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ICO’s new head wants to draw 100 countries

Vanusia Nogueira — Foto: Divulgação
Vanusia Nogueira — Foto: Divulgação

Coffee is part of the economy of every country in the world. Whether uniting production and consumption – or if there is only consumption –it is present in 196 nations and has growth potential in virtually all of them. Despite this, the International Coffee Organization (ICO), founded almost 60 years ago, brings together less than half of them, even though its members account for 97% of global supply and 67% of global demand.

With the mission to expand the sector’s engagement around the world, Vanusia Nogueira, a Brazilian born in Minas Gerais, takes over as executive director of the London-based organization in May, replacing José Sette.

The challenge will involve not only a rapprochement with non-member countries, but broad work on income gains, transparency, market relations and sustainability.

The ICO brings together 75 countries — including all European Union countries, and not just the bloc. Production totals 168 million bags of the Arabica and Robusta varieties, and consumption reaches 167 million bags each harvest.

Assuming that advances will take place “step by step” and without “megalomania”, Ms. Nogueira already indicates the horizon she seeks in five years, when her term ends. “I will be fulfilled if we have all the countries in the world within the ICO,” she said. Thus, the entity will fulfill the task of being a forum for discussion and resolution of issues in its view.

At the age of 60, Ms. Nogueira put aside the idea of retiring and responded to an industry call. Her name was suggested last year – although she says she never wanted the job – and her candidacy was supported by the Brazilian private sector, with the approval of the federal government, and by chain players in other countries — including Colombia. The Colombians, well-known competitors of Brazil, occupy the second place in the supply of Arabica coffee to the world. The election took place in February.

The executive from Três Pontas will face the challenge of defending the pleas of a number of dissatisfied with the entity’s performance around the world, according to sources in the sector. The first woman to lead the ICO, Ms. Nogueira will arrive in the United Kingdom knowing that she will need to shake up an environment that breathes political timing, due to its intergovernmental origin, and that had been the target of harsh criticism in the pre-pandemic years. During this period, the U.S., the world’s largest coffee consumer, left the organization.

“At the last face-to-face meeting, in 2019, we discussed whether it was worth continuing. ICO was heavy, slow, and did not give answers to anyone,” she said. “We concluded that the private sector and civil society should be invited to take part in the debate.”

From there, a public-private task force was created in 2020, led and facilitated by the organization itself, which created five working groups: one coordinator and four others focused on prosperity (income), transparency, the environment and commercial relations. Although they have been moving at a faster pace since last year, Ms. Nogueira arrives to give traction to the actions.

The aspect related to prosperity aims to find out what income is necessary for a coffee grower to “survive with dignity.” The idea is to carry out surveys by regions to discover the gaps between the producer’s current income and the amount he needs to live from the activity.

It is in the scope of the actions to find out what are the causes of the gaps so that problems can be tackled, ranging from lack of education and technical assistance, planted varieties and productivity, to the analysis of structural issues in each region and that reflect in the activity.

Ms. Nogueira also highlights that it is necessary to have serenity to deal with the fact that there will be cases in which the producer will need to think about diversification of economic activity. Depending on environmental and social conditions, she explains, it will not always be possible to live on coffee alone.

In the income-focused group, there are pilot projects underway in Africa and Central America. Local associations such as the African Iaco and Promecafé are taking part, and there is support from development banks from Germany and Switzerland. In addition, talks are underway with FAO and the United States Agency for International Development Support (USAID), as well as other interested parties. The plan is to complete the mapping in all producing countries by 2030.

Another line of action in the task force is the one that will focus on market transparency. A delicate chapter, it involves studying productive cost methodologies. This point, added to financial speculation, are aspects of coffee volatility, she reiterates. The production cost is “hazy” since “there is no common methodology in the world.”

The working group brings together 15 experts in the coffee chain. Brazil has Maciel Silva, a member of the Brazilian Agriculture and Livestock Confederation (CNA), as its representative. The objective is to propose a methodology applicable to different realities.

Other two lines are projects involving environmental recovery and commercial relations. “We thought about how to show the world that agribusiness is not a villain in environmental issues and the idea is to expose what is in progress, like the SOS Mata Atlântica project with Nespresso in Brazil,” she said.

With regard to the work of reintegrating the U.S. — an important consumer country that left the ICO in 2018, under former President Donald Trump — the strategy is to get closer to the Biden administration, involving producing countries that already have a system of lobbying the Americans. The ICO also has the support of the U.S. green, roasted and specialty coffee associations.

Source: Valor International

https://valorinternational.globo.com

Coffee exporters aim at Minas-Rio railroad to reduce costs

World coffee export slightly down in January - Comunicaffe International

A project to move products from southern Minas Gerais, especially coffee, through Angra dos Reis port, in Rio de Janeiro, may draw investments of R$20 billion. The plan is to link both ends by rail.

The new corridor, a plan by Porto Seco Sul de Minas and Terminal Portuário Angra dos Reis (Tpar) to drive exports, depends on reactivating two railway sections: Varginha-Três Corações-Lavras (the so-called Sul de Minas shortline) and Barra Mansa-Rio Claro-Angra (Sul Fluminense shortline). Both are part of Centro-Atlântica railroad, run by concessionaire VLI, but are idle since 2010 and 2009, respectively.

Exports from Porto Seco Sul de Minas, most of which shipped in the Port of Santos, yield about $1 billion per year and reach the coast by truck despite higher costs and several accidents, especially on Fernão Dias highway.

At least 100,000 containers a year are moved this way, a survey by Grupo de Estudos Econômicos do Sul de Minas shows, including coffee exports, fertilizer imports and regional transport of coffee for blending. With the new corridor, the volume could increase twofold.

“There are 80,000 containers of coffee alone, but with cost reduction that would increase substantially. Exporters pay R$3,400 to send each container to Santos, or R$3,800 to Rio. With a connection between Varginha and Angra, the cost drops to R$1,800, excluding the reverse logistics [fertilizer transportation from the port to coffee farms],” said Cleber Marques de Paiva, CEO of Porto Seco de Varginha and a coffee exporter.

Investments in the Varginha-Angra project may require up to R$23 billion, including infrastructure works in short road stretches, terminals and storage, Mr. Paiva said. Private-sector projects in Porto Seco Sul de Minas and surroundings account for most of that. The executive believes that R$200 million in risk capital will be required to start the construction works.

Provided that the project gets off the drawing board, the railroad would still be five kilometers far from the docks in Angra. The plan is to connect the final leg using electric trucks to reduce the environmental impact of the operation. “The project is not hostile to the environment,” Mr. Paiva said, citing the advantages of railroads over road transport in this aspect.

The Angra dos Reis port would also require R$150 million to be able to handle more cargo, including the final leg road and improvements in the surrounding terrain. “This is a transformational project for the terminal,” said Leandro Cariello, a partner at Splenda Port Group, the holding company that runs Tpar’s concession.

Yet all of this depends on the reactivation of the railroads.

Both the 130-kilometer Sul de Minas and 106-kilometer Sul Fluminense shortlines require renovation and modernization, but VLI renovated and returned the concession instead. Despite the stakeholders’ efforts, the future of these shortlines remains uncertain.

VLI told Valor that “demand studies already carried out in the region indicate that the mentioned stretch has insufficient demand to economically justify its recovery and operation.” According to the company, “these studies are being updated, as established by the National Land Transport Agency (ANTT), as a natural part of the process of early renewal of the Centro-Atlântica railroad concession. The conclusion of these surveys is necessary for a new analysis of the potential for cargoes on the stretch.” In its note, VLI added that “decision-making regarding projects and investments after the concession contract is renewed is based on the methodology and technical parameters of the regulatory agency and the decision of the Ministry of Infrastructure.”

Source: Valor international

https://valorinternational.globo.com/

Robusta coffee price reaches all-time high

Preço Barato Para As Importações Logotipo Sobre A Demanda Do Grãos De Café  Robusta Puro Preço - Buy Robusta Coffee,Robusta Coffee Bean,Robusta Coffee  Price Product on Alibaba.com

Robusta coffee reached this week its highest nominal price ever in Brazil as each 60-kilo bag was traded on Wednesday for R$734.09, according the Center for Advanced Economic Studies (Cepea), whose records began in 2001. The variety price is up 6.23% in September.

Researchers at Cepea said in a statement that the record level follows the increase in prices of robusta on the London exchange, a reference for the formation of prices of the variety on the international market. Moreover, the growth in demand for the grain in Brazil and the relative contraction of sellers also prop up the appreciation, researchers say.

In recent weeks, concerns have grown about the supply of robusta from Vietnam, the world’s largest producer of the variety. With the resurgence of the Covid-19 pandemic, the country has again adopted more restrictive measures for the mobility of people, which in turn bred market fears – and pushed prices up.

Vietnam accounts for about 40% of the global supply of robusta and Brazil, the second largest producer, for 20%. The variety represents almost 32% of the Brazilian coffee harvest, according to the Brazilian Institute of Geography and Statistics (IBGE).

Brazil is expected to harvest 919,700 tonnes this year of conilon (also known as canephora, the most widespread variety of robusta in the country), or 15.3 million 60-kilo bags, according to the August Systematic Survey of Agricultural Production (LSPA), released by the IBGE on Thursday. The volume is 6.3% higher than in 2020.

In the state of Espírito Santo, the largest producer of conilon, the crop should grow 10% over last year, to 618,300 tonnes (10.3 million 60-kilo bags). Bahia state, which has expanded the production of the variety, projects a 126,200 tonnes crop, up 0.5% year over year.

Considering both varieties (arabica and conilon), Brazilian production should reach 2.9 million tonnes (48.9 million 60-kilo bags), according to the new IBGE estimate, which, if confirmed, will represent a 21.2% decline compared to last year. The projection is 0.3% below the previous one.

For Arabica coffee, IBGE estimates a production of 2 million tonnes, or 33.6 million 60-kilo bags. The volume represents a drop of 0.4% compared to the previous forecast and of 29.6% in relation to the 2020 harvest. The institute points out that last year the Brazilian Arabica crop had a positive year in coffee’s biennial cycle – that is, a crop with higher productivity. The country’s harvest last season was record-breaking.

Source: Valor international

https://valorinternational.globo.com/

Coffee production to fall by 22.6%, survey says

The National Supply Company (Conab) indicated that the coffee harvest should total 48.81 million bags. The volume is 22.6% smaller than the record of the last cycle, 63.08 million bags. In the first survey made in January, the state-owned company estimated that production would be between 43.8 million and 49.5 million bags. The reasons for the drop are the negative biennial of Arabica coffee (when plants normally produce smaller fruits) and adverse weather conditions. Coffee is being harvested after the crops have faced more than two months of dry weather.

Source: Valor international

https://www.valor.com.br/international/briefs

Coffee consumption at home creates opportunities for companies

The demand for coffee is likely to take time to recover from the impact of the pandemic, even as cafes and restaurants are open again in large cities such as São Paulo. “The expectation for the coming months is to maintain the levels of consumption at home, but outside the home the recovery will be slow,” says the head of the Brazilian Association of Coffee Industry (Abic), Ricardo Silveira. According to him, in recent months the increase in home consumption has not fully compensated for the drop in sales in cafes and restaurants. But companies are betting on higher-end products for consumption at home. Nestlé, for example, is investing R$151 million in the Nescafé, Dolce Gusto and Starbucks brands in 2020, focusing mainly on premium products. Suplicy, for its part, seeks ways to survive the crisis after a 90% drop in sales in the first quarter due to social distancing measures. The company’s roasting facility saw production fall to 12 tonnes of beans per month. “Our expectation was to grow 40% this year, but I think we will shrink 30%,” CEO Felipe Braga says.

Source: Valor International

https://www.valor.com.br/international/briefs