Coffee is a remarkable product. Like wine it involves agricultural and industrial processes. It is complex too in the varieties of possible production and processing systems and its chemical composition, including compounds with measurable effects on the human body. For this reason scientific research on coffee is of the greatest importance and has resulted both in an increased understanding of the effects of coffee consumption and advances in key areas such as plant breeding, cultivation methods and processing technology.

I am delighted to lend the support of the International Coffee Organization to this 20th ASIC Conference. It is an unparalleled opportunity for scientists working in coffee to disseminate their findings and discuss issues with friends and co-workers. The ICO has provided consistent support to ASIC in the past and has encouraged scientific research for many years. In 1980 the ICO Promotion Fund allocated a million dollars to assist in financing research in the area of coffee and health. In 1988 the Fund agreed to finance a Public Relation programme for coffee in cooperation with EUCA, the European Coffee Roaster's Association, which led to the formation of ISIC, which today plays such an important role in funding research. And it is with the support of ISIC that the ICO has been able to embark on the current Positively Coffee Programmes, designed to disseminate information on the positive health effects of coffee drinking to the public and now especially to the health care professionals.

Research is normally undertaken in a context, whether it is to develop resistance to disease, improve quality or investigate the pharmacological effects of particular compounds. It is my role however to inform you of the wider context of current conditions affecting the world coffee economy, which ultimately makes the difference between prosperity and hardship for millions of coffee growers and their families worldwide.

As you are aware the main problem for producers over the last five years has been, one of low world prices caused by an excess of supply over demand. To illustrate, the ICO composite indicator price, which had remained under the old ICO quota system at around 180 US cents per lb in the 1980s has been under 70 cents since April 2000 and was around 6 cents early last week (4 October)

A recent study sponsored by the ICO and funded by the European Commission analysed coffee farm profitability in the 2002/03 coffee year in 8 arabica and 4 robusta producing countries using various production systems. The conclusions were that few coffee producers are able to cover their operating costs, let alone total costs. To take India as a case in point all grower categories using traditional production systems showed losses.

This situation has been recognized by the United Nations as posing threats to the achievement of the Millennium development goals and a setback to the HIPC (Highly Indebted Poor Countries) initiative. We at the ICO have documented for many countries alarming increases in poverty and social problems.

In 2003, the total value of exports of all forms of coffee was estimated at US$9.58 billion of which US$5.58 billion is attributed to exporting countries for total exports of 85.79 million bags and US$4 billion to re-exports of 27.49 million by importing countries, showing the effects of value added by processing. Again it should be recalled that exporting country exports were valued at over 10 billion dollars annually in the 1980s.

Essentially the imbalance in the market was caused by excessive new planting of coffee in the mid 1990s following a price rise caused by a frost in Brazilian coffee areas in 1994. Subsequently Brazil has been able to maintain high levels of production with the help of a continued depreciation of the local currency against the dollar while Vietnam's production has also increased substantially, mainly because production costs are very low as a result of high yields arising from intensive care of coffee trees coupled with substantial use of fertilizers.

The recent development of market fundamentals indicates a substantial reduction in world production during the crop year 2003/04 as 100.69 million bags is recorded compared to 121.94 millions in 2002/03. Production for the crop year 2004/05 is estimated at a level ranging between 112 and 114 million bags. For years ahead, I do not intend to engage in any long-term forecasts but there are indications that production for 2005/06 may be reduced as a result of the Brazilian biannual cycle which is likely to record a substantial decrease in production.

Nevertheless it is crucial to recognize that coffee producers have limited options and face a highly imperfect market. Not only are growers constrained by their investment in a perennial crop that takes at least three years before significant output is seen but ecological conditions in coffee areas often restrict the possibility of finding alternatives. Where alternative crops are technically feasible growers are often faced with barriers to market access, which further impede diversification.

A big concern is the demand side. World global consumption is estimated at 113.08 million bags from calendar year 2003 including domestic consumption of 27.87 million bags and 85.1 million in importing countries. Nevertheless, despite the low level of world coffee prices and a cut in retail prices in some importing countries, demand remains relatively stagnant and consumption in traditional importing countries show signs of having reached saturation point. Indeed, for the past ten years consumption per capita in many major importing countries has decreased, noticeably in Austria, Denmark, Finland, France, Germany, The Netherlands, Norway, Sweden, Switzerland, United Kingdom and USA.

It is noticeable that many of these countries traditionally value mild arabicas in their blends and evidence suggests that such coffees are being substituted in many cases by natural robustas.

Since an increase in consumption continues to be one of the ways of helping to restore a healthy balance between supply and demand, I have appealed to exporting countries to implement Programmes for promoting domestic consumption and to donor organizations to finance market development projects to stimulate demand. This is very much a market friendly strategy and I must confess to some disappointment with the response to the date of my appeals. However the European private sector is helping us in our Positively Coffee programme which is helping to disseminate important scientific evidence of the positive effects of coffee consumption and we have recently commissioned an important study giving practical guidelines to increase consumption in producing countries which we will disseminate shortly. Here it is worth remembering that domestic consumption not only helps the overall market balance but increases producer awareness of consumer demands, provides an alternative marketing outlet and stimulates local small and medium enterprises.

So to research my message is straightforward: the priority is to concentrate on areas which will encourage the long-term sustainability of coffee by improving quality, analyzing positive effects of consumption and reducing value not quantity.

The Technical programme of ASIC 2004 was structured into five major sessions viz., Coffee and Human Health, Coffee Chemistry, Coffee Processing, Biotechnology and Agronomy held from 11th to 15th


The technical programme of ASIC 2004 was structured into five major sessions viz., Coffee and Human Health, Coffee Chemistry, Coffee Processing, Biotechnology and Agronomy held from 11th to 15th October 2004. After the formal Inaugural lecture session on the forenoon of day one i.e. 11th October 2004, different technical sessions were programmed.

The technical session of Coffee and Human Health was held on the afternoon of 11th 2004. The sessions on Coffee Chemistry and Coffee Processing were held o12th and 13th October, respectively.

The Biotechnology session was held on 14th October while the last session on Agronomy was held on the afternoon of 14th and on 15th October 2004. In all, 84 oral presentations covering a wide range of subjects were made including seven plenary lectures by the invited experts.