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Bulk coffee from origin.

In the past decade, many test bulk shipments have been performed from several origin countries to Europe and the U.S. The initial bulk coffee shipments were made by a large roaster in the U.S. and another in Holland. These two companies have taken the lead in bulk shipments over the past few years. The U.S. roaster is, in fact, receiving most of its coffee from Brazil in bulk, and is experimenting with receiving bulk from other origins.

Other U.S. roasters are following the lead. As usual, changes cause aprehension. It was the original roaster which experimented with bulk that took the risk to see if transporting coffee in bulk containers would result in damage due to condensation. Others are now getting on the bandwagon. The result of the tests was that coffee was not damaged, and that, in fact, an extremely fresh aroma of coffee was the result. Upon opening the door of the container, the inspectors noticed the lack of odor from the coffee. It was soon realized that the odors once normally detected were the smell of the jute or burlap bag. Bulk shipments allow coffee to be transported without coffee absorbing the odor of the bag.

Coffee is now received in bulk in many locations around the world. From Hamburg, Bremen, and Berlin, in Germany, to Le Havre, France, ti Dirsfelden in Switzerland, to Trieste, Napoli, and Genoa in Italy, Vienna in Austria, and to Jacksonville, New York, and New Orleans in the United States; bulk shipments of coffee have become the trend. Many other locations are now becoming equipped to handle this superior form of transporting coffee.

Silos specifically designed for coffee are present in many locations throughout Europe. In the U.S., it is understood that silos are being designed for locations in New Orleans and Jacksonville. It appears the trend is to build silos in the consuming countries rather than the producing countries, since the silo facilities are able to blend to final roaster specifications. This is impossible from facilities in the origin. At the silo facilities in the consuming countries, coffee can be further processed by sorting for size, and color or washed, according to the roaster's specifications.

Is there a need for silos in producing countries? This is the great unknown. It appears that high volume loading systems are the alternative to silos in the origin. Much less capital is required, and multiple locations appear to be the desired result. For a variety of reasons, exporters and shippers have selected a network of container stuffing agents which appear adept at making the transition to bulk loading.

Countries like Brazil already alive a reliable warehouse structure and benificio. Low costs and, therefore, low rates are impossible to compare with a high cost silo facility. It appears that quality improvements are better performed in ports of the consuming countries. Much greater flexibility, to a varied customer base, is the result.

The quantity of bins required appears to be a major problem at the origin. Numerous bins would be needed to separate the varied qualities of the Arabica bean. Conilon beans could be mixed together in Vitoria. However, will varied exporters mix their coffees together with those of other exporters? It will be impossible to develop such a facility without the support of the exporters. It appears as though there is resistance to the concept by the exporters. Some believe the exporters will be bypassed and the silo operators will buy direct from the growers and, in turn, will become the exporters. Trends in the transportation of coffee may be changing rapidly; however a revolution in the way coffee is traded has not yet occurred and change does not appear to be on the horizon.

It seems unlikely that silo operators will start selling coffee as they would also become an intermediary as well as an exporter. Growers tried in the past to export directly and failed on doing it. On the other hand, silos will undoubtedly have a higher coffee preparation cost than a fully paid benificio. Silo operators may decide to price themselves lower than the market in order to achieve customers. Will a roaster trust just one single country supplier potentially endangering all its blend cost? Our answer to that is that silos at origin must work for exporters if the price will be right. One activity cannot be mixed with the other.

The other Brazilian ports of Paranagua, Rio, and Bahia do not seem to have the volumes of coffee required to support the financial burden of the silo facility. Transportation to the other Ports of Santos or Vitoria would be cost prohibitive.

Buenaventura a port, and Buca, a processing region, in Colombia have already begun bulk shipments. Spinoza, an exporters, has experimented in Bogota and Cartagena. Some experimental shipments have also been made from Costa Rica.

Perhaps Ecuador has the greatest need for a silo facility. Used differently than in other countries, the Ecuadorian beans could be dried to lower moisture content and be color and size sorted to improve quality.

The low volume of coffee in the Caribbean origin will not allow the investment needed to build a silo facility. The African countries would have yet another reason for the rejection of a silo facility. Low ages for stuffing containers and the shortage of skilled personnel to operate an automated facility would create a competitive disadvantage to a simple debagging operation to load containers in bulk.

Indonesia appears to have the potential to fully utilize the benefits of a silo for coffee. One company has already failed in its attempt to coordinate the development of a silo. Of all the origin countries, Indonesia seems best suited because of the high volumes and the need for blending and further processing of the bean.

A moderately sized silo, capable of storing 5,000 tons of coffee, costs nearly US $10 million. It is difficult for the origin countries to invest such a large amount of money in order to compete with the traditional stuffing agents which will modify their facilities to load in bulk.

The future appears to point to silos as being the preferred method of storage. The question is, will the concept be practical in the origin country?

It appears there is a desire by all involved to have the services performed by independent third parties. Supervision of quality, moisture and weight are all required.

Brazil, whose exports of coffee near 30% of the coffee consumed in the world, was the most progressive origin for experimenting with bulk in a container. Policon has been a leader in this process since 1984. Their experience involved tests to both Europe and the United States. During this period, they have developed special liners and special loading systems or stations. Hundreds of containers are loaded in bulk monthly by Policon into their specially designed bag.

Limited storage capacity at the loading station will be needed in producing countries. Silos with a capacity of 1,000 tons will be used for pre-stuffing storage of coffee prior to loading of container. There will also be an absolute need for clean and reliable containers for the carriage of green coffee in bulk or in bags.

Policon has initial plans to build loading stations with minimal storage capacity in the ports of Santos and Vitoria. They have stated that the cost of such silos will be such that its use will be included in the bulk loading rate without affecting the bulking logistic savings.

The new silo technology is apparently based on the silo facility first built in Germany. They created the concept and have built virtually every silo system created.

1992 appears to be the year that bulk shipments will become the norm. All parties are preparing for the apparent onslaught of bulk coffees to be delivered in bulk. Many advantages are the result. Major cost savings by shipping 330 bags in a 20 foot container, as well as quality improvements, are the result. The extra tonnage of coffee moving in the containers causes a situation in the U.S. whereby containers will be overweight. Special chassis can be used to overcome this problem. Silos in the port area can also be a huge advantage.

Traditions enduring for many centuries in the coffee trade appear to be changing. The time honored jute or burlap coffee bag will be replaced because of the development of the 20 shipping container. Containerization has offered many advantages for the coffee industry; but perhaps the greatest advantage will be the improved quality of coffee and the reduced cost of transportation because of handling green coffee in bulk and the use of silo facilities in the consuming countries. Projections point to the fact that nearly 75% of the coffee transported to Europe and the U.S. will move in bulk by 1995.
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Title Annotation:export-import of coffee, storage techniques
Author:McCormick, Stephen
Publication:Tea & Coffee Trade Journal
Date:May 1, 1991
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