Armajaro Trading to Extend Higher Cocoa Price Plan to Coffee

Armajaro Trading to Extend Higher Cocoa Price Plan to Coffee

September 7, 2009 – Armajaro Trading, which introduced a “voluntary premium” on the price it charges buyers of its cocoa to help increase output, will extend the plan to coffee, said Nicko Debenham, director for traceability and sustainability.

The company, whose clients include Lindt & Spruengli AG and Kraft Foods Co., charges an additional $30 on each metric ton of cocoa and uses the funds to help growers through programs from schools to malaria eradication, Debenham said. The plan is implemented by the not-for-profit Source Trust organization set up by London-based Armajaro and the Ghana Cocoa Marketing Co.

“We intend to introduce a similar plan early next year in Vietnam to help growers of coffee there and then take it to Brazil and Indonesia,” Debenham said in a phone interview today. “We are very keen to encourage participation of roasters and will finalize in the New Year after discussions with them.”

Armajaro envisages the same $30 a ton increase for coffee, he said.

Coffee production in Vietnam will be 18.35 million bags in the 2009-10 crop year starting next month, down from a record 19.67 million bags a year earlier, according to the U.S. Department of Agriculture. A bag weighs 60 kilograms (132 pounds). The price of robusta beans has declined 4.9 percent this year and averages $1,510 a ton in the period.

Vietnam is the world’s second-largest grower of coffee after Brazil and the biggest producer of the robusta variety.

Armajaro and buyers agreed to the higher rate for cocoa and unveiled the plan first in Ghana three years ago and introduced it to the Ivory Coast and Nigeria last year, according to Debenham. The company plans to extend it to Ecuador and Indonesia this year, he said.

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