STiR coffee and tea magazine

10 STiR coffee and tea / Issue 2, 2019 (April / May) Up Front CHINA PAKISTAN AFGHANISTAN NEPAL INDIA Jammu and Kashmir Srinagar India withdrew most favored nation (MFN) trading status with Pakistan immediately following a suicide bombing that killed at least 40 national police and injured hundreds more. India then imposed a 200% duty on any goods imported from Pakistan. MFN agreements lower barriers to trade. The special trading status was first granted by India in 1996. Pakistan has not fully reciprocated during the intervening years but was softening its stance prior to the Feb. 14 incident. The two countries have thrice gone to war since the 1960s. The attack, followed by reprisals in the air and on the ground, left both nations bloodied and fearful of escalation. India and Pakistan each possess enough nuclear weapons to assure mutual self-destruction. India's tea exporters are publicly supporting government retaliation against Pakistan, a choice that has disrupted tea trade norms. Anshuman Kanoria, who chairs the Indian Tea Exporters' Association (ITEA), said members of the association are willing to sacrifice a market over principle. "The nation and the security of our forces and fellow countrymen come first and commerce is secondary," Kanoria explained. "We are not even thinking of trade with Pakistan now. We stand firmly behind the govern- ment and are waiting for direction from the government," he said. "Export- ers are not refusing shipment to Pakistan, but the mood among Indians is one of extreme anger. Exporters are adopting a wait and watch attitude and looking for direction from the Indian Government." The India Tea Association (ITA) supports restrictions. ITA chair Vivek Goenka told the Economic Times, the industry will look for other destinations like Egypt, the Middle East, and Russia to export Indian tea. Trade Retaliation Heightens Tensions in Pakistan-India Faceoff "What is more important is to protect our country from this sort of ghastly terror attack," he said. "Whenever there are tensions between the two countries, exports get impacted. We have seen that in the past also," said Goenka. Imposing retaliatory tariffs quickly led to a cut off in supply. Pakistan is the world's third largest tea importer and has turned to suppliers in Kenya and Sri Lanka but continues to receive tea from India via re-exporters in Dubai. Starbucks Anchors $400 Million Investment Fund Starbucks announced it will commit $100 million to Valor Equity Partners, which has established Valor Siren Ventures, a $400 million fund to explore new ideas and retail technologies "relevant to customers, inspiring to partners [employees], and meaningful to Starbucks business." Valor has long focused on consumer food and technology. Investments include restaurant chains WowBao, Fooda, and Eatsa as well as foodservice companies and Tesla. Kevin Johnson, president and c.e.o. of Starbucks, in a statement said "We are inspired by, and want to support the creative, entrepre- neurial businesses of tomorrow with whom we may explore commercial relationships down the road. This new partnership with Valor presents exciting opportunities, not only for these startups, but also for Starbucks, as we build an enduring company for decades to come," he said. "We believe that innovative ideas are fuel for the future, and we continue to build on this heritage inside our company across beverage, experiential retail, and our digital flywheel," he said. In recent years several food companies including Tyson Foods, General Mills, PepsiCo, and Kellogg's also contributed to venture funds. ATLANTA, Ga. Representatives of the Colombian Coffee Grow- ers Federation (FNC) briefed the press on plans to bypass the coffee commodities market and es- tablish a price floor of $1.50 per pound to ensure Colombian growers recover their cost of produc- ing approximately 15% of the world's coffee. Roberto Vélez, c.e.o. of the 540,000 member FNC cooperative, said that "Colombian coffee growers cannot continue to be beggars." Coffee futures on the Intercontinental Exchange (ICE) fell to historic lows last fall and continue to hover around $1 per pound. "At these price levels, coffee farming is not sustain- able," Vélez told reporters. Vélez explained that the New York's price is too closely tied to Brazilian coffee production now at record levels. Coffee is more expensive to produce in Central America and mountainous Colombia, where he estimates break even at $1.15 at farmgate and around $1.50 FOB. Vélez traveled to the National Coffee Associ- ation's annual conference to present his argument and seek support. He next travels to Africa and to the World Coffee Producers Forum in Brazil. A formal proposal will emerge by September. Roberto Vélez In the mean- time, the Colom- bian government is providing $30 million in aid for shipments below a threshold of COP700,000 ($225). Farmers receive $9.60 for every 125 kilos shipment (two 60-kilo sacks) sold. The government is also easing loan obliga- tions and seeking ways to increase domestic consumption. FNC Announces it Will Disengage from New York C-Market to Establish Coffee Price Floor

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