SUNS  4330 Tuesday 24 November 1998



LATIN AMERICA: COFFEE GROWERS SET SIGHTS ON DOMESTIC MARKET

San Jose, Nov 20 (IPS/Maricel Sequeira) -- For the first time in years, global coffee production will outstrip demand this season - a phenomenon that has driven Latin American producer countries to set their sights on the internal market, by offering export quality blends with higher added value.

In their effort to boost domestic consumption, the coffee industry is also reaching out to the young, who research indicates are not big fans of traditionally flavoured coffee.

For the first time in eight years, global coffee production will exceed demand, projected at around 100 million 60-kg sacks for the 1998-99 season, said John Naranjo, head of Colombia's National Federation of Coffee Growers. Colombia is the world's second largest coffee producer, following Brazil.

The state of global supply and demand, latest research on the benefits of coffee, and trends in international prices were some of the key issues discussed at the International Coffee Week (Sintercafe), organised here this week by the Costa Rican Coffee Institute.

Close to 400 representatives of coffee companies and government officials participated in the gathering, the 12th held in Costa Rica.

Brazil - whose 1998-99 yield is projected to total 34 million sacks - hopes to boost internal consumption to 15 million sacks by the year 2000, said the director of the Costa Rican Coffee Institute, Guillermo Canet.

In Costa Rica, which boasts the world's highest productivity per hectare, young people have stopped drinking coffee. To counteract that phenomenon, a marketing campaign in which coffee will take a variety of forms and flavours is to be launched next year.

Haydee Cuadrado, in charge of Marketing and Promotion at the Coffee Institute, said young people did not like coffee due to the development of enzymes on their taste buds which kept them from enjoying the taste of coffee, roughly between the ages of 13 and 17.

But tests carried out here show that youngsters do enjoy coffee with flavours such as cinnamon, vanilla and chocolate, ice coffee, which is processed differently, and coffee with ice cream.

Colombia also plans to reach out to the young, by offering free coffee in high schools and universities, for instance, said Naranjo.

Colombia projects a 12-million sack yield this season, 11 of which will go to the export market. The remaining one million sacks will go to a sluggish domestic market.

As part of the strategy to boost internal as well as external consumption, a group called 'Viva Cafe Forever', currently comprised of 60 members, was set up at last year's Sintercafe.

Young people interviewed as part of a survey commissioned by the group, carried out by the University of Georgetown in Washington, said they did not drink coffee because they saw it as a health risk due to the harmful effects of caffeine. They also mentioned the difficulties in preparing coffee and its bitter taste.

Naranjo said changes in internal consumption would not alter the outlook for Latin American producer countries, which depended on adequate handling of the region's projected four million-sack surplus.

He said the member countries of the Association of Coffee Producers (APPC), which produce some 55 million sacks, have "a great responsibility to ensure good prices and stamp order" on global
production.

In Naranjo's view, the best way to help the nations of Central America, whose coffee plantations were devastated by Hurricane Mitch along with many other aspects of their economies, was by putting the market in order so as to keep prices stable.

Central America's coffee sector was not only hit hard by the harvest losses, which have not yet been estimated at a regional level, but also by the slump in international prices, attributed to the super-harvest forecast in Brazil and the high yield also expected in Colombia.

Although Central America as a whole meets 12 percent of global demand, it has little influence on the global scene, as demonstrated by the fall in prices.

Hondura's Osmand Maduro and Nicaragua's Robert Bendana told Sintercafe that no plantation in their countries had escaped the passage of the recent hurricane entirely unscathed, and that even the coffee from a large part of the bushes left standing would not reach the markets due to the major damages suffered by roads.