production of coffee during 2003/04 is forecast at 33.6 million bags, a drop from 51.6 million bags in the previous year.


Total world 2003/04 supply, including stocks, is forecast at 136.2 million bags, down nearly 6 percent from the previous year, mainly because of the lower crop in Brazil. Because of the lower supplies, total coffee exports are also expected to drop in 2003/04, to 86.9 million bags, a decrease of 2.1 million. However, to maintain even this level of export, FAS projects ending stocks for the year to drop to only 20.7 million bags, 7 million less than this year.


FAS does project some countries will increase production in 2003/04, partially offsetting the Brazilian decline. Colombia is projected to increase production by an additional 900,000 bags, Vietnam by 500,000, Mexico by 300,000, Ethiopia by 250,000, Honduras by 200,000, Thailand by 143,000, Kenya by 132,000, and Peru, Ecuador and Uganda by 100,000 bags each.


Much of the significant reduction in Brazilian production is a consequence of "expected lower yields, especially in the arabica-producing regions," FAS said. Many trees will be on the off-year cycle after record crops in 2002/03, with many plantations being pruned and stumped. Arabica coffee production in Brazil for 2003/04 is expected to be 23.3 million bags, 41 per cent less than 2002/03, and robusta production is forecast at 10.3 million bags, down 1.7 million bags from 2002/03. 


However, although much of the reduction seems to be cyclical, a significant portion may represent permanent loss of production due to the current crisis. "Depressed coffee prices also led to under-average crop management for many producing regions. Growers reduced their use of inputs (lime, fertilizer, chemicals) to cut costs,” the FAS reported. “Depressed coffee prices led some producers to abandon their plantations, shifting to more profitable crops such as soybeans, corn and sugarcane.”



Fedecafé to Resurrect Juan Valdez in $9 Million U.S. Consumption Campaign


After a more than year-long hiatus the National Federation of Coffee Growers of Colombia (Fedecafé) has announced plans to launch a new U.S. consumption campaign featuring Juan Valdez.


According to a report from Reuters, the $9 million budgeted campaign will coincide with the slated September launch of Colombia's first gourmet coffee shop abroad, in New York City. There, coffee lovers will be able to snap up premium beans as wells as T-shirts and coffee cups bearing Valdez' mustachioed grin. "In July, we'll be putting the finishing touches to the new (advertising) strategy and in September, after everybody is back from summer vacations, it will be ready," Fedecafé General Manager Dr. Gabriel Silva told the news service.


The Federation retired Valdez and his trusty mule more than a year ago due to budget cuts, according to the Reuters report. U.S. based Interpublic Group, Inc., the world's second-largest owner of advertising agencies, won the contract to resurrect him, and in what may be a sign of things to come, an agency owned by Interpublic helped promote Valdez's first motion picture appearance this year. Valdez won a cameo role in Jim Carrey's latest film, "Bruce Almighty," in which he pours the lead character a cup of coffee. "Looking at the movie, this was a new direction," said Josh Gilbert, Senior Vice President at Weber Shandwick, which is owned by Interpublic and is handling public relations for the Colombia account. "The movie introduced him to new audiences."


Juan Valdez was created in 1960 by New York-based DDB Worldwide Marketing and immediately became one of the most successful characters in advertising history. He has arguably been Colombia's best diplomat. He has posed for pictures with former U.S. President Bill Clinton and was awarded Colombia's National Order of Merit in the Grade of the Silver Cross. Between 1995 and 1999, Colombia poured $40 million a year into advertising. In 2001, Colombia, the world's second-largest coffee producer after Brazil, spent nearly $30 million, before shutting the campaign down the following year.


In addition to promoting the direct to consumer Juan Valdez coffee shops, the new ad campaign will be directed to appeal to younger drinkers, according to an article in Adweek.





Colombia Working to Increase Domestic Coffee Consumption


The Colombian coffee industry will spend 6 billion pesos (about $215,000) this year on an advertising campaign aimed at doubling domestic coffee consumption by 2008, the country's National Federation of Coffee Growers, or Fedecafé, said, according to a report from Oster/DowJones in Bogotá.


As in Fedecafé's initiatives to promote U.S. consumption (see related story), the advertisements will target young people in Colombia. The U.S. effort will build the Colombian Coffee brand using Fedecafé's iconic Juan Valdez character. In Colombia, they will seek to dispel the myth that drinking coffee causes health problems.


The campaign will be funded by Fedecafé and three private companies in Colombia that package and sell coffee, Fedecafé said in a statement.


For the past 15 years, Colombians have consumed roughly 2 kilograms of coffee per year -- less than half the amount consumed by people in the rest of the world, according to Fedecafé. Colombia is the world's largest producer of mild washed arabica coffee. According to the USDA Foreign Agriculture Service, in 2002/03 Colombia produced 10.9 million bags of coffee and consumed 1.6 million.


NYBOT Upgrades Peruvian, Honduran and Indian Coffees


The New York Board of Trade (NYBOT) announced last month that, effective with the July 2005 delivery, its Coffee, Sugar and Cocoa Exchange (CSCE) Coffee Rules will be amended to provide that the differential for delivery of coffee from Peru and Honduras will be zero (i.e., they will be delivered at par), and the differential for delivery of coffee from India will be minus 100 points.


Current differentials for Peruvian and Honduran coffees are each minus 100 points, and the differential for Indian is minus 300 points.


The differential for delivery of a coffee refers to the discount, or premium, in price a buyer is either entitled to or required to pay when accepting delivery of a particular coffee in fulfilment of a C-contract. Every hundred points of differential is equivalent to a cent per pound. Differentials for various coffees, whether discounts, premiums, or par, are part of the contract and are determined by the CSCE Coffee Committee.


NYBOT’s coffee contract calls for delivery of washed Arabica coffee produced in nineteen Central and South American, Asian and African countries.

Each contract is for roughly 250 bags of coffee (or 37,500 pounds). 


"What the changes reflect is a belief on the part of the Coffee Committee that the average quality of c-style coffees from Peru, Honduras and India have improved, based on cash market trends in the last few years," said NYBOT Vice President for Market Development Tim Barry.


"The Coffee Committee is made up of representatives from various sectors of the coffee trade, and it includes many members active in the cash coffee market. We rely on the collective knowledge gained by the individual members to keep the contract abreast of developments in the changing cash market," he explained.


"The change should make the futures contract a more attractive hedging vehicle for owners of Peruvian, Honduran and Indian coffees."


The text of the new amendments to the Coffee Rules is available for free to interested parties by calling 212-748-4090.


Australian Coffee Production to Grow, New Development Council Says


The Queensland coffee growing industry is "leading the sector's charge to become a formidable force in the worldwide production market," according to a report in the Queensland Herald-Sun.


The fledgling industry, established in northern New South Wales and far north Queensland, hopes to "latch on to the growth in roasted and ground coffee sales," the paper reported.


About 48,000 metric tons (800,000 60-kilogram bags) are imported to Australia each year, according to the report. Only 500 metric tons (8,333 bags) are produced domestically. A metric ton is 1000 kilograms.


The Chairman of the new Australian Coffee Research and Development Advisory Council, David Peasley, said there is enormous opportunity for domestic growers to tap the coffee market, the report stated.


"There's a major shortfall between what's imported and what we grow locally, and we can fill some of that," Mr. Peasley said. "Our coffee is of an international standard, we have the systems now in place to maintain standards, and it is a matter of getting it out there for people to drink."


"What we have to do is keep our standards up and keep the cowboys out of the industry."

Retail prices (all sizes/per pound)


Ground roast



May '03

April '03

May '02

April '02

U.S. Avg

























Source: U.S. Bureau of Labor Statistics


The ICO composite average indicator prices



Colombian Mild


"Other Mild"


Brazilian & Other



Composite Price