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USA Coffee Market
The US, the top coffee importing nation and a proponent of free trade, is on a mission to shake up a global coffee charter before it expires in '07, the head of a US coffee association said. After a 12-year split from the International Coffee Organization (ICO), Washington last spring acceded to the group's 2001 International Coffee Agreement, which promotes consumption and aims to foster a 'sustainable coffee economy.'
Now that agreement is ripe for some big changes, Robert Nelson, the president and chief executive of National Coffee Association USA, said. "The bottom line is that it really looks as though renegotiating a new agreement will provide tremendous benefit as opposed to simply extending the current one with some minor modifications," Mr Nelson said.
"The ICO needs to be focusing now on the removal of trade barriers which will enhance increasing global consumption," said Mr Nelson, who lobbies for the US coffee industry and has been active with the ICO for the past decade.
The ICO is the main governmental forum for the global coffee industry. Washington left the ICO in '93, saying it wanted to set prices artificially through quotas. The US rejoined the ICO about a year ago, under the impression the group will embrace free trade to help revive long-depressed prices received by growers.
Mr Nelson said the US position on international coffee trade will be among the key topics discussed at the NCA's annual convention in Florida on March 9-11. Coffee, one of the world's most traded commodities, is produced in more than 60 countries and provides a livelihood for about 25m farming families around the world. Many producing countries fear the removal of tariffs could pave the way for cheaper products to flood their markets and harm productivity.
Meanwhile, ICO's European members may resist some of the changes proposed by the US, in part because of cost and timing concerns, Mr Nelson said.
Still, Mr Nelson reckons free trade in coffee could spawn a US-style cafe culture in countries where the beans are grown, generating new jobs and more money for farmers. Coffee consumption in many producing countries is relatively low because of trade barriers and limitations in consumer choices of new products, he said.
In Brazil, the top coffee grower and exporter, domestic consumption of java has exploded thanks to Brazilian coffee officials keen to top the US in coffee consumption. Brazil grows both Arabica and Robusta coffee beans, which are often blended by roasters to make different varieties of coffees. The higher-quality Arabica beans account for nearly 70% of world output, so some countries take pride that their coffees are 100% Arabica.
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