Written: 15th November 2010

STARBUCKS GOES EAST

Starbucks considers that China will be the largest growth market for its business in about two years' time. Currently, Starbucks has 400 stores in China and it is planning to increase that to 1000 in the near future. China's growth potential is huge. The average Chinese consumes only 40 grams of coffee per capita, several times the 13 kg consumed per capita in Finland or the 3.3kg in Japan. Such is the interest in China that the chain is planning to open its first coffee farm in China. 

COLOMBIA PICKING UP

Excessive rainfall in Colombia since the second half of 2008 reduced the 08/09 and 09/10 crops to just above 8m bags, from a normal level of 12m bags. Rainfall in the first few months of 2010 was more normal during the development period of the flowering for the main crop. This crop, typically harvested in Oct-Feb is said to be good. October 2010 registered production came in at 0.8m bags, well above the 0.54m bags in 2009. But rainfall started to pour again in the development period of the mitaca (or fly crop) for next year. Our forecast is that Colombia will not go back to 12m bags this year but will instead produce 10m. 

A PEST

A recent study has found that the coffee borer (a beetle also known as la Broca in Latin America), is normally found in regions with average temperatures above 20°C and between the altitudes of 1220 to 1520 metres (although sometimes found in altitudes up to 1860 metres). The warmer a coffee field, the better the breeding conditions of the beetle, what raises concerns in the light of global warming. Treatments against the coffee borer are expensive and the best way to avoid the pest is to have an impeccable harvest, collecting all the beans from the ground. In the traditional coffee fields of Ethiopia, the presence of ants, a natural predator, tends to keep the CBD under control.

LET IT RAIN?

Rainfall anomalies have been a problem throughout the coffee producing regions of Latin America. Too little rain in Brazil and too much in Colombia and Central America. Whereas the dry season in Brazil ended in late September/early October, the extent and amount of the rainfalls in Colombia and CA has amazed many. In places like El Rosario, Colombia, it has rained twice the normal amount between June and August. Further South in the country, in La Trinidad, it rained almost four times the normal levels in July. Go north to Guatemala city and you may be caught in mudslides that killed dozens. Luckily, the coffee price levels made it possible for farmers to apply the expensive copper-based fertilisers to fight rust. This is especially evident in Colombia thanks to the assistance of the FNC. 

KEEPING IT UP

Jan-Jun 2010 import figures in the European Union have come in very optimistic. This may be due to the fact that the Central American crops were exported relatively early this year but also to the fact that coffee consumption seems to be holding very well despite unemployment and double-dip recession woes. In the coffee powerhouse of Germany, the traditional filtered coffee has been losing ground to espresso and other single portion servings but the total consumption is said to be slowly growing since 2005.