Trade Development: Virginia, Wilmington (DE)

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Virginia’s flourishing coffee business received a boost July 14, when the port was certified as a delivery point on the ICE Futures U.S. Coffee "C"® futures contract. Chiquita Brands will continue to use Delaware’s Port of Wilmington as its mid-Atlantic distribution hub for at the least the next five years and potentially until 2029 under a newly signed agreement with the Diamond State Port Corporation.

Port of Virginia Certified as Delivery Point for Coffee Futures

Virginia’s flourishing coffee roasting, packaging and handling business received a boost July 14, when the port was certified as a delivery point on the ICE Futures U.S. Coffee "C"® futures contract.

The designation allows owners of exchange-graded coffee imports coming to Virginia and stored in local, exchange-licensed warehouses to be delivered against the coffee "C" futures contract.

"This exchange port status is very positive news for The Port of Virginia and the growth of the region’s industry surrounding this commodity," said John F. Reinhart, CEO and executive director of the Virginia Port Authority. "The port’s coffee volumes the first five months of 2014 have increased by 20 percent when compared with 2013 and by 56 percent when compared with 2012 (on an annual basis). We believe this designation presents some very good opportunities for growth over the long-term."

ICE operates the coffee "C" futures contract, the world benchmark for Arabica coffee. That benchmark price is built upon the physical delivery of exchange-grade green beans, from 19 foreign countries of origin to a licensed warehouse located in ports in the U.S. and Europe, with pre-set premiums/discounts for ports and growths.

Prior to the addition of Virginia, the only domestic delivery points for coffee that could be traded in the "C" futures contract were New York, Miami, New Orleans and Houston.

Locally, the beans are stored at RPM Warehousing & Transportation in Norfolk and Continental Terminals Inc., in Chesapeake.

The designation was supported by research data provided by the Green Coffee Association (GCA) and the port. The research, based on 2013 statistics, showed that Virginia ranked fifth in the United States with 8 percent of total GCA stocks. Moreover, the port provided data showing significant volumes of coffee imports from several key points of origin in each of the past four years, including Colombia, Brazil, Guatemala, Peru, Honduras and Mexico. The exchange determined that the volumes of C-style Arabica coffees moving through and stored in the Port of Virginia were sufficient to merit status as a delivery point.

Wilmington (DE): Diamond State Port Corporation & Chiquita Sign New Lease Agreement

The Diamond State Port Corporation (DSPC) and Chiquita Brands have reached an agreement by which Chiquita will continue to use the Port of Wilmington as its mid-Atlantic distribution hub for the next five years. The agreement includes two 5-year lease renewal options, potentially extending Chiquita’s relationship with the Delaware port until 2029.

Chiquita container operations at the Port of Wilmington.
Photo/Port of Wilmington

"The Port of Wilmington is an important destination for Chiquita and our customers," said Mario Pacheco, Chiquita’s senior vice president, global logistics. "We are pleased that we have reached an agreement that will enable us to continue to call Wilmington home for many years to come. Wilmington is a great partner for Chiquita and we look forward to growing our business together in the years ahead."

In 1988, Chiquita consolidated its mid-Atlantic supply chain operations at the Port of Wilmington, where it leases 28.7 acres and where its vessels make approximately 52 calls annually. Chiquita operates a fully containerized service between Central America and Wilmington, discharging bananas, pineapples and other tropical fruit and vegetables, and loading forest products, used automobiles and general cargo for the back haul voyage.

"We are extremely pleased that Chiquita has decided to sign a new lease with the port and continue our long and "fruitful" relationship," said DSPC Executive Director Gene Bailey. "Chiquita is a most important customer and responsible for hundreds of jobs and the resultant and significant economic impact to our port, state and region. We are grateful to the governor and the General Assembly for the support which has allowed us to make those capital equipment acquisitions and infrastructure improvements needed to retain Chiquita’s business despite a very competitive environment."