Brazil experienced a record coffee crop in 2010-2011 but production is expected to decrease in 2011-2012 due to normal cyclical changes. Colombian production is slowly recovering from disasters in 2008-2009 and 2009-2010. Overall global demand for coffee is projected to continue growing steadily at around 2% per year, driven primarily by emerging markets. While production has recently balanced with demand, a surplus may develop by the end of the 2011-2012 crop year.

1. Nov 2011

2. Record crop in 10/11, but 11/12 will be smaller due to cyclical down-turn in Brazil Brazil-10/11 58.2 m. bags, 11/12 46.9 m. bags *- provisional

3. Brazil coffee exports remain at a high level

4. Colombian production is slowly recovering from disasters in 08/09 & 09/10 * Preliminary

5. Vietnam production remains at a high level, but is expected to fall in 10/11 * Preliminary .

6. Indonesia production is dipping due to excess rainfall during La Niña * Preliminary . Crop year start in April

7. Demand is growing Projection 1990-2000: 1.3% 2000-10: 2.1% 2010-20: 1.7%

8. Growth is coming from Emerging Markets Projection

9. Production balanced with demand in last 2 coffee years, surplus develops at end of 11/12

10. Total Demand Growth by Region per cent per annum

11. Robusta Demand Growth by Region per cent per annum

12. Natural Demand Growth by Region per cent per annum

13. Robusta share tends to be higher in growing regions *- includes India & N. Africa

14. Naturals not quite so well placed to take advantage of growth markets *- includes India & N. Africa

15. Demand for robusta has also been strong Projection 2000-10: 3.63% 2010-20: 2.3%

16. Increasing share of Robustas & Naturals in blend in importing countries

17. World Blend: Increasing use of Naturals in developed coffee markets of EU

18. Arabica share tends to be higher in developed countries Shares based on green imports 2005-07

19. The Changing Blend: As income increases the share of arabica increases. Finland

20. Rainforest Alliance has highest sales growth Average growth rate of 51% p.a since 2005 *- Projection

21. Utz sales growth is averaging 39% per annum *- Projection

22. Mild differentials have been almost as volatile as futures prices Basis FOB Prompt Shipment

23. And apparent loss of Brazil competitiveness Basis FOB Prompt Shipment

24. ICE Stocks are at an extremely levels To End Oct 2011

25. LIFFE Certified stocks have started to increase in 2011 To End Oct 2011