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Early harvest, inventories, cause prices to fall for Kona.

Early harvest, inventories, cause prices to fall for Kona

A record early harvest in August combined with left-over inventories of last year's crop, caused prices for Kona coffee to plummet to five years low. Farm prices, which at one point last year reached $1.00 per pound, fell to an average of 55 cents per pound in September. In response, disappointed farmers are pushing the state of Hawaii Department of Agriculture to ban imports of green coffee into the state, and to establish regulations governing blends of Kona coffee sold within the state.

The immediate price drop was, in response to the statement of C. Brewer, the new corporate owners of Superior Coffee's Hawaii division, that they had an oversupply of Kona coffee and could not commit to purchasing Kona coffee this year. With the largest buyer (more than 50%) temporarily out of the market, prices for green Kona coffee fell to the $4.15 to $5.00 range for Kona No. 1's, depending on quantity. The early harvest, a record for the month of August, meant that the beans were slightly smaller than normal, resulting in lower percentages of the Fancy and Extra Fancy grades.

The price drop could be short lived, as most observers feel that the harvest has already peaked and that the total crop will not exceed last year's estimated 22,000 bags. In addition, proposed regulations to require higher percentages of Kona coffee in blends sold within the state (the Kona Coffee Council has recommended 51%) are expected, if enacted into rules by the State Department of Agriculture, to increase demand among local roasters for Kona coffee.

It is estimated that the average cup of "Kona blend" coff sold within the state contains less than 5% Kona coffee, and there is no current rule requiring any minimum content (see "Kona coffee attempts truth-in-labeling law" in Tea and Coffee Trade Journal, June, 1986).

Meanwhile, the Plant Quarantine Division of the Department of Agriculture is considering a proposal to ban importation of all green coffee into the state for fear that it could transmit diseases such as coffee leaf rust, coffee berry borer, and coffee berry disease. It has already banned all imports of African green coffee because of possible coffee berry disease, and has also banned all imports into islands where coffee is in commercial production.

Those islands now include Hawaii (where Kona is located), Maui, Molokai and Kauai. Since Hawaiian sugar producers on Oahu are considering switching some acreage into coffee, they could trigger banning imports of green coffee into Honolulu, where the large majority of coffee in the state is roasted.

The proposed ban is favored by Kona growers as well as the large sugar companies which are planting coffee on the other islands, and generally opposed by local roasters.
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Title Annotation:coffee
Author:Regli, Robert
Publication:Tea & Coffee Trade Journal
Date:Oct 1, 1990
Words:466
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