Peru coffee exports may hit record

09:17, January 29, 2010      

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Peru's coffee exports may rise to a record this year as buyers including Kraft Foods Inc and Starbucks Corp boost purchases of the bean because of improving quality, the head of the Peruvian Coffee Chamber said.

Sales of coffee, Peru's biggest agriculture export earner, may climb by 12 percent to $650 million in 2010, compared with $580 million a year earlier, Eduardo Montauban, head of the association, said yesterday in an interview in Lima.

Peru's coffee output has doubled since 1999 as the country's exporters increased yields and enlarged plantations by half to 370,000 hectares, according to the Agriculture Ministry. This year's harvest is slated to rise to 5 million bags from 4.8 million bags in 2009, Montauban said. The country is the world's largest producer of organic coffee.

"Companies are buying more of our organically grown Arabica beans because they're cheaper than Colombian coffee, have a smooth flavor and have improved in quality in recent years," Montauban said. "The long stretch of strong prices is also prompting farmers to plant more."

May Kulthol, a spokeswoman with Starbucks, said in an e- mailed response to Bloomberg News questions that the company doesn't disclose coffee purchases by country and that 78 percent of its purchases came from Latin America in 2008. Kraft, based in Northfield, Illinois, didn't immediately respond to an e-mail seeking comment.

Coffee prices may rise this year as harvests drop in Brazil, Vietnam and Mexico, said Scotiabank Peru analyst Pablo Nano. A bag of coffee weighs 60 kg.

Growers worldwide will probably produce 125 million bags this year, 2.3 percent less than last year, the International Coffee Organization said on Dec 9.

Arabica-coffee futures for March delivery fell 4.5 cents, or 3.3 percent, to $1.3375 a pound at 1:18 pm on Wednesday on ICE Futures US in New York. The commodity has climbed 10 percent in the past year after bad weather damaged crops in Colombia and Brazil, the world's biggest producer.

Robusta coffee for March delivery slumped $14, or 1 percent, to $1,333 a ton yesterday on the Liffe Exchange. Robusta, which is planted in Brazil and Africa, will average $1,650 a ton this year, Commerzbank AG said in a report.

Source: China Daily
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