1. Coffee Outlook February 2003

2. Coffee Historical Background Coffee was 1 st Discovered in Ethiopia in the 6 th Century Coffee Drinking Begins to Spread in Europe in 1600 In 1727 Coffee Plant Was Smuggled into Brazil In Dec. 7 1881 Coffee Exchange Begun in NY 1906: First Withhold Scheme of Great Proportion

3. Brazilian Production 1929: Sao Paulo Coffee – Institute Runs Out of Money and Prices Fall to 8 cents 1930: Brazil Begins to Burn Excess Stocks 1944: Burning Stops After 78 Million Bags Have Been Destroyed

4. International Agreements 1958: Latin American Coffee Agreement 1966: World Stocks Reach 87 Million and Brazil Has 65 1989: International Coffee Organization 1993: ACPC Withholds Coffee 1994: Drought in Minas – Production Falls 1999:Brazilian Currency Devaluation

5. Brazils Coffee Production

6. Vietnams Coffee Production

7. Brazil Effect Pressuring Prices to the Detriment of World Producers Central America in Social Crisis Africa – 60/70% of Income from Rural Workers Increased Violence Reduction of Production in Other countries Increases Dependence Upon Brazil Result in Increase of Volume

8. Coffee Market World Coffee Production had a Increase of 125.1 Million Bags in 2002/2003 Increase of 12% Over the Previous Year Increase Due to Brazilian Production

9. World Stocks

10. Decline Export Revenue Export for Calendar 2002 Fell from 90.30 to 88.62 First Drop in Four Years: Brazil + 20.46%, Vietnam – 15.41%, Colombia + 3.32 %, Mexico/ Central America – 10.79%, Asia/ Oceania –11.19% Value for: 2002: $5.25 2001: $5.43 2000: $8.17 1997: $12.88

11. Overview Brazils Influence is Increasing in the Coffee Market for Better or Worse Winter Season in Brazil Will Be More Volatile Once Brazil Builds Stocks Historically, It Will Be Hard to Let Go Heightened Volatility During Brazil Weather Season