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Coffee Outlook February 2003

Coffee Outlook February 2003. Coffee Historical Background. Coffee was 1 st Discovered in Ethiopia in the 6 th Century Coffee Drinking Begins to Spread in Europe in 1600 In 1727 Coffee Plant Was Smuggled into Brazil In Dec. 7 1881 Coffee Exchange Begun in NY

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Coffee Outlook February 2003

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  1. Coffee OutlookFebruary 2003

  2. Coffee Historical Background • Coffee was 1st Discovered in Ethiopia in the 6th Century • Coffee Drinking Begins to Spread in Europe in 1600 • In 1727 Coffee Plant Was Smuggled into Brazil • In Dec. 7 1881 Coffee Exchange Begun in NY • 1906: First Withhold Scheme of Great Proportion

  3. Brazilian Production • 1929: Sao Paulo Coffee – Institute Runs Out of Money and Prices Fall to 8 cents • 1930: Brazil Begins to Burn Excess Stocks • 1944: Burning Stops After 78 Million Bags Have Been Destroyed

  4. International Agreements • 1958: Latin American Coffee Agreement • 1966: World Stocks Reach 87 Million and Brazil Has 65 • 1989: International Coffee Organization • 1993: ACPC Withholds Coffee • 1994: Drought in Minas – Production Falls • 1999:Brazilian Currency Devaluation

  5. Brazil’s Coffee Production

  6. Vietnam’s Coffee Production

  7. Brazil Effect Pressuring Prices to the Detriment of World Producers • Central America in Social Crisis • Africa – 60/70% of Income from Rural Workers • Increased Violence Reduction of Production in Other countries Increases Dependence Upon Brazil • Result in Increase of Volume

  8. Coffee Market World Coffee Production had a Increase of 125.1 Million Bags in 2002/2003 • Increase of 12% Over the Previous Year • Increase Due to Brazilian Production

  9. World Stocks

  10. Decline Export Revenue • Export for Calendar 2002 Fell from 90.30 to 88.62 First Drop in Four Years: Brazil + 20.46%, Vietnam – 15.41%, Colombia +3.32 %, Mexico/ Central America – 10.79%, Asia/ Oceania –11.19% • Value for: 2002: $5.25 2001: $5.43 2000: $8.17 1997: $12.88

  11. Overview Brazil’s Influence is Increasing in the Coffee Market for Better or Worse • Winter Season in Brazil Will Be More Volatile • Once Brazil Builds Stocks Historically, It Will Be Hard to Let Go • Heightened Volatility During Brazil Weather Season

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