Monday, January 25, 2010

Starbucks buying less Costa Rica coffee -growers

*Costa Rican growers report lower sales to Starbucks
*Producers suspect U.S. coffee giant trimming inventories

San Jose, Costa Rica (Reuters) - U.S. coffee giant Starbucks has reduced its purchases of Costa Rican coffee this year, the head of the Central American nation's coffee association said on Monday.

The company, which is known for paying top-dollar for high-quality coffee, may be buying less to reduce its inventories, Ronald Peters, the executive director of Icafe, said in an interview with Reuters.

"(Starbucks) has bought less coffee in Costa Rica this year," said Peters.

"Perhaps because they have delayed purchases, Costa Rican producers have also committed to supplying other buyers."

Peters was unable to say by how much Starbucks buying had declined.

Half of Costa Rican coffee exports go to the United States, a share that Peters said has been maintained despite slowed sales to Starbucks.

Starbucks' U.S. operations have struggled due to the recession but the firm posted its first quarterly rise in same-store sales in two years last week.

Guatemalan growers reported in December that Starbucks had been slow to buy coffee and speculated at the time the delay was an attempt to secure lower prices.

Prices for Central American coffee have surged amid shortfalls in harvests from major producer Colombia. Colombia expects its crop will recover this season as a crop rejuvenation program starts to pay dividends.

Starbucks confirmed in a statement that it had made purchases for the 2009/10 growing season from Guatemala and Costa Rica along with other Latin American nations but declined to provide a forecast of its purchasing activity for competitive reasons.

The company said it buys about 75 percent of its coffee in Latin America and is normally one of the leading buyers of Costa Rican coffee.

Peters said Costa Rican producers have found buyers willing to pay a "satisfactory" price of $1.40 per lb in New York despite the slowdown in purchases by Starbucks. (Writing by Robert Campbell; Editing by Lisa Shumaker)

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