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Puerto Rico begins coffee exports to Japan.

Puerto Rico begins coffee exports to Japan

The Puerto Rican coffee industry, hurt by labor shortages, low prices and last year's Hurricane Hugo, finally has something to cheer about: the beginning of coffee exports to Japan.

The transaction, announced in early January, involves Lares coffee grower Neftali Soto and Japan's largest coffee distributor, the Tokyo-based Ueshima Coffee Corp. Soto will initially sell 40,000 pounds (400 quintales) of premium coffee beans to Ueshima under the Alta Grande label.

Robert Ruenitz, a representative of Nipuspan International Corp., formed for this specific venture, declined to put a dollar value on the transaction, saying financial details were private. However, a similar gourmet label, Jamaica's Blue Mountain coffee, retails for $22 a pound in New York and considerably more in Tokyo. That would put the retail value of the initial shipment of Puerto Rican coffee, being marketed under the Alto Grande label, at around $900,000.

"The market for premium coffee in Japan is very sophisticated," he said. "Ueshima is after good coffee wherever they can find it. They search every corner of the world. Where it will go in the Japanese market is really a matter of how the Japanese consumer reacts."

The president of Nipuspan, Dennis Evans, lives in Vega Baja, as does its vice president of operations, Jose Texidor Colon.

According to Alfonso Davila, the No. 2 man at Puerto Rico's Department of Agriculture, "Our policy is to open new foreign markets for quality coffee exports." Davila predicts the island will be self-sufficient in coffee production within five to 10 years.

"We'd like to see European countries import our coffee. This could help us expand our production, and enter into competition with Jamaica, Hawaii and other places that export gourmet coffee," he said.

The 40-foot container is being shipped by Sea-Land on Jan. 23 and is expected to arrive in Yokohama by mid-February.

The shipment, while small, comes at a time when Puerto Rico must import more

and more coffee just to meet local demand. In 1989, the island's coffee crop came in at some 325,000 quintales, while total island consumption was at 350,000 quintales. The difference had to be imported from Colombia, Costa Rica, the Dominican Republic and other countries. For this reason, Puerto Rican law limits coffee exports to 100,000 quintales. This shipment comes to 400 quintales.

Says Ruenitz: "This is very modest in terms of quantity. We are living in a free enterprise economy where growers can sell their coffee internationally. It's not going to cause any hardship to coffee drinkers in Puerto Rico. Rather, it should be an incentive for future coffee growers to product fine coffee."

Davila said some 80,000 quintales of coffee was lost as a result of Hurricane Hugo. That comes to $13.7 million, not including tree damage. Earlier estimates had gone as high as $50 million. Some 15,000 people work in the island's coffee industry, up from 12,000 a year ago.

According to Ruenitz, negotiations for the deal have been going on between Ueshima and the Totos for at least two years. He said Ueshima doesn't see Puerto Rican coffee as an alternative to Jamaica's Blue Mountain brand (87% of which was wiped out by Hurricane Gilbert in 1988) but as another brand.

Ruenitz said the transaction has been endorsed by the U.S. Agricultural Trade Office in Tokyo, and that the New Orleans-based Southeastern United States Trade Association (SUSTA) will likely award several thousand dollars to promote the product in Japan. Nevertheless, said Ruenitz, "any money SUSTA provides is very small compared with that being spent by Ueshima. This is the most important aspect of Ueshima's participation. Since Ueshima is buying the coffee, it's their intent to have major promotion. If they're successful, we'll have much more business."
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Author:Luxner, Larry
Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1990
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