Cheap coffee some time off

Press, 1 November 1977, Page 7

Cheap coffee some time off

Although world coffee prices are falling it will be several months before retail coffee gets much cheaper, research by a university group indicates.

A study by the University of Otago's department of university extension predicts that the price of coffee “will never again be at the low level we enjoved in the 19605.”

The department provides extension studies for students, and has also published reports on various topics, notablv involving home science.

“Bumper” harvests in the 1960 s created a world surplus which kept prices down, the report says. Today, however. there was a world shortage of raw coffee. Coffee grows in the high areas of tropical countries such as East and West Africa, Papua New Guinea, and central and South America.

Earthquakes, floods, and other natural disasters affected production in many of these countries. Political upheaval in others had meant that the deficit could not be

made up, and world exports dropped by about 20 per cent last year. About half the coffee trees in Brazil were destroyed in 1975 by severe frosts. Although these had been replaced by new high-yielding varieties, and another 100 M trees planted, it would be some time before the results became evident, the report continued.

“It takes three years for a coffee tree to begin to bear, and two years more before it reaches full maturity. So it will be some five years before consumers benefit from greater production.”

Several coffee-exporting countries, including Brazil, had raised their export tax on coffee, while increased processing and marketing costs had compounded the problem. Some farmers might have switched to quicker-growing crops, and full production might not be restored everywhere. There were fears that, the International Coffee Organisation—set up in 1976 to help stabilise world coffee prices — might not consider the

interests of the domestic i consumer.

Shortages were expected to keep prices up for some months, until stocks bought at the higher rates were used up. The report goes on to say that boycotts must be extensive to have the desired effect.

“While they may register our feelings on the matter, it is unlikely that what happens in our small market would convince overseas producers and governments of any need to change their ways. They could retaliate by refusing to supply the New Zealand market. “World-wide consumer resistance would be the only telling action.” Tines of about SSM were ordered on Thursday against 10 Colombian coffee exporters accused of withholding 180.000 sacks from the world market in hope for beter prices, the Associated Press reports through the New Zealand Press Association.

In announcing the measure, the Government said the ex-

porters signed an BS2M contract with American buyers last March when co’ffee prices reached record highs, • They held their exports hoping for still better prices, but quotations collapsed, and a deadline for the deal was enforced, the Government said.

Colombia is now expecting an abundant harvest, and prices have dropped 50 per cent since March, The president of the Brazilian. Coffee Institute, Mr Camilo Calazans, meanwhile, denied widespread reports that Brazil has been exporting coffee at prices lower than the Governmentfixed minimum export price of $3.20 per pound. British supermarket chains have won a battle to keep coffee prices down. Big chains announced a fortnight ago that they would boycott leading brands of coffee until the manufacturers agreed to keep prices down. Now the two main manufacturers have said their next increases will be 20p (36c) on a 120 g jar, instead of the planned 50p (90c).