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January 27, 2009

Angola to spend $150 million to revive coffee sector

By Henrique Almeida

Angola, once a top coffee producer, will invest $150 million in four years to relaunch its coffee sector as world market prices gradually recover from recent lows, the head of the country's Coffee Institute said. Angola, which exports less than five percent of its 1970s record of 200,000 tonnes of coffee per year, expects output to increase to 50,000 tonnes a year by 2013 on the back of a plan to train farmers and modernise coffee plants across the nation.

"We will train coffee producers, provide them with vehicles, modern roasting and grinding machines and other tools to help revive Angola's once prosperous coffee sector," said Joao Neto, the head of Angola's Coffee Institute. "Our target is to reconquer our spot among the world's top coffee producers."

Towards the end of colonial rule, Angola was self-sufficient in food, a major exporter of sisal, cotton and the fourth largest producer of coffee in the world. But the country's coffee fields were destroyed or abandoned during a 27-year civil war that took place soon after Angola's independence from Portugal in 1975. Coffee farms were gradually replaced with basic food crops like cassava and maize.

However, Neto said Angolans were now waking up to the smell of coffee as they realized the sector's strong potential for growth and high profit margins. "Three years ago we only had one coffee exporter in Angola, today there are seven of them. All the coffee produced here is immediately sold in the market or shipped to other countries," he said.

Neto noted that exporters were buying coffee in the form of beans for $4 a kg, four times more than the amount originally paid by middlemen to local coffee producers in the southwestern African nation. "That same amount of coffee can be sold in international markets for at least $8," he said, adding that Angola was famous for its robusta coffee -- the type that is used in most instant coffee.

Coffee prices fell sharply last year as economic gloom deepened but have slowly begun to recover in the last few weeks, boosted by a tighter supply outlook for 2009/10. A global coffee shortfall is seen in 2009/10 with output in No.1 producer Brazil set to fall and demand expected to hold up despite the economic downturn, the International Coffee Organization (ICO) said.

Angola is expected to export around 17,000 tonnes of coffee in 2009, up from 12,000 in the previous year. Neto predicted a rise in coffee exports of around 30 percent a year would soon turn Angola into one of the world's top coffee producers."If we export 50,000 tonnes of coffee by 2013, pretty soon we will reach 200,000 tonnes. That is roughly the same amount we were exporting towards the end of colonial era."

The Guardian

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