http://www.businessweek.com/news/2010-01-27/starbucks-kraft-purchases-may-help-peru-coffee-sales-to-record.htmlJanuary 27, 2010, 02:09 PM EST
By Alex Emery
Jan. 27 (Bloomberg) -- Peru’s coffee exports may rise to a record this year as buyers including Kraft Foods Inc. and Starbucks Corp. boost purchases of the bean because of improving quality, the head of the Peruvian Coffee Chamber said.
Sales of coffee, Peru’s biggest agriculture export earner, may climb by 12 percent to $650 million in 2010, compared with $580 million a year earlier, Eduardo Montauban, head of the association, said yesterday in an interview in Lima.
Peru’s coffee output has doubled since 1999 as the country’s exporters increased yields and enlarged plantations by half to 370,000 hectares (914,000 acres), according to the Agriculture Ministry. This year’s harvest is slated to rise to 5 million bags from 4.8 million bags in 2009, Montauban said. The country is the world’s largest producer of organic coffee.
“Companies are buying more of our organically grown Arabica beans because they’re cheaper than Colombian coffee, have a smooth flavor and have improved in quality in recent years,” Montauban said. “The long stretch of strong prices is also prompting farmers to plant more.”
Coffee prices may rise this year as harvests drop in Brazil, Vietnam and Mexico, said Scotiabank Peru analyst Pablo Nano. A bag of coffee weighs 60 kilograms (132 pounds).
Lower Production
Growers worldwide will probably produce 125 million bags this year, 2.3 percent less than last year, the International Coffee Organization said Dec. 9.
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