InfoAnda - Mexico coffee farmers shelter from risk behind hedges |

Pakistanis angry over detentions in Times Sq. case
Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They

Taiwan denies boycotting Australian film festival
Thursday, August 6, 2009

AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e

Merkel's support dips, regional ally resigns International
Thursday, September 3, 2009

By Sarah Marsh and Noah Barkin

BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German

Minister seeks closure of anti-Berlusconi websites
Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who

Asian markets mixed after Wall Street rally
Wednesday, March 18, 2009

By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an

Sudan police disperse student protest with teargas | | 17 June 2012
Orphanage director looks into Eclipse | Entertainment | | 11 March 2009
For actor Roger Moore his word is his Bond | Entertainment | | 21 November 2008

HP dabbling with Windows 7 tablet computer | 22 July 2010

Forum Views () Forum Replies ()

Read more with google mobile : Mexico coffee farmers shelter from risk behind hedges |

Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Home Business Business Home Economy Technology Media Small Business Green Business Legal Deals Earnings Summits Business Video Markets Markets Home U.S. Markets European Markets Asian Markets Global Market Data Indices M&A Stocks Bonds Currencies Commodities Futures Funds peHUB World World Home U.S. Brazil China Euro Zone Japan Mexico Russia Afghan Journal Africa Journal India Insight Global News Journal Pakistan: Now or Never? World Video Politics Politics Home Front Row Washington Politics Video Technology Technology Home MediaFile Science Tech Video Opinion Opinion Home Chrystia Freeland Felix Salmon Breakingviews George Chen Bernd Debusmann Gregg Easterbrook James Pethokoukis James Saft John Wasik Christopher Whalen Ian Bremmer Mohamed El-Erian Lawrence Summers The Great Debate Unstructured Finance Newsmaker MuniLand Money Money Home Analyst Research Global Investing MuniLand Reuters Money Alerts Watchlist Portfolio Stock Screener Fund Screener Personal Finance Video Life & Culture Health Sports Arts Faithworld Business Traveler Left Field Entertainment Oddly Enough Lifestyle Video Pictures Pictures Home Reuters Photographers Full Focus Video Article Comments (0) Slideshow Full Focus Editor's choice A selection of our top photos from the past 24 hours. Full Article Follow Reuters Facebook Twitter RSS YouTube Read Astronomers discover planet made of diamond 2:26pm EDT Two charged with starting largest ever Arizona wildfire 24 Aug 2011 China media dismiss Pentagon "cock-and-bull" report 5:17am EDT Gaddafi nearly captured on Wednesday: report 8:43am EDT Russian crash clouds Int'l Space Station operations 11:29am EDT Discussed 271 GM says bankruptcy excuses it from Impala repairs 163 Obama accuses Congress of holding back U.S. recovery 116 U.S. oil speculative data released by Senator, sparking ire Watched Lockheed Martin presents airship of the future Thu, Aug 18 2011 Buenos Aires Fashion week sizzles Mon, Aug 22 2011 Steve Jobs resigns as CEO of Apple Wed, Aug 24 2011 Mexico coffee farmers shelter from risk behind hedges Tweet Share this Email Print Related News Special report: The perils of Paulson Wed, Aug 10 2011 UPDATE 3-Japan rice futures jump in debut on radiation concern Mon, Aug 8 2011 Dunkin' Brands shares soar in stock market debut Wed, Jul 27 2011 Analysis & Opinion A world without Steve Jobs Investing and your brain: Why we hit the panic button Related Topics World » Mexico » 1 of 4. A man stores sacks of pepper corns in a warehouse where coffee and peppercorns are co-op processed in Cuetzalan August 17, 2011. Credit: Reuters/Imelda Medina By Mica Rosenberg and Lorena Segura CUETZALAN, Mexico | Thu Aug 25, 2011 4:07pm EDT CUETZALAN, Mexico (Reuters) - For generations, indigenous coffee farmers in the lush mountains east of Mexico's capital sold their beans to middlemen without understanding the workings of the international coffee market. Now some of those same farmers, tired of falling victim to wild price swings, have taken the unique step of learning the complexities of derivatives trading to hedge their risk. Native Nahuatl speakers from more than 60 small villages growing coffee on tiny plots around the picturesque town of Cuetzalan pool their cash to buy options contracts to cover their production, around 6,900 60-kg bags of coffee a year. "We lived through the coffee crisis when prices were high and then fell dramatically, and many people went bankrupt," said Alejandro Martinez, president of the Maseual Xicaualis cooperative, or 'Indigenous Power' in Nahuatl. "Now we have these new tools," said Martinez, wearing a traditional, hand-embroidered belt and boots in the warehouse off a winding mountain road in the state of Puebla where the co-op processes coffee and peppercorns . Turning to the market, which has in the past brought them ruin as well as profits, as an insurance policy could be a new model for small producers facing volatility in world markets. Ever since coffee prices collapsed at the beginning of the decade, small cooperatives have tried various ways to protect themselves, like selling "fair trade" beans or negotiating deals directly with roasters, but few have jumped to hedging. The co-op here exports organic beans directly to Japan, Europe and the United States and also sells conventional coffee. With hedging, it now estimates its crop size and locks down a favorable price to sell at a later date on New York's ICE Futures exchange, protecting itself from a price slump. When the harvest is over, if the group still has inventories or picked more than expected, the farmers can buy options to sell at a higher price if the market is rising. A communal budget affords them around eight contracts, each with 37,500 pounds of coffee. Martinez and other members track market trends on Internet pages from a small office built with hand-tied bamboo beams to decide when to make trades. SOPHISTICATED MODEL It was a long process -- more than a year of training with Mexican firm GAMAA Derivatives -- to enter a world dominated by large hedge funds, speculators and multinational importers. "At first it seemed like talking to rural, indigenous farmers about hedging was like talking about aliens," said Leonardo Duran, an agronomist and advisor to the cooperative. "We would ask, 'what do you understand about the market in New York?' and they would associate it with the market where they go to buy and sell their goods," he said. "It was unthinkable that you could negotiate a price for something without having the physical product. They thought there were containers of coffee piled up (in New York)." But they got the hang of it and now GAMAA operates on the cooperative's behalf for a fee. The group has started hedging against swings in Mexico's peso currency as well since they earn dollars or euros but pay costs in pesos. "Today It is not enough to just know what your parents knew about cultivating the land. Farmers need to know about finances," said Duran. Highly organized and disciplined, the co-op is part of a larger network of associations called Tosepan that groups 5,800 families and does everything from building bamboo furniture to running an eco-hotel to producing honey. "This example is quite sophisticated ... hopefully it can be copied in Africa," said Hans Bogaard, head of agribusiness at Rabo Development, part of Dutch lender Rabobank Group. "In bigger commodity crops its very usual to see big farmers dealing directly with Chicago, like soybean farmers in Argentina and Brazil, also in the US," he said, but he noted that it was rare in the coffee industry. More than 60 percent of Mexico's rural population is poor and the World Bank has looked at commodities price risk management as a way of combating rural poverty. Farmers in the world's No. 1 coffee producer Brazil tend to rely on traders at their huge cooperatives to take care of hedging on their behalf, while many forward sell their produce in exchange for loans that tide them over until harvest time. The local exchange, the BM&FBovespa, also offers a "mini" futures contract covering just 10 60-kg bags, providing a means of protection for small, independent growers, but they are not widely used. GOVERNMENT TOO SLOW The co-op's experiment sprang out of an innovative government program, Aserca, that subsidizes producers and food and livestock companies to hedge risk. The government operates on behalf of the participants, bundling dozens of contracts for corn, wheat, sorghum and other products and creating a buzz on grains trading floors in Chicago when it makes a big move. Mexico's finance ministry also uses financial instruments to hedge oil exports, protecting public finances from sharp drops in the price of oil since crude revenues fund more than a third of the federal budget. But the Tosepan group felt the government program moved too slowly. Aserca trades only during certain windows and pays at the end of the season even if prices move before then. With GAMAA's help, the co-op avoided disaster when prices fell in 2009. They hedged at $150 per 100-lb lot of coffee and were safe when prices dropped to $115, Martinez said. New York's benchmark arabica coffee contract is now more than double the level two years ago but is still volatile with prices falling around 20 percent since a peak in May. Aserca hopes to eventually wean all producers off the government subsidies and wants more farmers to start operating on their own. The co-op is being eyed as a model to follow. "The goal is for all the members to have information to make decisions," Duran said. "So their decisions have power." (Additional reporting by Peter Murphy in Brasilia; Editing by Kieran Murray and Alden Bentley) World Mexico Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above. Social Stream (What's this?) Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Mobile Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Contact Us Advertise With Us Connect with Reuters Twitter Facebook LinkedIn RSS Newsletters About Privacy Policy Terms of Use Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

Other News on Friday, 26 August 2011
Libyan rebels won't reveal identities of Younes's killers |
U.N. to allow release of $1.5 billion frozen Libya funds |
After months of rising, coffee prices lower
Putin accuses opposition of selling MP seats |
NBA players to descend on Vegas for summer league at Impact Academy
Bahrain's prime minster issues call to action against corruption
Cadillac Escalade remains America`s most stolen vehicle
Mark and Donnie Wahlberg to open burger joint
At least 5 aftershocks from Tuesday's earthquake shake the D.C. area
Pitbull responds to Lindsay Lohan lawsuit, says lyrics were misinterpreted
U.N. issues warning over growing numbers of stateless people
AU famine meet raises $351 million but figure questioned |
U.S. relations with Bolivia tumble as accusations are exchanged
Irene batters Bahamas, NC island residents fleeing
Nigerian Islamist sect attacks kill 12: police |
Mexico coffee farmers shelter from risk behind hedges |
AOL shares up as AOL confirms bankers on retainer |
Verizon buys CloudSwitch to boost Terremark |
Merriam-Webster dictionary adds tweet, bromance, fist bump |
Esther Gordy Edwards, founder of Motown Museum, dead at 91 |
Rihanna tweets down talk of sex tape |
Rapper DMX nabbed in Arizona again, this time for speeding |
Vera Farmiga, younger sister take on Higher Ground |
Rebels to govern from Tripoli as Gaddafi hunt goes on |
Italy says Libyan oil facilities not damaged at all |
Documents show Gaddafi tried to halt NATO: report |
Syrian forces kill 8, protesters hail Libya |
Casino attack in Mexico's Monterrey kills 53 |
Rahul Gandhi breaks silence over India corruption protests |
Japan PM to resign, successor race wide open |
China denounces U.S. report, defends military upgrade |
Fat camp shows China battling the bulge |
Analysis: Survival steers Myanmar generals towards reform |
Investors sanguine as Apple's Jobs steps aside |
Analysis: Apple's supporting cast steps into the limelight |
Analysis: Where does Jobs stand among America's iconic CEOs? |
Taiwan's Asustek Q2 net up 8 percent, sees Q3 shipments up |
Analysis: LG on mute as mobile phone losses mount |
Groupon's CEO lashes out at critics ahead of IPO |
Tumblr close to raising up to $100 million: report |
WikiLeaks publishes tens of thousands more cables |
At least 18 die in car bomb attack on Nigeria U.N. HQ |
Minka Kelly, Derek Jeter split after dating three years
Teen shot in Chile anti-Pinera protest dies |
Jackie Evancho, Nicki Minaj to perform on 'America's Got Talent'
China charges Tibetan monks with homicide in self-immolation |
Kim Kardashian cuts honeymoon short to film new season of reality show
Japanese company asks 2,700 staff to get same haircut
UN: More Somalis fleeing to Yemen
It was wrong to free Lockerbie bomber: residents |
HIV response at a crossroads in Asia Pacific
53 dead after arson attack on Mexican casino
Gaddafi forces killed prisoners, says Amnesty |
Demo Hassan, "For 40 years, food aid has been routine"
U.S. durable goods orders rise slightly in July
Car bomb rips UN Nigeria office; at least 18 dead, 60 injured
Analysis: Where does Jobs stand among America's iconic CEOs? |
Google chairman Schmidt to woo TV elite |
Michael Jackson crowned king of MTV VMAs: poll |
Star-studded Venice festival gets movie mojo back |
UK TV channel plans phone hacking comedy |
Greece at new risk of being pushed off euro
Bodies of missing Tenn. mom, Jo Ann Bain, and daughter found
Female Breasts Are Bigger Than Ever
AMD Trinity Accelerated Processing Units Now in Volume Production
The Avengers (2012 film), made the second biggest opening- and single-day gross of all-time
AMD to Start Production of piledriver
Ivy Bridge Quad-Core, Four-Thread Desktop CPUs
Islamists Protest Lady Gaga's Concert in Indonesia
Japan Successfully Broadcasts an 8K Signal Over the Air
ECB boosts loans to 1 trillion Euro to stop credit crunch
Egypt : Mohammed Morsi won with 52 percent
What do you call 100,000 Frenchmen with their hands up
AMD Launches AMD Embedded R-Series APU Platform
Fed Should not Ignore Emerging Market Crisis
Fed casts shadow over India, emerging markets
Why are Chinese tourists so rude? A few insights

USD EUR - 1 year graph	VPN on MacOSX	BlogMeter 1.01