Colombia wants coffee countries to buy Starbucks

BOGOTA Sun Nov 23, 2008 12:03pm EST

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BOGOTA Nov 23 (Reuters) - Coffee-growing nations should buy Starbucks and create their own distribution chain as the U.S. company grapples with slowing sales, Colombia's coffee federation chief said in an interview published on Sunday.

Gabriel Silva, director of the National Federation of Coffee Growers, also told El Tiempo newspaper that Colombia will accumulate four times the coffee stocks it did a year ago to build inventories and shore up coffee prices.

Starbucks (SBUX.O), famous for its pricey lattes, has fallen victim to the U.S. economic downturn as sales growth slows in the United States and the Seattle-based chain plans to close 600 U.S. stores.

"I am going to propose to my colleagues that we chip in to buy Starbucks. This will reinforce our fight to defend coffee origins," Silva said. "What I am proposing is not so difficult. With $200 million to $300 million, the coffee world could control Starbucks."

Prices for commodities from oil to metals have slumped on fears a global recession will cut into demand. But coffee producers believe the bean is better placed to rebound because market fundamentals will support prices.

ICE Futures U.S. March arabica KCH9 closed 0.60 cent lower at $1.1075 per pound on Friday.

"We are going to participate more aggressively in the market to build stocks in the next few months ... the idea is to accumulate coffee to support the price. It is not so difficult as there is a world deficit in coffee," Silva said.

"To impact the market, we need to accumulate around 200,000 sacks," he said. "Until we have a renumerative price, it is better to store coffee than export at a low price."

Colombia, the world's No. 1 exporter and top producer of high-quality arabica beans, said recently rains had trimmed its production for this year to around 12 million sacks, though it still expects to output to rise to 17 million bags by 2014.

Silva said exports for this year should be around 11.2 million sacks.

He said around half of the 860,000 hectares (2.1 million acres) of coffee-producing land in Colombia had been renewed and he expected all producing areas to be renewed in five years.

Silva said the federation would have 170 stores for its branded Juan Valdez product this year -- 135 in Colombia and 35 overseas with a target of 300 stores by 2010. (Reporting by Patrick Markey in Bogota, editing by Maureen Bavdek)

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