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  • QA 055
    Question:
    Why is damaged or contaminated coffee sold 'for salvage'?
    Background:
    We read that coffee damaged by the hurricane Katrina disaster in New Orleans that was declared unfit is to be sold for 'salvage'. What does this mean considering all the warnings producers constantly face concerning contamination of coffee, the dangers of mould etc?
    Asked by:
    Exporter - Indonesia
     
    Answer:

    The word 'salvage' means to recover, to rescue, to retrieve and restore goods or property damaged by for example a shipwreck, a fire or a natural disaster.

    In this particular case certain coffees were exposed to rain and/or floodwater, rendering them unacceptable for the intended purpose. As all the coffee trade knows roasters routinely reject coffees that are inferior to what has been bought, whether damage related or due to differences in quality. This is because roasters only process coffees that conform to specification - anything different is rejected. This also means roasters will not engage in any 'salvage' exercise. But others can and do: there are 'salvage buyers' at practically all import destinations that will buy coffee that is different from the original condition.

    Rainwater damage and floodwater damage are not the same. Rainwater damage (sometimes also called sweet water damage) may only extend to the upper layers of a stack of bags, an individual bag or parts of bags. Such damage can often be minimized by reconditioning, i.e. removing (skimming) those beans that show water damage from the sound coffee. Where the final receiver, for example a roaster, refuses to deal with such reconditioning then this is where the salvage buyer comes in. Salvage is normal commercial practice that aims at mitigating or minimizing loss. It is appreciated by insurance companies and approved also by institutions such as the US Food and Drug Administration.

    Of course one certainly has to differentiate between coffee stored in bags and that stored in bulk but in principle it is possible to separate the good from the bad for both systems. The 'good part' may still be suitable for roasting by someone provided the retrievable beans have been separated from those that are beyond 'salvage', i.e. those that have become unfit for human consumption. Floodwater damaged coffee on the other hand is fully destroyed and no reconditioning takes place - even if just part of a bag is affected. And if coffee is damaged in its entirety, than such coffee is dumped as well - particularly so in the US.


    Underwriters require damaged goods to be assessed for loss before deciding on their disposal and settlement of claims. Because of coffee's specialised nature the simplest way is to survey the goods and then to invite a number of recognised firms, specialising in the retrieval or salvage of damaged coffee, to inspect the goods and submit offers to purchase them. Under the terms of the insurance policy the owner of the goods is obliged to cooperate in the mitigation of loss, a principle that applies worldwide so also in producing countries.

    It should also be noted that sorting out flood damage in a large coffee warehouse that was fully affected is a major job that takes weeks, also because the wetted bags may/do burst after swelling, causing stacks to become instable and lean over or collapse. Such sorting exercises can be carried out by a warehouseman or, one can also sell the whole problem to a salvage buyer and leave it to him to sort it out.

    We would not agree that the practice of 'salvage' detracts from the food security concerns your question refers to. As said there are three possibilities: some coffee is not damaged at all; some is damaged by rainwater and may be retrievable; some is damaged by floodwater or other substances and is not retrievable. The formation of mould too can well be limited to a restricted area, i.e. the part that is removed. In a major flooding though one may find a situation where not only part of the coffee is wetted but also where for a prolonged period of time the entire atmosphere is too moist and damp. This may certainly create problems since, mould apart, also bad odours may be present that taint the coffee and render it useless. In any event, salvaged coffee will be subjected to rigorous inspection by food security agencies before being allowed back into the food chain.

    Finally, the word 'salvage' has quite a wide meaning but not in the sense that effectively damaged coffee is made 'sound' again. Once mould has grown, or floodwater contaminated with unknown substances has affected the coffee, this is simply not possible…

    Posted 02 November 2005

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    QA 002