Firs Lagrest Coffee Crop

THE SOFT SPOT(22)

08/18/2011

(800) 611-6974

Rrosenberg@pfgbest.com  

Coffee

Life Time Trading Range 41.50 Cents - $337.50 per Pound

Trades on The ICE 2:30 AM – 1 PM CDT  

In a move favorable to U.S. Coffee drinkers the J.M. Smucker Company has announced a price cut of 6 percent on the majority of it’s Coffee products. This follows a year in which the company raised Coffee prices some 23 percent. You can be certain that other Coffee distributors will follow suit. The decrease in Coffee prices is linked lower priced green Coffee futures. Consumers should catch a break as well. How long will it take for retailers to lower their prices?

This week Coffee rallied to price levels not reached since mid-July. September Coffee futures are now more than 30 cents above last week’s low. Everyone is looking for the reason this rally took hold. A Lower U.S. dollar - an improving macroeconomic picture perhaps? There is talk that 70,000 tonnes Coffee due to be exported from Vietnam are being held back owing to tight Coffee stocks. Has anything really changed? This spurt to the upside could be nothing more than a technical response to the month long trading range Coffee had been thrashing about in.

Close to 5 percent of Vietnams Coffee has been hit by an infestation of falling fruit disease. This disease causes Coffee cherries to fall from the Coffee trees before they are mature. Needless to say, if this disease spreads, Vietnamese Coffee output will be adversely affected.

According to the International Coffee Organization’s monthly report, world Coffee exports for the first nine months of this marketing year totaled 80.7 million 60 kilo bags. There is a lot of talk circulating that Vietnam has sold all of the Robusta Coffee it has for now. Sales are sluggish in Brazil. Central America and Colombia will only sell new crop Coffee after the old crop is sold out. Dryness adversely affected Central America’s Coffee trees during the flowering period. Now, too much rain is falling in Colombia. They can’t seem to catch a break.

Smucker's Shareholders Ask for More Transparency on Growing ...

Trillium Asset Management, LLC and Calvert Investment Management, Inc. announced today that Smucker’s (SJM) shareholders have filed a shareholder resolution calling for detailed disclosure by the company about climate-related risks to the Folgers Coffee and other brands, which currently represent 40 percent of Smucker’s overall revenues and the bulk of its recent growth.

Two weeks ago Smucker’s issued its 2011 corporate responsibility report, which ran to 38 pages, but contained only one page devoted to coffee and none to climate change.

In advance of the Smucker’s annual shareholder meeting taking place this week, the Trillium/Calvert shareholder proposal specifically requests that within six months of the 2011 annual meeting, the Board of Directors provide a report describing how the company will manage the social and environmental risks and opportunities connected to the company’s coffee business and supply chain.  In addition, the proxy asks that the Board conduct and make public a concise discussion of how it will address temperature changes, changes in rainfall patterns, and the company’s responsibility for its impact on the coffee-farming families in its supply chain.

Trillium’s Deputy Director of ESG Research and Advocacy, Jonas Kron, said: “Coffee growing supports tens of millions of people around the world and is the second largest export of developing nations.  In addition to being an important element of economic development, coffee has a significant environmental footprint when it comes to water, agricultural chemicals and deforestation.  We are concerned about maintaining the financial success of Smucker’s coffee business in the face of climate change and addressing the social and environmental impacts of its supply chain.  This shareholder proposal will hopefully improve communication on these important issues between the Smucker’s Board and shareholders.