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Philipp Bros. becomes major coffee trading force within the year.

Philipp Bros. becomes major coffee trading force within the year

Philipp Brothers, a London-based sugar, metal, rice, oils and cocoa trading house has overcome many obstacles to enter the New York coffee trading industry. After a short foray into the industry, the company has established themselves as one of the major commodity houses in New York. Philipp Brothers has long held a successful run in soft commodities, so coffee was just a natural extension, says Cyril Flajsner about the company.

Flajsner is quick to point out establishing themselves in coffee has not been an easy task. Philip Bros. met resistance within the trade as some firms attempted to keep them out of the market. What has been the company's main capitalization, Flajsner says proudly, are the employees they now have that came with a long established track record among the major contacts in the industry. At times, unfounded rumours were circulated about the company, but Flajsner feels the coffee traders and company have proved themselves over and over to this industry.

The art of coffee dealing has changed over the last 10 years. The number of roasters are now more concentrated leaving less business to be shared, and the number of dealers and medium-sized firms have dwindled. Roasters need stable financial companies able to do hedging, futures and options for the roaster. In actuality, the importer serves as an insurance policy for the roaster.

Philip Bros. is a regular caller to the producing countries, with the aim of instituting partnerships with established exporters. Flajsner shrugged when asked about having problems with certain producers. "There's always trouble with orgin countries, that's why you have traders." The company has not met with any abnormal trouble and he emphasized that Philipp Bros. has always lined up to their contract.

Jeff Bauml, vice president, has noticed that roasters are purchasing more Milds but they haven't seen a real quality improvement. Sometimes exporters don't deliver as promised. In that case, said Bauml, they, as importers must scramble to replace the coffee as best they can. Bauml and Flajsner head up the coffee department of six and work with the London coffee department of ten.

The company was willing to discuss their views on the International Coffee Agreement which at the time of the interview, both ICA and quotas were still in effect. Both men were 100 percent for a free market. "A political agreement of some sort will always be around," said Flajsner, "The two-tier market of non-member quota and prices present a huge logistical problem to overcome and so far no effective alterations have been made."

Bauml noted that the producers were not supposed to increase their production but all the countries have increased their production. The supply and demand picture is distorted, he added, and revealed that approximately two to three million lbs. of coffee are smuggled into member countries from all over the world and this is contributing to the collapse of the ICA.

Both men have seen an oversupply of coffee worldwide for four years now and many growers are interested in quantity and not quality.

Philipp Brothers is one year old now and have proven their competence, along with profits worldwide. They're ready to stay here in New York as a major trading coffee influence.
COPYRIGHT 1989 Lockwood Trade Journal Co., Inc.
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Copyright 1989 Gale, Cengage Learning. All rights reserved.

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Publication:Tea & Coffee Trade Journal
Date:Aug 1, 1989
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