*TOP NEWS* Latin America

Reuters: [2008-05-07 00:01:00]

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> America Movil to pay Ecuador $480 mln to operate   [nN06478021] 
> Subcontractors start resuming Codelco operations   [nN06455759] 
> Border coffee roaster helps keep migrants in Mexico[nN06482102] 
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Keywords: *TOP NEWS* Latin America 
    

*TOP NEWS* Mexico and Central America

Reuters: [2008-05-06 23:51:00]

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> Mexico consumer confidence index falls in April     [nN06508446] 
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> Mexico peso hurt by credit jitters; stocks gain     [nN06281471] 
> Border coffee roaster helps keep migrants in Mexico [nN06482102] 
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Border coffee roaster helps keep migrants in Mexico

Reuters: [2008-05-06 23:04:00]

By Tim Gaynor

AGUA PRIETA, Mexico, May 6 (Reuters) - A small coffee roaster on the U.S.-Mexico border is tapping into the growing fair-trade market, convincing Mexican farmers to stay home and grow beans instead of abandoning their crops to migrate north.

When coffee prices crashed in the late 1990s because of an excess in global supplies, many coffee farmers simply left their lands to search for jobs in the United States or in the booming manufacturing sector on the Mexico side of the border.

But with coffee prices recovering in recent years and increased border monitoring making life harder for migrants, some have decided to return to their towns and take advantage of new niche markets for high-quality organic blends.

The Cafe Justo roaster in the border town of Agua Prieta, just south of Douglas, Arizona, is using techniques pioneered by export factories -- or maquiladoras -- to distribute coffee from the southern state of Chiapas to U.S. consumers.

After the coffee crisis, coffee farmers from the village of Salvador Urbina in Chiapas were looking for ways to keep more of the profits whittled away by roasters and retailers.

They formed the Cafe Justo cooperative near the U.S. border in 2002 with the help of a priest and a former factory manager and began to process their own beans, marketing their brand directly to socially conscious consumers.

"We wanted the people who had left because of low coffee prices to go back to their communities," said coffee farmer Daniel Cifuentes, who left Chiapas a decade ago and now runs the Cafe Justo's office in Agua Prieta.

With a $20,000 loan from a local church, Cafe Justo, which means Just Coffee, bought their first coffee roaster and began toasting the shade-grown arabica, marago and robusta beans shipped up from Chiapas on the same bus line that for years had brought migrants north.

Drawing on the expertise of former export-assembly plant manager Tommy Bassett, the cooperative set up a distribution network using UPS <UPS.N> to export coffee to church groups in the United States on demand.

"The only way they will get it as fresh is if they get from the roaster direct," said Rev. Mark Adams, speaking at the project's U.S. office in Douglas.

MORE BUSINESS

The popularity of fair-trade products, which claim to more directly benefit producers, has helped Cafe Justo grow their business five-fold.

In 2003, the cooperative exported the equivalent of 101 96-pound (44-kg) sacks of toasted, ground coffee, generating income $72,000 to help two dozen families in the village near Mexico's southern border with Guatemala.

Five years on, sales have grown to 485 sacks of grounds generating revenues of $367,000 to support 40 families.

With the profits the co-op has built processing facilities and a water purification plant in the village and set up a pension plan and health insurance for members.

Cafe Justo is now working to recreate the successful model by setting up roasting and export operations in the border towns of Tijuana and Ciudad Juarez.

"What the farmers have started creating is the most effective response to the immediate crisis of immigration that I know of," said Adams. "People are going back because there are possibilities," he said. (Editing by Marguerita Choy) ((tim.gaynor@thomsonreuters.com ; +52 81 8345 7553; Reuters Messaging: noel.randewich@thompsonreuters.com@reuters.net)) Keywords: MEXICO COFFEE/

Mexico peso hurt by credit jitters; stocks gain

Reuters: [2008-05-06 23:04:00]

(Adds quotes, closing prices, details)

MEXICO CITY, May 6 (Reuters) - Mexico's peso weakened on Tuesday amid renewed Wall Street credit jitters, while local stocks gained, led by telecommunications bellwether America Movil.

The peso <MXN=> <MEX01> weakened nearly 0.20 percent at the official central bank close to 10.4995 per dollar while the benchmark IPC stock index <.MXX> gained 0.85 percent to 31,223.42 points.

Fannie Mae, the largest provider of U.S. home financing, reported its third straight quarterly loss and forecast further falls in home prices and continued problems in the mortgage market.

But reassuring comments from Fannie Mae executives about the company's stability helped stocks in New York recover from early losses.

But peso traders in Mexico said the news stirred fears that the worst may not be over for the credit crisis, curbing investor appetite for riskier emerging market assets and serving as a pretext to take profits after the peso's recent gains.

"There is still a worry that the subprime (mortgage) issue is still present and keeps causing damage to the financial sector," said Alejandro Martinez, a fixed-income and currency strategist at HSBC in Mexico City.

Traders also said investors were ruling out the possibility of further interest rate cuts in the United States.

Mexico's peso has gained around 4 percent since the beginning of the year as the spread between the U.S. target interest rate and Mexico's key rate widened to 5.5 percent.

"If you don't have the expectation that the spread could widen further, you don't have that additional attraction," Martinez said.

The U.S. Federal Reserve cut its target rate last week for the seventh time since September in a bid to prop up the stumbling economy, but it signaled that its may pause with its rate cutting cycle.

Also last week, Mexico's central bank revised upward its inflation outlook, which analysts have interpreted as meaning the bank will keep interest rates on hold for some time.

In debt trading, the government's benchmark 10-year peso bond <MX10YT=RR> rose 0.067 of a point in price to 98.914, pushing its yield down 1 basis points to 7.91 percent.

In stock trading, shares of America Movil <AMXL.MX>, Latin America's biggest cell phone operator and the heaviest weighted stock on the IPC, gained 0.72 percent to 30.89 pesos. Its New York-traded shares <AMX.N> edged up 0.44 percent to $58.87.

"The stock was unfairly punished after its first-quarter earnings report, and people are realizing it is cheap," said Gerardo Roman, head of equity trading at Actinver brokerage in Mexico City.

HSBC on Tuesday cut the price target for America Movil's New York shares to $82 from $91, but kept its rating unchanged at "overweight."

Top retailer Walmex <WALMEXV.MX> added 1.56 percent to 44.22 pesos.

Shares of Cemex <CMXCPO.MX> gained 1.79 percent to 30.73 pesos while its New York traded stock <CX.N> added 4.34 percent to $29.10. (Reporting by Michael O'Boyle; editing by Gary Crosse) ((michael.oboyle@reuters.com; +5255-5282-7160; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MARKETS MEXICO/

Mexico consumer confidence index falls in April

Reuters: [2008-05-06 21:33:00]

MEXICO CITY, May 6 (Reuters) - Mexico's consumer confidence index <MXCONC=ECI> fell to 97.8 points in April from 102.7 in March, the government said on Tuesday. (Reporting by Jason Lange) ((jason.lange@reuters.com; +5255-5282-7153; Reuters Messaging: jason.lange.reuters.com@reuters.net)) Keywords: MEXICO ECONOMY/