Dock workers at Brazil’s Santos Port say to strike on Wednesday

Dock workers at Brazil’s Santos Port say to strike on Wednesday – RTRS
09-Jul-2013 10:35
Likely to affect containers more than bulk cargo
Workers object to private terminal’s hiring practices

SAO PAULO, July 9 (Reuters) – Dock workers at Brazil’s key shipping port of Santos, the largest in South America, are planning a 24-hour strike on Wednesday to protest a port reform recently passed by Congress, a union leader said.
Stevedores were already protesting at the entrance of the port that is near Sao Paulo, the country’s largest city, which is on holiday on Tuesday. That resulted in a 3 kilometer (1.86 mile) traffic jam on the highway leading to the port, private road operator Ecovias said on Twitter.
The National Stevedores Association in Brasilia said workers at other ports had decided against a July 10 strike and would instead join a variety of industries in Brazil planning a general strike on July 11, but the Santos union plans to go ahead with a walkout a day earlier.
“We had a meeting yesterday, nothing was accomplished and tomorrow we are going to have a 24-hour stoppage,” said Cesar Rodrigues Alves, a senior representative of the union of stevedores at Santos port.
Dock workers are afraid a drive to privatize port terminals under legislation Congress passed on May 16 will lead to a loss of jobs and benefits because private operators would not have to hire through the centralized agency, “OGMO.” (Full Story)
They say Embraport, a new $1.2 billion private container terminal on the left margin of Santos owned by local infrastructure group Odebrecht Transport, the United Arab Emirates’ DP World DPW.DI and trading company Coimex, is not hiring through OGMO.
The port strike threat comes on the heels of a three-day truck driver protest last week and after nationwide demonstrations that attracted 1 million participants at their peak in late June.
Brazil is currently exporting record soy, corn and sugar crops. Stevedores at Santos held a two-day strike in May, holding up 14 ships mostly carrying containers but having a limited affect on bulk cargo. (Full Story)
Typically, bulk cargo such as soy and corn are less affected by labor stoppages because they require fewer workers. The movement of container goods with perishables such as coffee, bagged sugar and meats are more vulnerable.
(Reporting by Caroline Stauffer; Editing by Nick Zieminski)

Growing Coffee in Asia’s poorest nation

Asia’s smallest, youngest and poorest nation is defined by post-independence violence and oil reserves but coffee there represents the great hope. Coffee accounts for 90 percent of the country’s non-oil exports, while 46 percent of East Timorese households rely solely on coffee for their income

The crop has grown in the country for centuries. It accounted for half of the country’s trade when it was a Portuguese colony in the late 1800’s, but during 24 years of Indonesian occupation the bumper business was neglected when the military took over – prices fluctuated and many coffee plantations were battlefields so the quality of beans worsened.

By the war’s end, agricultural experts estimated two generation’s worth of farming knowledge was lost and some plantations looked more like jungles.

But because the trees got little attention the pesticide and fertiliser-free groves are now a goldfield for organic coffee lovers. Today, the coffee is known as the golden prince of East Timor agriculture – worth $10m a year, 46,000 coffee farms employ one-fifth of East Timor’s population but it is a major battle to encourage farmers to improve the quality of East Timor’s agriculture.

They have some of the world’s oldest coffee trees growing in poor volcanic soils under skies that bring very unreliable rainfall. It is so bad, that a hectare of Timorese coffee plantation produces half of what the same plot in nearby Papua New Guinea can produce.

Workers do not like pruning trees which would raise production by 10 percent every year because they are afraid of hurting the tree’s spirit.

Building a farming culture that involves good business generally is desperately needed because experts say the country has some of the worst agricultural yields in Asia.

Many communities in East Timor are plagued by what they call “the hungry season” – four months of famine where last year’s crops run out and the next harvest is not ready.

High child mortality rates because of malnutrition and poverty are among the worst in Asia, also farmers often do not save during bumper years.

The private sector arm of the World Bank ranks East Timor among the most difficult places in the world to do business, but a number of NGO’s are trying to rebuild the tiny nation’s subsistence agriculture base and business practices.

For agriculture, it will take a decade to renew the industry for villages crippled by the burden of hunger and poverty; NGO’s like Empreza Di’ak are improving facilities and livelihoods with different projects in a nation where food is largely imported.

Other groups like Seeds of Life are working to identify high yield varieties of staple crops best suited the country’s climate.

By introducing reliable seeds they hope to improve livelihoods in Timorese agriculture and deliver higher yields, but efforts to improve food security and seed distribution in this largely agrarian society remain contentious.

Some locals meet modern farming methods and industrialisation with suspicion, saying traditional organic methods and crops are better as they are part of their cultural identity.

In an exclusive interview with 101 East, the country’s new President Taur Matan Ruak says its time for the country to abandon organic subsistence agriculture to lift the nation out of poverty.

With picturesque scenery and a strategic trading location East Timor dreams of becoming a financial success like Bali or Singapore, and with limited oil reserves developing a strong agricultural base is needed.

ICO composite price falls to 2010 levels

Posted on Tuesday 18th, June 2013.

Coffee prices declined further in May 2013, causing the International Coffee Organisation (ICO) composite indicator price to fall to 126.96 US cents/lb, its lowest monthly average since April 2010.

The significant reductions in Arabica prices are having a negative effect on revenue for coffee producers, the ICO says in its May Coffee Market Report.

Monthly shipments have consistently maintained a volume of eight to ten million bags since the beginning of 2012, but the revenues accruing from these exports have declined, from over US$2 billion to around US$1.5 billion.

The ICO states that this problem is compounded by the fact that the cost of production has been rising in many exporting countries.

Whether the price paid to coffee growers has dropped below the cost of production will vary from country to country, but the trend appears to be heading in that direction.

Exports by all exporting countries reached 9.6 million bags in April 2013, a 4.4 per cent increase on April 2012.

This brings total exports for the first seven months of coffee year 2012-13 (October to April) to 66 million bags, a 7.1 per cent increase on the 61.6 million bags exported in the same period last year.

Total production in crop year 2012-13 is currently estimated at 143.3 million bags, an increase of 6.9 per cent on the previous year.

Costa Rica will lose at least 18% of its coffee harvest to coffee rust

Coffee Rust

How coffee rust gets its name – this is a coffee leaf infected with the fungus.

June 12th, 2013 (InsideCostaRica.com) Deputy Minster of Agriculture, Xinia Chaves said in a press conference yesterday that the latest forecasts indicate that Costa Rica will lose at least 18% of its coffee harvest to the fungus known as “coffee rust” in 2013-14, exceeding the forecast of 10.5% earlier this year.

Experts calculate that Costa Rica will harvest 1,841,532 bushels of coffee in 2013-14, versus 2,246,521 bushels in 2012-13.

A bill that would create a $40 million trust to help small coffee farmers is currently in the hands of lawmakers.  The funds would be provided to farmers who produce 50 bushels or less per harvest, which represent 81% of the 52,000 coffee producers in the country.  Together, these farmers produce around 25% of Costa Rica’s coffee crop.

Coffee farmers both in Costa Rica and throughout Central America are dealing with the coffee rust outbreak, in addition to weak international coffee prices.

Lower discounts, but meanwhile…

COFFEE

General Comments: Futures were lower again on what appeared to be speculative selling tied to big production ideas from Brazil as the harvest has started. Brazil weather remains mostly dry, but some areas could see showers later this week, which would be beneficial to trees. Dry weather helps harvest progress. Trends have turned down after the recent run to higher values due to the conditions and expected large production in Brazil. Current crop development is still good this year in Brazil, but it has been dry. Central America crops are mostly harvested and is too dry for good new crop flowering. Colombia is reported to have good conditions.

Overnight News: Certified stocks are slightly lower today and are about 2.751 million bags. The ICO composite price is now 125.52 ct/lb. Brazil should get mostly dry conditions, but showers are likely about Friday. Temperatures will average near to above normal. Colombia should get scattered showers, and Central America and Mexico should get mostly dry conditions away from some showers in Eastern Mexico and northern Central America. Temperatures should average near to above normal.

Chart Trends: Trends in New York are down with objectives of 126.00 and 116.00 July. Support is at 132.00, 128.00, and 125.00 July, and resistance is at 138.00, 141.00, and 143.00 July. Trends in London are mixed to down with objectives of 1990, 1940, and 1930 July. Support is at 1990, 1980, and 1970 July, and resistance is at 2030, 2040, and 2060 July. Trends in Sao Paulo are down with objectives of 161.00 September. Support is at 159.00, 156.00, and 153.00 September, and resistance is at 166.00, 170.00, and 171.00 September.

Brazil Exporters Seek Lower Coffee Discount on ICE Futures

Brazil coffee exporters want better treatment for their beans from one of the world’s biggest commodities exchanges.

The Council of Brazilian Coffee Exporters, known as CeCafe, said Tuesday it plans to petition IntercontinentalExchange to reduce the discount applied to Brazilian coffee beans at the ICE Futures U.S. exchange, where benchmark futures for arabica coffee trade.

“We intend in the next 60 days or 90 days to present a report on the prices of washed Brazilian coffees, in order to suggest ICE reduce the (discount),” Guilherme Braga, CeCafe’s director-general, said in an interview.

In late 2010, Brazilian growers secured the right to have their arabica beans traded on the exchange, a battle they had fought for more than a decade. But there was a catch: Brazilian beans would be delivered against the futures contract at a 9-cent discount. That means that the owner of that physical coffee would receive 9 cents less per pound than the contracted price reflected on the exchange. With one contract representing 37,500 pounds of coffee beans, that difference adds up to $3,375.

Brazilian growers’ battle for inclusion pitted them against critics, including growers groups from other Latin American nations, which argued that coffee from Brazil was of lower quality than the hand-picked, highland-grown beans from other parts of the region. Industry officials say the exchange set the 9-cent discount, the largest discount in the ICE system, in response to the concerns over quality.

Braga said he considers it to be “very high.”

Arabica coffee futures on Tuesday fell 1.8% to $1.3270 a pound, a three-year low. Coffee prices have declined 35% since December 2010 when ICE opened the door to Brazilian beans, which just became effective this year, when buyers and sellers started to make physical delivery of coffee under the March 2013 contract.

Brazilian coffee growers can get better prices selling to roasters directly, he said.

When asked about the rule, ICE said, “We review the discounts regularly and will consider all input from market participants as part of that review process.”

The selloff in coffee prices in the past two years has created little incentive for traders and growers of Brazilian beans to add to the stockpiles certified by the exchange. Coffee delivered against the contract must come from these stockpiles.

While Brazilian growers now can sell their beans on ICE, they haven’t actually taken advantage of the new rules. No Brazilian beans were brought to the exchange to fulfill the March contract nor the next, which was for May delivery, according to ICE.

That is because current coffee prices are too low, and the discount is too big, Brazilian growers and CeCafe said.

“The solution is that this (discount) is reduced,” Braga said. He said CeCafe will determine how much of a reduction it will request based on market conditions during the harvest.

Silver coffee pot could set $6 million record at auction

LONDON (Reuters) – An 18th century silver Rococo coffee pot is expected to become the most valuable piece of English silver ever sold at auction when it goes up for sale in July, auction house Christie’s said.

The ornate George II pot made in 1738 by one of the greatest silversmiths of his day, Paul de Lamerie, is expected to fetch up to 4.5 million pounds ($6.8 million) when it goes to auction on July 4 in London, Christie’s said on Wednesday.

That sale would trump the silver wine cistern of 18th century diplomat Thomas Wentworth, which sold for 2.5 million pounds in 2010 but went instead to a British museum which won time to raise funds when the government deferred export approval.

“He (Lamerie) is the greatest name in English silver,” said James Lomax, retired curator at Temple Newsam House in northern England which eventually bought the Wentworth piece.

The fluted three-legged pot is decorated with silver reliefs, including “putti” – cherub-like figures – holding coffee bush branches, a lion’s mask, shells and foliage. It has a carved wooden handle.

The pot has a history which celebrates the rise of coffee’s popularity in England and the Protestant Huguenot exile community who fled to Britain from persecution in France.

Lamerie was apprenticed to fellow Huguenot Pierre Platel in 1703, becoming free of his master in 1711. Within six years he was described as the “King’s Silversmith”.

The pot was commissioned by 18th century London-based trader and fellow Huguenot Sir John Lequesne, who came to Britain as a child refugee and became a successful businessman.

The first London coffee house was opened in 1652. They were the precursors of the city’s gentleman’s clubs and financial institutions, such as the insurance market Lloyds of London.

($1 = 0.6604 British pounds)

Coffee Fungus Spurs Central America Migration Plans: Jobs

By Anna Edgerton, Adam Williams & Marvin G. Perez – Apr 22, 2013 9:00 PM PT

Coffee picker Hector Gonzalez says he feels personal pain as he watches leaves stripped off plants from a fungus infecting 70 percent of the crop on the Salvadoran farm where he works.

“The hurt of losing this work is like losing your life,” Gonzalez, 32, said in a phone interview. “The hills look like a desert, like a fire came through.” His farm’s harvest, which once employed thousands of workers, now requires about 100, he said.

The International Coffee Organization estimates 437,000 workers in Central America will be jobless after an outbreak of coffee rust this year and more will be affected next season. Photographer: Victor J. Blue/Bloomberg

The International Coffee Organization estimates 437,000 workers in Central America will be jobless after an outbreak of coffee rust this year and more will be affected next season. From Guatemala to Panama, governments are boosting aid to fight the disease and keep workers from migrating to cities or north toward the U.S. The fungus wiped out as much as 25 percent of the region’s coffee crop this season, according to World Coffee Research, an industry association.

About 2 million of the 43 million inhabitants of Central America are directly employed by the coffee industry, according to the ICO. In his community of 90 households, Gonzalez said nine unemployed coffee pickers have left for the U.S. since January, and 15 have gone to the capital, San Salvador, to find temporary work or join the army.

To discourage workers in neighboring Guatemala from deserting the countryside, the government on March 11 announced a temporary employment plan that provides work on highway maintenance and reforestation projects. Those joining the program earn 40 quetzales ($5.13) a day compared with the minimum agricultural wage of 71 quetzales.

Falling Exports

Coffee provides 504,000 direct jobs in Guatemala, according to the ICO. Exports from the current harvest will drop to $350 million from $960 million from the 2011-2012 crop, said Nils Leporowski, president of the country’s National Coffee Association.

In Honduras, the region’s biggest coffee producer, the government and national coffee institute are employing some 100,000 workers made jobless by rust to rehabilitate farms by replacing damaged plants. The government has pledged $85 million to fight the disease, which it says could shave 1.7 percent off the country’s $17 billion annual gross domestic product.

“Our hope is that all the workers who lost their jobs will be able to continue working in coffee,” said Victor Hugo Molina, general manager of the Honduran Coffee Institute, in a March 21 telephone interview. “By reconstructing damaged farms, they remain in the coffee industry.”

Food Security

The outbreak can be contained through the use of fungicides. Industry organizations are also urging local governments to provide more food and aid to rural communities affected by the disease.

“This is not just about whether you can make a profit this year, we’re talking about food security in rural areas,” Mauricio Galindo, head of operations at the London-based ICO, said in a March 18 phone interview.

The financial impact of rust losses is exacerbated by a drop in international prices as greater supplies flow to the global market. The price of arabica beans, the most common variety in Central America, has decreased by 18 percent since July. Even with the outbreak, global supplies of the beans have increased, led by Brazil, which boosted exports 11 percent in March from a year earlier.

Potential Shortage

Ric Rhinehart, the executive director of the Specialty Coffee Association of America, said some buyers are concerned that emigration will leave Central America without enough pickers once output starts to recover. Major members of the association, including Green Mountain Coffee Roasters Inc. (GMCR), favor the use of arabica coffees and typically buy a sizable portion of their beans from Central America, he said.

Representatives from Seattle-based Starbucks Corp. (SBUX) and Waterbury, Vermont-based Green Mountain participated in a summit on coffee rust held last week in Guatemala City.

“Our greatest fear is that farmers will be displaced and that their livelihoods will remain uncertain,” Rhinehart said in a March 25 interview from Long Beach, California. “The futures market in New York will continue to absorb the news without reflecting the terrible situation, but cash prices will soar for the coffees produced in the region. The keen impact will be felt next year.”

In a region struggling with violent crime, the additional insecurity of unemployment and increased poverty can undermine stability. El Salvador and Honduras lead the world in murders with rates more than 12 times higher than the U.S., the United Nations said in its 2011 Global Study on Homicide.

Migrants Shelter

At the Hermanos en el Camino shelter for Central American migrants in Ixtepec, Mexico, 270 miles (430 kilometers) from the Guatemalan border, Jose Alberto Donis Rodriguez compared the coffee rust epidemic to the destruction of corn crops by Hurricane Mitch in 1998 and Hurricane Stan in 2005. Recently unemployed workers who have family or other connections with workers who migrated to the U.S. after those disasters may get help finding jobs there, Donis said in an April 1 telephone interview.

“Most people go with the intention of returning,” Donis said. “They want to stay two or three years to earn money. But the conditions in their country of origin are the same so they end up staying.”

Gonzalez, who says he understands why people leave for the cities or the U.S., described his sadness at the rust outbreak and its impact.

“When you’re on the farm, you take care of it as if it were your own garden,” he said in an April 12 interview from his plantation near the Guatemalan border. “I take pride in my work. We take care of the coffee, because that’s what we live by.”

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Price forecasts for arabica coffee futures in New York, lowered

April 23 (Bloomberg) — Goldman Sachs Group Inc. lowered its price forecasts for arabica coffee futures in New York, citing an improving production outlook in leading grower Brazil.
Prices will be at $1.45 a pound in three, six and 12 months, the bank said in a report e-mailed today. That is down from previous forecasts of $1.55 a pound, $1.65 a pound and $1.75 a pound, respectively, it said. Arabica futures for delivery in July fell 0.6 percent to $1.4225 a pound by 9:14 a.m. on the ICE Futures U.S. exchange in New York.
Brazil will harvest 47 million to 50.2 million bags of coffee this year, Conab, the government’s crop-forecasting agency, estimates. That is down from 50.8 million bags a year earlier and may be a record for a year in which trees enter the lower-yielding half of a two-year cycle.
“Although 2013-14 is the low-yielding production year in Brazil’s biennial cycle, favorable rains in March point to an even larger off-year crop, already forecast to reach record volumes,” Damien Courvalin, an analyst at Goldman Sachs in New York, wrote in the report. “The arabica market will likely only be in a modest deficit or even remain balanced in 2013-14.”
The improved outlook for the crop in Brazil means supplies there will compensate for production losses caused by coffee leaf rust disease in Central America, he said. The epidemic is the worst case since the disease appeared in the region in 1976, according to the International Coffee Organization in London.
Leftover Sales
While further cuts to production estimates in Central America may “provide modest support to prices,” sales of leftover stockpiles from the last crop in Brazil may “weigh on prices in coming months,” according to Goldman Sachs.
Brazilian growers sold 75 percent of the 2012-13 crop by March 31, down from 86 percent a year earlier, Gil Barabach, a market analyst at Safras & Mercado, estimates.
The global sugar market is heading for a third year of surpluses in the 2013-14 season that starts in October in most countries, the bank said. Excess supplies will result from a large sugar cane crop in Brazil’s center south, the main growing region of the world’s top producer, and as growers continue to replant.
“The increase in Brazil sugarcane crush will allow for both an increase in sugar and ethanol production,” Courvalin said.
Sugar Prices
Sugar prices will be at 18.50 cents a pound in three and six months and at 19 cents a pound in 12 months, the bank forecasts. Delays to the start of the harvest in Brazil’s center south because of rains were compensated by bigger-than-forecast harvests in Thailand and India, the second-biggest grower.
“A quick ramp up to the 2013-14 Brazil harvest creates downside risks to our forecast in the first half of 2013,” Courvalin said. “In turn, potential support to prices could come either from a potential further hike in Brazil’s gasoline prices or cut to ethanol taxes which would increase ethanol’s relative profitability over sugar or potential weather, production disappointments in India, Russia and Ukraine later this year.”
Raw sugar for July delivery fell 0.3 percent to 17.68 cents a pound in New York