Lavazza agrees to buy France’s Maxicoffee

MILAN (Reuters) – Italian coffee maker Lavazza said on Monday it had made a binding offer to acquire French coffee seller MaxiCoffee to strengthen its position in France and in e-commerce.

“Our strategy is to support the further development of MaxiCoffee, which will maintain its profile as a multi-brand e-commerce platform and remain independent,” Lavazza Chief Executive Antonio Baravalle said in a statement.

MaxiCoffee, which is jointly owned by its founder Christophe Brancato, Italian private equity group 21 Invest and other investors, operates through an online platform and some 60 retail outlets. Founded in 2007, it employs around 1,500 people.

Christophe Brancato will reinvest in the capital of MaxiCoffee with a minority stake, the statement said without providing financial details.

(Reporting by Elisa Anzolin; Editing by Keith Weir)

Nestle’s Nespresso to sell paper-based compostable coffee pods

ZURICH (Reuters) – Nestle’s Nespresso coffee business is launching paper-based compostable capsules to attract customers put off by the Swiss packaged food giant’s metal ones, which despite being recyclable often end up in landfill.

Nespresso CEO Guillaume Le Cunff told Reuters that not all customers were aware that its aluminium capsules are recyclable, and may be more comfortable with the compressed paper pulp pods.

“The objective is not to replace all the aluminium pods with paper, but to give the consumer more choice. It’s an alternative for sustainable options,” Le Cunff said in an interview.

“You can compost the paper capsules or recycle the aluminium ones. We let the customer choose,” he added.

Nespresso is one of Nestle’s biggest brands, with 2021 sales of 6.4 billion Swiss francs ($6.7 billion), and also one of its most profitable.

After surging sales during the COVID-19 pandemic, Nespresso has seen growth slowing, although Le Cunff said the launch was not a response to what he called a “readjustment.”

Le Cunff did not give any sales targets for the new capsules, which took three years to develop and will be trialed in Switzerland and France, but hoped they would attract new consumers and keep existing ones.

Nor was the launch “greenwashing”, Le Cunff said as Nespresso had long been committed to recycling. Instead the new capsules were part of the brand’s evolution and innovation.

“People who have never considered Nespresso before will buy this capsule, and we may re onboard people who have left.”

The brand had also been resilient during previous economic crises, so Le Cunff was confident about its future.

“Nespresso is an affordable luxury you might want to protect as a consumer during a tough time,” he added.

($1 = 0.9508 Swiss francs)

(Reporting by John Revill; Editing by Alexander Smith)

Tim Hortons teams up with Alibaba to woo Chinese coffee drinkers

BEIJING (Reuters) – The operator of Canadian coffee chain Tim Hortons in China said on Thursday it had forged a two-year partnership with Alibaba Group’s grocery chain that will see the two launch co-branded products.

E-commerce giant Alibaba’s Freshippo will begin sales next month at its stores, of which it has more than 300, as well as through its official app, it said in a statement. Products will include drinks such as Velvet Cocoa Coffee.

Tims China, whose backers include Tencent Holdings, opened its 500th outlet in China last month and has set its sights on having a “profitable network” of 2,750 stores in the country by 2026.

Even so it would still lag Starbucks, the dominant foreign coffee brand in China with 6,000 stores and which also has a wide-ranging partnership with Alibaba.

Tims China was founded in 2019 by Cartesian Capital Group and Canada’s Restaurant Brands International, which also owns the Burger King and Popeyes brands in addition to Tim Hortons.

(Reporting by Sophie Yu and Brenda Goh; Editing by Edwina Gibbs)

Food prices to edge down in 2023 as recession looms – Rabobank

By Maytaal Angel

LONDON (Reuters) – Prices for agricultural commodities like coffee, feed grains and oilseeds could dip next year as many major economies enter recession, but they will remain high in historic terms, Rabobank said in a report on Wednesday.

The bank said consumers face a darkening macro-economic picture, with energy shortages, geopolitical danger and ongoing shortages of some key commodities like wheat boding ill for global food security.

Wheat remains acutely affected by the Russia-Ukraine war and the bank sees a 6 million tonne deficit next year, thanks also to uncertain weather prospects in the European Union, the United States and Argentina.

Elsewhere, Rabobank sees coffee demand growing well below average levels at 1.5%, with benign weather leaving the market in a 4 million bag surplus. It sees relatively low sugar prices meanwhile thanks again largely to benign weather.

“Agricultural prices might recede (yet) that’s not because production will improve significantly but because demand is set to be so weak,” said Carlos Mera, the bank’s head of agricultural commodities market research.

With energy, labour and other costs surging, agricultural commodity prices are about 50% higher than pre-pandemic times, the bank noted.

(Reporting by Maytaal Angel; Editing by Kirsten Donovan)

Climate-resistant coffee trees could save Mozambique rainforest

MOUNT GORONGOSA, Mozambique (Reuters) – Park warden Pedro Muagura sees hope for the future as he picks a ripe handful of cherry red coffee beans from a more resistant variety of coffee trees introduced to communities farming around Mozambique’s Gorongosa National Park.

The prospect of a more reliable harvest from the crop, which thrives in the shade of indigenous trees, has given people living around Gorongosa a longer-term incentive to protect a rainforest that has lost more than 100 hectares of tree cover per year over the past four decades.

Gorongosa is still recovering from a civil war that killed about 1 million people between 1977 and 1992.

The park, once considered one of Africa’s finest, became a conflict site and lost almost all of its wildlife.

Population growth and urbanisation in surrounding communities undermined restoration efforts as remaining animals were poached and forests cut down for firewood, agriculture and housing.

“We realised that if we keep talking as a park, keep talking that we need to do reforestation without having immediate tangible benefits … (progress) was very slow,” Muagura said.

Gorongosa Park’s sustainable development department has been studying coffee tree varieties from around the world that are resistant to pests, disease, drought and prolonged rainy seasons. It planted up the variety Muagura was looking at in 2020.

Weather patterns have grown increasingly erratic in Mozambique, where climate shocks including repeated cyclones have offset livelihoods in one of the world’s poorest countries.

“Sometimes (there is a) very long rainy season, sometimes very short,” Muagura said. “We want to try to have species which can cope.”

Last year, communities around Gorongosa planted more than 260,000 coffee trees and 20,000 indigenous trees.

The park now has 815,000 coffee trees planted over 243 hectares of land.

More than 800 small-scale farmers, 40% of who are women, pick the green coffee, dry the beans and sell them.

“I have gained a lot. I am able to send my children to school, and even though sometimes we experience drought with coffee we are always harvesting and having money,” said Fatiansa Pauline, who is now permanently employed by the coffee project.

(Reporting by Sisipho Skweyiya and Emidio Jozine; Writing by Sofia Christensen; Editing by Alison Williams)

Exclusive-Arabica coffee heads to ICE warehouses, putting pressure on prices

By Maytaal Angel and Marcelo Teixeira

LONDON/NEW YORK (Reuters) – Large volumes of arabica coffee are about to enter ICE exchange warehouses, traders with knowledge of the matter told Reuters, further weighing on global prices that have already hit one-year lows.

The move to replenish ICE stocks removes one of the market’s last supports and may eventually provide consumers respite from high retail coffee prices which always lag moves on global commodity exchanges.

ICE arabica futures have been under pressure of late on concern that global economic growth is faltering just as top producer Brazil could potentially churn out a record crop.

However, ICE stocks – which have stayed between 1 and 5 million bags for the past two decades – are currently at 23-year lows around 380,000 bags, offsetting some of those concerns and leaving the market prone to volatility.

When stocks are low, traders buying futures contracts can have a greater impact on prices as there may not be sufficient coffee available to meet their demand so those who have sold futures may have to buy back their positions.

ICE exchange data shows that while stocks are critically low, more than 160,000 bags are currently sitting in warehouses waiting to be certified for delivery against futures contracts if they pass quality controls.

Traders say at least another 100,000 bags are on their way.

“If certified stocks start rising significantly there’s nothing bullish left in the market. They would have to rise by more than 200,000 bags though,” said a Europe-based trader at a global trade house.

Certified stocks are a strong driver of ICE coffee prices because, unlike other factors, they are visible to all on a daily basis and many algorithmic funds are pre-programmed to buy when they fall and sell when they rise.

The coffee crop in Brazil, responsible for around 40% of global arabica production, could grow by as much as 10% in 2023 due to favourable weather in recent months, analysts say.

That should push prices for exchange-grade Brazilian coffee, known as ‘semi-washed’, down to levels where it becomes economical to deliver the beans to ICE – a market of last resort at times when there is excess supply.

Traders said physical prices for Brazilian semi-washed coffee dipped in September to levels where exchange deliveries became economical, but the fall was short-lived, hence just 250,000 bags are at or heading to exchange depots to be certified this year.

Next year, those numbers could swell if the favourable weather in Brazil holds up and demand remains depressed due to the economic downturn.

“Demand is very, very quiet. No one wants to buy, roasters are stepping out the market. Whoever (has) coffee wants to get out so the only natural buyer is (exchange participants),” said another Europe-based trader.

(Reporting by Maytaal Angel and Marcelo Teixera; Editing by Emelia Sithole-Matarise)

Illycaffè nine-month core profit up despite 20% increase in costs

MILAN (Reuters) – Italian premium coffee maker Illycaffè said on Wednesday its revenues rose 15% and its core profit improved in the first nine months of the year despite a 20% increase in raw materials and logistics costs.

The group, which is planning to go public by 2026, expects a double digit jump in revenues and a growth in profitability this year.

Illycaffè said its revenues were helped by a recovery of out-of-home consumption and they grew 32% in the Unites States, a key market in the group’s strategy.

(Reporting by Elisa Anzolin, editing Federico Maccioni)

Exclusive-Brazil coffee defaults spike for second year in a row

By Maytaal Angel and Marcelo Teixeira

LONDON/NEW YORK (Reuters) – Brazilian coffee farmers are defaulting on contracts for a second straight year, according to traders and lawyers representing the industry, failing to deliver on pre-agreed sales and exposing trade houses to losses.

    The defaults, though less widespread than last year, have scrambled the coffee market, leaving traders reluctant to agree to forward sales for next year’s crop or the one after.

Defaults started to pick up last year after a series of price shocks caused by severe frosts that ruined the harvest.

    This year’s harvest was smaller than expected. Some analysts cut their initial estimates by nearly 4 million bags as trees have taken longer to recover from 2021’s frosts and drought. Coffee prices in August and September traded between $2.17 and $2.21 per pound, over 70% higher than two years ago.

    The surge in prices gave Brazilian farmers an opening to default on contracts so they could sell beans on the spot market, earning a higher price that outweighs any liability for a default.

    Several major exporters such as Sucafina, Olam, Louis Dreyfus and COFCO, as well as co-ops including No. 1 exporter Cooxupe, are legally battling farmers for compensation over contract defaults, according to court documents seen by Reuters.

Sucafina, Olam, Dreyfus and COFCO did not respond to requests for comment. Cooxupe declined to comment.

    “We’ve been told to have less exposure with (Brazilian farmers). It’s going to be one or two years until traders forget” and start buying forward again, said a trader at a large international commodities trading company, asking not to be named.

WIDER IMPACT OF DEFAULTS

    Forward selling by farmers and exporters from top exporter Brazil is an important feature of the market. Advance sales help reduce market fluctuations because they allow farmers to sell throughout the year, not just during harvest.

    Lawyer Cristiano Zauli from Cristiano Zauli Advogados law firm, who assists traders in cases against Brazilian farmers, said he had filed around 50 lawsuits this year against about 100 last year, seeking compensation from coffee producers who have failed to deliver.

    He said he had obtained court orders to seize coffee at farms, similar to last year when harsh frosts damaged around 15% of Brazil’s coffee crop and pushed prices to multi-year highs.

    Traders said this year’s wave of defaults caused the ICE futures price to spike in late September ahead of the front month contract expiry, and could do so again ahead of the December contract expiry on Dec. 19.

    Traders who buy coffee a year or two in advance usually hedge purchases by taking short futures positions. When futures rise, they take a loss on that position, but can offset it with a similar rally in physical coffee prices.

    However, when farmers default, traders do not have the physical coffee to sell to offset the futures market. Instead, traders cover short positions by buying more futures, magnifying wild swings in the market.

That’s what happened in September, when Arabica coffee futures rose from around 2.16 cents per pound to 2.32 cents late in the month, a 7% increase.

    A lawyer working for one of the five largest coffee exporters in Brazil said the defaults concerned less than 10% of Brazil’s total forward contracts. That would still be a significant amount since Brazil produces about 35% of the world’s coffee.

(Reporting by Marcelo Teixeira; Editing by Bernadette Baum)

Italy’s Illycaffe to pay global employee bonus, CEO tells paper

MILAN (Reuters) – Italian premium coffee maker Illycaffe will pay a cash bonus to its employees to help them cope with increasingly stretched finances, its chief executive told Il Corriere della Sera newspaper on Sunday.

The Ukraine crisis has lowered economic growth expectations around the world while soaring inflation is taking a heavy toll on household finances, especially in Europe.

Illycaffe CEO Cristina Scocchia said the company would split a 500,000 euro ($493,000) bonus pool among its 1,350 employees worldwide by the end of the month.

“We need to combine profits and social values,” she said.

Scocchia also said the company’s raw materials and logistics costs had increased 20% this year but it had decided to compress its margins rather than raise final selling prices.

She also confirmed a plan for the group to go public by 2026.

($1 = 1.0142 euros)

(Reporting by Giulio Piovaccari; Editing by David Goodman)

Global coffee market favoring higher quality, not higher volumes

By Marcelo Teixeira

NEW YORK (Reuters) – The global coffee market is going through a transformation trend that will involve higher quality and pricier coffees, but not higher overall traded volumes, as people increasingly use single doses and cut out old-style, large dripping jars.

The COVID-19 pandemic boosted that movement, according to an industry expert, as people were cut out of office coffee and started to explore new processes and qualities.

“There is no way back,” said Henrique Dias Cambraia, a coffee producer, processor and the president of Brazil’s Specialty Coffee Association (BSCA).

“Coffee drinkers increased their knowledge, acquired equipment – they are willing to spend more on higher quality,” said Cambraia in an interview, adding that the market has experienced the growth of single-dose offerings with Keurig dominating in the United States and Nestle’s Nespresso leading in Europe.

“This trend will probably limit volumes, because those processes use less coffee, but it will boost pricier specialty coffee sales,” he added.

The U.S. National Coffee Association said in its latest data trends report at the end of September that 54% of Americans had at least one specialty coffee serving in the prior week.

Cambraia said the trend is stronger in richer countries, but that it is also happening in emerging economies where there has been improvement in incomes.

Farmers are aware of the change, he said, and are adapting to produce better coffees.

Brazil, for example, the world’s largest producer and exporter, which in the past was mostly a supplier of commodity coffee, is currently shipping several types of high quality products.

Cambraia estimates around 20%-25% of Brazil’s arabica coffee is currently qualified as specialty. He expects that to increase as newer-generation farmers acquire knowledge of post-harvest processes to increase quality, such as fermentation, and apply that to family farms.

(Reporting by Marcelo Teixeira; Editing by Josie Kao)

Bolsonaro ally says Brazil farm sector can adapt to Lula victory

BRASILIA (Reuters) – The leader of Brazilian President Jair Bolsonaro’s party and the farm caucus in the Senate said on Friday that the powerful agribusiness sector is pragmatic and will adapt to an eventual victory by the incumbent’s leftist presidential challenger.

Senator Wellington Fagundes, re-elected on Sunday for Mato Grosso, Brazil’s top grain-producing state, told Reuters he hopes Bolsonaro will win re-election. But a win by former President Luis Inacio Lula da Silva would not be the end of the world for the farm industry.

“Farmers will jump into Lula’s lap the day after he is elected. They are very pragmatic,” said Fagundes, who has served Mato Grosso for 20 years in both chambers of Congress.

Fagundes said he believes Bolsonaro will cede power without contesting the result of the Oct. 30 runoff if Lula wins, playing down the danger of the president’s attacks on Brazil’s electronic voting system.

“He attacks the electoral system because he is a provocateur,” the senator said of Bolsonaro’s baseless claims that its electronic voting system is vulnerable to fraud.

Lula won the most votes in the first round of the election on Sunday, with 48% support against 43% for Bolsonaro, who outperformed opinion surveys amid a wave of conservative sentiment. His pro-gun views and opposition to indigenous land claims have made him the darling of many farm sector leaders.

Bolsonaro’s right-wing Liberal Party emerged from the election as the largest in both chambers of Congress.

Former Agriculture Minister Tereza Cristina Dias, who won a Senate seat on Sunday, is a strong candidate to be the next president of the Senate, Fagundes said.

He said the chances of another newly elected Bolsonaro ally, former Women’s Rights Minister Damares Alves, getting the position are “zero.”

(Reporting by Anthony Boadle and Ricardo Brito; Editing by Marguerita Choy)

Consumers to ditch cafes for coffee at home amid rising prices, says ICO

By Luis Jaime Acosta

BOGOTA (Reuters) – Consumers will choose drinking coffee at home over cafes and restaurants due to rising inflation and risks of recession in coming months, the executive director of the International Coffee Organization (ICO) said on Friday.

International coffee supply has not been able to meet demand at a time when inventories are low, said Vanusia Nogueira, attributing the lower global harvest in the 2021/22 coffee year to the effects of climate change.

“We have many climate problems in the top producing regions,” she told Reuters in an interview in Colombian capital Bogota. Although coffee prices had risen, growers were unable to deliver more product due to the climate-related issues, she said.

Total production for the 2021/22 coffee year hit 167.2 million 60-kilogram bags, down 2.1% from 170.83 million bags in the previous coffee year, according to ICO statistics, which found global consumption of coffee rose 3.3% to 170.3 million bags.

Coffee prices are expected to remain stable in 2023, Nogueira said.

As during the coronavirus pandemic, consumption is expected to increase in homes and decrease in cafes and restaurants, but overall volumes of sales and consumption should remain stable, she said.

“I don’t think there will be an impact in terms of volumes, but in the way coffee is drunk and in the quality, people are going to lower the quality of what they drink and change where they drink it,” she said, warning that producers of specialty coffees could be hardest hit.

Climate change is the coffee industry’s biggest challenge, she said, adding that the ICO is working on creating a resilience fund alongside banks and other organizations to look more closely at productive zones and climate change-resistant coffee varieties.

(Reporting by Luis Jaime Acosta; Writing by Oliver Griffin; Editing by Rosalba O’Brien)

‘Almost a luxury’: EU coffee prices up 16.9% in August

(Reuters) -Starting the day with a cup of coffee has become more expensive, the European Union’s statistics office said on Thursday, highlighting a jump in the price of the staple along with those of sugar and milk.

“Recent price rises might make this morning staple almost a luxury,” Eurostat said, reporting that coffee prices had on average surged 16.9% in August from a year earlier.

Fresh whole milk now cost 24.3% more on average, while consumers paid 22.2% more for fresh low fat milk, Eurostat said.

Sugar saw the sharpest increase, with its average price jumping 33.4%.

The data showed prices had risen for these four items in all EU member countries except Malta, where the price of fresh low fat milk was unchanged.

Finland and Lithuania saw the highest changes in coffee prices, with increases of 43.6% and 39.9% respectively, followed by Sweden and Estonia.

Poland saw the highest jump in sugar prices, which leapt 109.2% from August 2021.

In the euro zone – the 19 countries sharing the euro – consumer price inflation hit 9.1% in August, driven by energy and food prices. It hit a new record high of 10% in September, according to Eurostat’s flash estimate.

(Reporting by Valentine Baldassari in Gdansk; Editing by Bernadette Baum)

Nestle pledges $1 billion to coffee sustainability plan

By Maytaal Angel

LONDON (Reuters) -Nestle will spend more than 1 billion Swiss francs ($1 billion) by 2030 on efforts to source coffee sustainably, the food company said on Tuesday, more than double its previous pledge.

The move provides more evidence of how major consumer goods businesses are making changes to decades-old operational systems due to climate change concerns.

At the Reuters IMPACT conference on Monday, IKEA CEO Jesper Brodin said home deliveries would be made by electric vehicles by 2025 as part of a target at the world’s No.1 furniture brand to reduce greenhouse gas emissions over the next eight years.

The boss of Rolls Royce also said during the IMPACT conference that the aviation industry needs to accelerate the use of biofuels. Ivan Menezes, CEO of Diageo, the world’s biggest exporter of Scotch whisky through brands like Johnnie Walker, said Scotland could face a water shortage unless businesses and lawmakers act.

Study after study has shown that by 2050 roughly half the land currently used to grow coffee, especially the high quality arabica variety, could be unproductive thanks to rising temperatures, drought and disease.

Multinationals are meanwhile facing increased reputational and legal pressure from consumers and governments alike to clean up their global supply chains in the fight against climate change.

The European Commission has proposed several laws aimed at preventing and, in the case of forced labour, banning the import and use of products linked to environmental and human rights abuses.

Nestle, which has already pledged to source all its coffee sustainably by 2025, said it is aiming, by that date, for 20% of its coffee to be grown using “regenerative” agricultural practices.

These include planting cover crops to protect soil, using organic fertilizers to improve soil fertility and increasing the use of agroforestry and intercropping to preserve biodiversity – all with the aim of halving greenhouse gas emissions by 2030.

The company’s statement announcing its plan to double spending on sustainable coffee sourcing said it is “committed to supporting farmers who take on the risks and costs associated with the move to regenerative agriculture”, and will provide programmes aimed at helping them improve their income.

A major coffee report published last year said there is little evidence efforts by the world’s top coffee roasters and traders to prevent human rights and environmental abuses are having any impact, with most farmers operating at a loss and unable to produce sustainably.

The coffee sector is valued at $200 billion-$250 billion a year at the retail level, based on the report, but producing countries receive less than 10% of that value when exporting beans, and farmers even less than that.

Around 125 million people around the world depend on coffee for their livelihoods, while an estimated 80% of coffee-farming families live at or below the poverty line, according to non-profit organisations Fairtrade and Technoserve.

($1 = 0.9900 Swiss francs)

(Reporting by Maytaal Angel; Additional reporting by Richa Naidu; Editing by Susan Fenton and Jane Merriman)

Vietnam downgrades Typhoon Noru to tropical storm, but warns of flood risks

HANOI (Reuters) -Vietnam on Wednesday downgraded Typhoon Noru to a tropical depression, but warned residents to stay on alert because of the risks from flooding and landslides caused by heavy rain, the government said.

The storm made landfall in the early hours with winds of 117kph (72mph) in the province of Quang Nam, home to the historic city of Hoi An and resort of Danang, the weather agency told state media.

“I don’t know if my roof has been torn down yet. The wind is just too strong,” Le Thi Buoi, 70, said by telephone from a shelter in the coastal community of Tam Ky.

“You can hear it’s roaring even inside this shelter,” she said.

There were no immediate reports of casualties, but photographs posted on social media and on state media showed downed trees and mudslides blocking roads.

Noru was the strongest storm to hit the neighbouring Philippines this year and killed at least eight people when it made landfall on Sunday night, flooding farmland and communities and damaging crops, mainly rice.

Vietnam is also vulnerable to destructive storms and flooding because of its long coastline. Natural disasters – predominantly floods and landslides triggered by storms – killed 139 people and injured 150 others in the country last year, official data showed.

(Reporting by Phuong Nguyen in Hanoi; Writing by Ed DaviesEditing by Christian Schmollinger and Gerry Doyle)

Vietnam shuts airports, imposes curfews as Typhoon Noru nears

By Phuong Nguyen and Neil Jerome Morales

HANOI (Reuters) – Vietnam closed airports, announced curfews and urged thousands more people evacuate on Tuesday as intensifying Typhoon Noru barrelled towards the country, two days after causing at least eight deaths and widespread flooding in the Philippines.

Hundreds of flights in Vietnam were cancelled and thousands of people started to evacuate their homes in central provinces, in anticipation of one of the most powerful storms to hit the country in 20 years.

Wind speeds could reach 183 km (113.71 miles) per hour late on Tuesday, the meteorological agency said, adding that Noru was expected to make landfall on Wednesday before weakening and heading to Thailand.

About 270,000 military personnel were placed on standby in Vietnam, as Prime Minister Pham Minh Chinh urged authorities to expedite preparations.

“We don’t have much time left. The storm is intensifying so our responses must be stronger and faster,” he told an emergency meeting on Tuesday.

“Evacuation must be done as soon as possible with top priorities being people’s lives and assets.”

The central provinces of Quang Ngai, where a major oil refinery is located, and Quang Nam, home to the World Heritage site of Hoi An, were expected to be worst hit.

Footage from state television showed people fortifying their homes with bricks and sandbags in Quang Nam province, where a curfew was imposed and more than 133,000 residents were forced to leave their homes.

Local governments ordered curfews also in the popular tourist cities of Danang and Hue.

Authorities were racing to secure the country’s coffee growing areas north of the Central Highlands region ahead of a typhoon the meteorological agency said was packing wind speeds of 134 kph to 149 kph early on Tuesday.

“The storm is so strong that we’ve started feeling the impact even when it has not made landfall yet,” Mai Van Khiem, chief of Vietnam’s weather agency said, adding the most dangerous time would be a 10-12 hour period from late Tuesday.

Noru was the strongest storm to hit the Philippines this year and killed at least eight people when it made landfall on Sunday night, flooding farmland and communities and damaging an estimated 1.29 billion Philippine pesos ($21.82 million) of crops, mainly rice.

Footage from a local broadcaster showed police cutting up fallen trees blocking roads in Quezon province, and residents sorting through debris with their hands.

About 46,000 people were sheltering in evacuation centres on Tuesday and many more were left without electricity, the disaster agency said.

($1 = 59.1080 Philippine pesos)

(Reporting by Phuong Nguyen in Hanoi and Neil Jerome Morales in Manila; Editing by Kanupriya Kapoor, Ana Nicolaci da Costa, Martin Petty)

IMF team heads to Ghana on Monday to discuss loan programme request

(Reuters) – The International Monetary Fund confirmed on Sunday that a staff team will visit Ghana this week to continue discussions with the authorities on policies and reforms that could be supported by an IMF lending arrangement.

Ghana turned to the IMF for help in July as its balance-of-payments deteriorated and hundreds took to the streets to protest against economic hardship. An IMF staff team briefly visited the country two weeks later.

Reuters’ reported last week that an IMF team would visit Ghana this week. The IMF, in a statement on Sunday, said the team would arrive on Monday and stay until Oct. 7.

The government of Ghana, a major gold and cocoa producer, has been struggling to tame galloping inflation, reduce public debt and shore up the local currency. Its balance-of-payments deficit swelled to nearly $2.5 billion by the end of June from around $935 million in March.

A source with knowledge of the matter told Reuters last month that an eventual agreement between Ghana and the IMF will likely consist of $3 billion in financing over a three-year period, and contain elements of both Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes.

(Reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Susan Fenton)

Exclusive-Brazil govt admits to problems with coffee crop views, plans revision

By Roberto Samora

SAO PAULO (Reuters) – Brazil’s government admitted that its estimates for coffee crops over recent years have problems and need improvements to better reflect the reality, since the numbers for production have been smaller than the sum of local consumption plus exports.

In an interview with Reuters on Thursday, the director of Agricultural Policy at Brazil’s food supply and statistics agency Conab, Sergio De Zen, said that due to those discrepancies there is a process going on do revise numbers and methodology for Conab’s coffee crop forecasts.

Conab’s coffee numbers for Brazil, the world’s largest producer and exporter, have for years been subject of debate among coffee traders and analysts, who generally consider production estimates to be too low.

Trading houses and independent analysts usually have higher crop numbers for Brazil than Conab. For this year, for example, while Conab sees the crop at 50.4 million 60-kg bags, the U.S. Department of Agriculture (USDA) expects 64.3 million, Rabobank sees 63.2 million and consultancy Safras & Mercado, 58.2 million bags.

“We’ve been talking to co-ops, farmers and exporters, trying to work together to be able to have a crop projection that better reflects the reality,” said De Zen.

The director’s comments came after Reuters questioned Conab’s forecasts with numbers for Brazil’s consumption and exports. There is a clear supply gap when they are compared (see table).

BRAZIL COFFEE LOCAL USE CONAB CROP SUPPLY

S&D(MLN BAGS) + EXPORTS PROJECTION BALANCE

2017 52.93 44.97 -7.96

2018 56.64 61.66 5.02

2019 61.60 49.30 -12.30

2020 65.90 63.07 -2.83

2021 61.80 47.70 -14.10

Source: Brazil coffee consumption data from ABIC, export numbers from Cecafe

When numbers for local consumption plus exports are compared with crop projections for the last five years there is a large deficit of more than 32 million bags.

“We’ve done that calculation before…” the director said, admitting to the problem.

Stock numbers could help solve the equation, but Conab has stopped publishing those.

“We have not publish them because the supply balance calculation does not make sense,” he said, confirming the gap.

De Zen said, however, that stocks at farms are not negligible and could help to solve the S&D equation, but he said the number and quality of answers to the stocks poll was low.

The director said that Conab plans to revise the numbers for the crops in recent years in the same way it did with soybean data in 2020, when the revision resulted in millions of tonnes added to the S&D table.

He partially blamed the problems to the bad state of Conab’s structure when the current government took over four years ago.

He said Conab is hiring people to boost the coffee projection, adding that it will use satellite data to better measure planted area and improve agricultural yields calculation.

(Reporting by Roberto Samora; additional reporting and writing by Marcelo Teixeira in New York; Editing by Marguerita Choy)

U.S. coffee chains’ sales rise 10% to near pre-pandemic levels -report

By Marcelo Teixeira

NEW YORK (Reuters) – Sales by branded coffee shops in the United States increased 10% in the 12 months to June 2022 to reach $45.8 billion, a value that is 96% of its pre-pandemic sales, while the number of stores surpassed those seen before 2020, a report said on Tuesday.

According to Project Café 2023, a publication by World Coffee Portal, there are now 38,411 branded coffee shops in the United States, the world’s largest consumer of the beverage, or 2.8% more than before the coronavirus pandemic.

The country’s largest coffee operators – Starbucks Corp, Dunkin’ and Panera Bread – all increased their presence in the U.S. market to reach 15,650, 9,262 and 2,173 stores respectively, the report said.

Most coffee chains posted increases in sales in 2022 compared with the previous 12-month period, it said, with 46% of them reaching sales growth of 5% or more.

The report, however, said that “ongoing staff shortages and an emergent cost-of-living crisis represent significant short-to-medium term challenges for the industry” going forward.

In terms of habits, it said the industry continues to develop following changes seen during the pandemic.

“Pre-ordering, delivery and drive-thru, are set to remain as consumers maintain a heightened desire for convenience.”

Oregon-based Dutch Bros, which operates 603 stores, was the fastest-growing major U.S. branded chain at 28%.

Blank Street Coffee, backed by private equity financing, was also a highlight in the report for its speed of growth. It launched in the middle of the pandemic in May 2020 and has opened 40 shops in New York City and Boston so far, aiming to have 100 locations by the end of the year.

(Reporting by Marcelo Teixeira; editing by Jonathan Oatis)

Analysis: Scientists look to solve ozone threat to Africa’s food security

By Gloria Dickie

ABERGWYNGREGYN, Wales (Reuters) – Plant scientist Felicity Hayes checks on her crops inside one of eight tiny domed greenhouses set against the Welsh hills. The potted pigeon pea and papaya planted in spring are leafy and green, soon to bear fruit.

In a neighbouring greenhouse, those same plants look sickly and stunted. The pigeon pea is an aged yellow with pockmarked leaves; the papaya trees reach only half as tall.

The only difference between the two greenhouse atmospheres – ozone pollution.

Hayes, who works at the UK Centre for Ecology and Hydrology (UKCEH), is pumping ozone gas at various concentrations into the greenhouses where African staple crops are growing. She is studying how rising ozone pollution might impact crop yields – and food security for subsistence farmers – in the developing world.

Ozone, a gas formed when sunlight and heat interact with fossil fuel emissions, can cause substantial losses for farmers, research suggests, by quickly aging crops before they reach full production potential and decreasing photosynthesis, the process by which plants turn sunlight into food.

Ozone stress also reduces plants’ defences against pests.

A 2018 study in the journal Global Change Biology estimated global wheat losses from ozone pollution totalled $24.2 billion annually from 2010 to 2012.

In a January paper published in Nature Food, researchers tallied some $63 billion in wheat, rice and maize losses annually within the last decade in East Asia.

Scientists are particularly worried about Africa, which will see more vehicle traffic and waste burning as the population is set to double by mid-century.

That means more ozone pollution, a major challenge for smallholder farmers who make up 60% of the population in sub-Saharan Africa.

“There is a serious concern that ozone pollution will affect yields in the long run,” said senior scientist Martin Moyo at the International Crops Research Institute for the Semi-Arid Tropics in Zimbabwe.

He called out an “urgent need for more rural studies to determine ozone concentrations” across the continent.

Earlier this year, scientists with the UK-based non-profit Centre for Agriculture and Bioscience International (CABI) set up ozone monitoring equipment around cocoa and maize fields in Ghana, Zambia and Kenya.

But most African countries do not have reliable or consistent air pollution monitors, according to a 2019 UNICEF report. Among those that do, few measure ozone.

RISING OZONE

In the stratosphere, ozone protects the Earth from the sun’s ultraviolet radiation. Closer to the planet’s surface, it can harm plants and animals, including humans.

While air quality regulations have helped reduce ozone levels in the United States and Europe, the trend is set to spike in the opposite direction for fast-growing Africa and parts of Asia.

Climate change could also speed things along.

In areas of Africa with high fossil fuel emissions and frequent burning of forests or grassland, new research suggests hotter temperatures could make the problem worse as they can accelerate chemical reactions that create ozone.

While research has found North American wheat is generally less impacted by ozone than European and Asian counterparts, there have been fewer studies on African versions of the same crops that over decades of cultivation have been made more suitable to those environments.

Once every two weeks in a Nairobi market, farmers from the countryside bring samples of their ailing crops to a “plant doctor” in hopes of determining what is affecting their yields.

“A lot of (ozone) symptoms can be confused with mites or fungal damage,” said CABI entomologist Lena Durocher-Granger. “Farmers might keep applying fertilizer or chemicals thinking it’s a disease, but it’s ozone pollution.”

Her organization is working with UKCEH to help people identify signs of ozone stress and recommend fixes, such as watering less on high ozone days. Watering can leave leaf pores wide open, causing plants to take in even more ozone.

RESILIENT CROPS

In her Welsh greenhouses, Hayes was exposing crops in one dome to the lowest amount – 30 parts per billion – similar to the environment of North Wales. In the dome with the highest ozone level, plants were receiving more than triple that amount, mimicking North Africa’s polluted conditions.

Hayes and her colleagues have found that certain African staples are more affected than others.

In a dome filled with a mid-level amount of ozone, North African wheat plants had quickly turned from green to yellow within just a few months.

“You get tiny thin grains that don’t have all the good bits in them, a lot of husk on the outside and not as much protein and nutritional value,” Hayes said.

That fits with research her team published last year on sub-Saharan plant cultivars, which found that ozone pollution could be lowering sub-Saharan wheat yields by as much as 13%.

Dry beans could fare worse, with estimated yield losses of up to 21% in some areas, according to the same study, published in Environmental Science and Pollution Research.

“Beans are a useful protein source in Africa, and subsistence farmers grow a lot of it,” said Katrina

Sharps, a UKCEH spatial data analyst.

Sub-Saharan millet, however, seemed more ozone tolerant. Yet Africa produced about half as much millet as wheat in 2020.

“If the soil and growing conditions are suitable,” Sharps said, “subsistence farmers may consider growing more millet.”

(Reporting by Gloria Dickie; Editing by Katy Daigle, Marguerita Choy and Bill Berkrot)