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March 2012 C&CI • ICO Report • 19

"Under my leadership, and with your support," he told his audience in India, "I would like to develop this co-operation in the field of coffee development projects by not only assisting member countries in designing more project proposals but also in mobilizing more resources from bilateral donors and many other regional and inter- national development institutions."

Key role of development projects

Extra cash is needed, he says, to boost the help that the ICO can give to farmers in fighting pests and diseases, improving qual- ity and securing better access to credit, markets and risk-management tools – all areas where the agency is already playing a role, but one in which it aims to do more under the provisions of the new International Coffee Agreement (ICA). Success in these areas, along with strengthening coffee insti- tutions all over the world by increasing capacity building, is seen by Mr Oliveira Silva, as the key to improving living stan- dards of coffee growers.

In between his visits to India and Nairobi, Mr Oliveira Silva in December attended the 17th Asia International Coffee Conference in Vietnam in Ho Chi Minh City, where he made a presentation on the out- look for global coffee production and con- sumption and met the Chairman of the Vietnam Coffee and Cocoa Association (VICOFA), Luong Van Tu.

Planning for anniversary

On his visit to Brazil in early November, meanwhile, Mr Oliveira Silva had taken part in a conference organized by the national coffee industry body, ENCAFE, in Buzios. Its theme was New Challenges: Recovering

ICO describes market situation The ICO’s latest assessment of the market is that, despite some retreat in prices from recent highs, the supply/demand balance remains "fragile."

Stocks in exporting countries are low as a result of the record level of exports (104.5 million bags) in the 2010/11 coffee year under the stimulus of attractive prices. The ICO composite indi- cator price averaged 210.39 US cents/lb in 2011, compared with 147.24 cents in 2010. Since December, signs of a big 2012/13 (April-March) Brazilian crop (initial estimates pub- lished by CONAB indicate total production up 16.3 per cent on 2011/12 at 50.6 million bags, com- prising 37.7 million bags of Arabica and 12.9 million bags of Robusta) and the good harvests expected in many other countries in the their current 2011/12 marketing years are behind the fall in the price of Arabica beans. Robusta prices, meanwhile, have held up better in recent months on supply uncertainties.

The ICO estimates that total production in the 2011/12 crop year – which for most exporting countries began in October, but for Brazil, Indonesia and a few others started last April – will reach 132.4 million bags, compared with 134.2 million bags in 2010/11. The agency reports that preliminary information suggests that world consumption, which rose to an estimated 135 million bags in 2010 from 131.8 million in 2009, "remained resilient to the economic turbulence seen in many importing countries" in 2011. The most dynamic growth, it says, is coming from domestic consumption in exporting countries.

Because of the buoyancy of world demand, the ICO takes the view that fundamentals overall "continue to favour firm prices," despite the prospect of a bumper Brazilian crop and speculation that Vietnam’s current harvest may be bigger than officially estimated. However, it says that promotion efforts aimed at increasing consumption, both in exporting countries and in non-traditional markets, will be necessary to support prices in the medium and long run.

Extra cash is needed, he says, to boost the help that the ICO can give to farmers in fighting pests and diseases, improving quality and securing better access to credit, markets and risk-management tools

profitability and ensuring the sustainability of the coffee roasting sector. While in Brazil, he also met Antonio Anastasia, the gover- nor of Minas Gerais, the country’s biggest coffee producing state, and discussed – among other matters – how to mark the

50th anniversary next year of the ICO’s foundation. "We ought to celebrate in a big way next year," said Mr Oliveira Silva, "It really is an important milestone." It is clear that the new man in charge at the ICO – someone who has had a thorough grounding in the world of cof- fee over many years – is determined not to let the grass grow under his feet. He was scheduled to reveal the first results of his analysis of what is wrong at the agency and the improvements that are needed, especially in the areas of mak- ing savings and directing spending more usefully, at the ICO’s March 5-9 meeting in London. ■ C&CI

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