Uganda coffee fetches $48.6 million in just two months

Uganda’s coffee export volumes increased to 446,286 bags, bringing in Ush86.5 billion ($48.6 million) in the past two months as stocks of the world’s second most traded commodity ran out globally.

Compared with same months in the previous year (2007/2008), this year’s earnings shot up in value by $10 million.

In 2007/2008, over the same months, the country exported 371,440 bags valued at $38.6, according to the monthly reports from Uganda Coffee Development Authority (UCDA).
UCDA attributes the surge to the harvesting and marketing of the 2008/2009 coffee crop, which has has received favour from good weather and fair prices in international markets. Coffee reaching the export grading factories was also of very good quality and desirable moisture content.

Coupled with the harvesting of high altitude Arabica coffee, which had been delayed by bad weather, this month’s volumes are projected to swell to the tune of 300,000 bags, some 40,000 bags more than realised in December last year.

The projection is based on favourable weather for the drying process and on farmers cashing in on the festive Christmas season.

Increased production in the 2008/2009-crop year will however, not have a significant impact on the global stocks, according to industry experts, because the current yield will be used to reconstitute declining stock as well as to respond to requirements for domestic consumption and exports.
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Men more responsive to caffeine, but is it psychological?

A strong cup of coffee has a greater effect on men than women, research shows.

In a study on 668 healthy volunteers, an espresso pepped up men after just 10 minutes. Women also became more alert after the beverage, but less so.

The University of Barcelona researchers say some of this effect might be psychological because decaffeinated coffee also worked to some extent.

Progress in Neuro-Psychopharmacology & Biological Psychiatry reports the work.

The volunteers were asked to drink either a classic espresso containing 100mg of caffeine or a decaffeinated espresso containing 5mg of caffeine.

Then the researchers looked for changes in alertness over the following minutes and hours.

Both men and women saw an improvement in their activity levels after drinking the classic espresso and these effects began after as little as 10 minutes.

Arousing

According to the investigators, 45 minutes is the time needed for maximum caffeine concentration to be reached in the blood, but levels reach half this concentration after just a few minutes.

And the effect appeared to be greater in the men.

The decaf coffee had a similar, but weaker effect and tended to be more potent in the women rather than in the men.

Lead researcher Ana Adan said: "Numerous studies have demonstrated the stimulant effects of caffeine, but none of these have looked at their effects in terms of the consumer's gender."

Anna Denny of the British Nutrition Foundation said: "This study provides an interesting insight into how the effects of specific foods and nutrients may differ between men and women.

"Research into 'gene-nutrient' interactions is moving forward quickly and we are finding out more about how our genetic make-up affects our requirements for certain foods and nutrients, and how our bodies react to these. In the future this could allow scientists to formulate dietary recommendations based on our genetic make up, as well as our age and body size."

Dr Euan Paul of the British Coffee Association said: "This new scientific study demonstrates interesting differences in the positive effects that caffeine may have on alertness between men and women, an area that has not been heavily researched in previous scientific investigations. We welcome further research to investigate with greater certainty any differences in the stimulant effects of caffeine that may be experienced between gender groups."

Uganda: coffee export earnings rise 31.4 percent in November

KAMPALA (Reuters) - Uganda's coffee export earnings rose 31.4 percent to $27.6 million in November from $21 million in October, the coffee board said on Monday.

Data from the Uganda Coffee Development Authority also showed Uganda shipped 266,722 60-kg bags in November, a 48.5 percent rise from October's 179,564 bags.

Uganda is Africa's second biggest coffee producer, growing the robusta variety. Ethiopia is top and mainly grows arabicas.

Output went up 28.4 percent to 371,743 bags in the first two months of the current crop year (Oct/Nov) from 298,165 bags in the same period last year.

"The improvement is attributed to coffee planted under the strategic export programme, which has continued to come on the market; the ongoing coffee production campaign and favourable weather and good prices which translated in good husbandry practices," the board said.

Some 3 million bags worth $368.9 million have been shipped out in the last 11 months, comprising 2.55 million bags of robusta and 0.46 million of arabica.

Some 2.42 million bags worth $236.7 million were exported in a similar period last year.

Region Kenya: Coffee prices rise on quality

Prices for Kenyan coffee improved at Tuesday's auction ahead of a month-long seasonal break and thanks to better quality, an auction official said.

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The average price for all grades rose to $168.25 per 50-kg bag from last week's $167.99 per bag.

Although Kenya produces only about 1 percent of global output its beans are valued by roasters who blend them with coffee from other countries, earning the east African economy an average of some $100 million each year.

"The two main factors are that we are closing for a month and we are also seeing a bit of good qualities," said Daniel Mbithi, an official of a group that conducts sales at the Nairobi Coffee Exchange (NCE).

The auction will resume on January 13.

Beans that have been arriving for sale in the past few weeks have been from the tail end of the fly crop, which do not usually make top notch brews.

But better quality coffee from the main crop is now in the market.

"There is a bit of influx from the main crop and we are starting to see some good prices too," Mbithi said.

A total 20,335 bags were on offer and 16,570 of them sold for a total $3.4 million.

Ethiopia’s Coffee Crop May Fall 60% in Two Main Areas

Coffee output in the two main export-growing areas of Ethiopia, Africa’s largest producer of the beans, may decline 60 percent because of drought, the United Nations said.

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The lower harvest may aggravate malnutrition in southern Ethiopia’s Gedeo and Sidamo zones, where hunger is rife as a result of the drought, falling world coffee prices and higher food prices, the UN Office for the Coordination of Humanitarian Affairs said in a report today.

Production in Gedeo may fall 67 percent from a year earlier, while that in Sidamo may decline 53 percent, Tamirat Mulu, the author of the report, said in a phone interview in the capital, Addis Ababa, today. The report was based on a livelihood assessment carried out by relief agencies between Nov. 17 and Dec. 5. Ethiopia’s main coffee harvest is from October through December.

Ethiopia exported 170,888 metric tons of coffee last year. About 35 percent of that was high-grade washed coffee and 65 percent lower quality dried coffee. Sidama and Gedeo provide about 60 percent of Ethiopia’s washed coffee, Mulu said.

By Jason McLureDec. 17 (Bloomberg)

Vietnam Opens First Coffee Exchange to Boost Exports

Dec. 11 (Bloomberg) -- Vietnam opened its first coffee exchange, giving growers in the world’s biggest producer after Brazil more control in pricing beans and helping the Southeast Asian economy to boost exports from the $2 billion industry.

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Vietnam Technological & Commercial Joint-Stock Bank, Vietnam’s seventh-biggest bank, joined with the Dak Lak People’s Committee and Thai Hoa Joint Stock Co., a trader, to open the exchange today in Buon Ma Thuot, capital of the highlands province of Dak Lak, the nation’s main coffee-growing region.

The venture may help Vietnam to cut pricing discrepancies for the crop within the country, boosting farmers’ confidence in the market and ensuring a steadier supply for exports. Prime Minister Nguyen Tan Dung is trying to boost overseas shipments to counteract the slowest economic expansion since 1999.

“The exchange is definitely good for farmers because their profit margin will increase as they don’t have to go through a middleman,” said Nguyen Tuan Ha, director of the exchange.

The price of robusta, which is used in instant coffee by Nestle SA, has lost 24 percent since the end of June. Vietnam is the world’s biggest exporter of that variety, which closed yesterday on London’s Liffe exchange at $1,887 a metric ton.

At present, Vietnam’s coffee farmers deposit crops with local middlemen, who have storage facilities and sell the beans to domestic and overseas trading companies, speculators and domestic processors. The exchange, which has its own warehouse and will trade from 9 a.m. on weekdays for two hours, will compete with the middlemen if farmers opt to truck their crops to the new venture, shunning traditional purchasers.

Market Target

“The difficulty is persuading farmers to change their habits,” Ha, the exchange director, said in an interview after today’s opening. “We have to convince them the cost of transporting the beans can be well covered by improved profit margins when selling coffee to the exchange.”

The new venture may cut trading costs and offer better prices, according to Le Van Ke, general director of An Giang Joint-Stock Co., a trading company based in Dong Nai province. “It reduces the risk of farmers defaulting,” Ke said.

About 40 percent of the 1 million tons of coffee that Vietnam sells annually to world markets is expected to trade on the exchange, according to Nguyen Duc Vinh, chief executive officer of Hanoi-based Vietnam Technological & Commercial, which is 20 percent owned by HSBC Holdings Plc.

Futures Contracts

“The exchange will start with physical contracts first and we aim to handle futures contracts in 6 to 12 months,” Vinh said by telephone yesterday. Techcombank, as the lender is known, has spent about 10 billion dong ($592,000) on equipment for the exchange, Vinh said.

“Brazil has had success with their exchange that helps farmers price their product more efficiently,” said Pamela Thornton, a portfolio manager at Armajaro (USA) Inc., which runs a coffee and cocoa fund of more than $400 million.

“Farmers may not know the final price of beans shipped to New York but they know what price to ship within their country,” Thornton said in a Dec. 9 interview. “This creates a kind of transparency and price efficiency.”

The difference between prices in local exchanges in Brazil and Vietnam, and the global benchmarks in New York and London will also help arbitrage opportunities, Thornton added.

‘Good Opportunity’

“It’s a good opportunity to maximize returns” for farmers and funds, said Robin Dand, product manager for commodity derivatives at NYSE Euronext in London. Farmers can see “what price their produce is and what they’re able to obtain in the open market rather than at the farm gates.”

Vietnam’s coffee shipments totaled 853,000 tons and were worth $1.8 billion in the first 11 months of the year, a 6.6 percent increase in value from a year earlier while the volume fell 21 percent, according to data from the General Statistics Office. Commodities account for about a third of Vietnam’s exports, and coffee is the most valuable crop after rice.

Vo Sy Gia, a 52-year-old farmer who lives 70 kilometers (44 miles) from the new exchange, said he was debating whether to switch his business away from the middlemen, and holding talks with other local growers about sharing transport costs.

“I believe we would get a better price and that it’s less risky to do business with the exchange than with a middleman,” Gia, 52 said. “But I’m not sure if the profit margins will improve enough to cover the extra costs.”

To contact the reporters on this story: Beth Thomas in Buon Ma Thuot at bthomas1@bloomberg.net; Nguyen Dieu Tu Uyen in Buon Ma Thuot at uyen1@bloomberg.net; Claire Leow in Buon Ma Thuot at cleow@bloomberg.net

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