The world's foremost farming body, and coffee experts, added warnings over the threat to agricultural trade from the eurozone credit crisis, as banks pull back on lending to save capital.

The International Coffee Organization warned that the credit tightness, which economists see as being exacerbated by the fears of sovereign default within the eurozone, represented a threat to a world coffee industry based in developing countries such as Brazil and Vietnam.

"Credit restrictions and the lack of liquidity caused by the world financial and economic crisis, combined with higher production costs, could lead to a reduction in supplies," the London-based ICO, an intergovernmental group, said.

A fall in supplies could "in turn lead to a slackening in the current growth rate of consumption", which has averaged 2.5% over the last decade, testing production capacity, and leading to a succession of years of declining inventories.

'Shore up their capital'

The comments came hours after the US Department of Agriculture, widely regarded as the most authoritative farming authority, blamed tight credit for weak soybean imports by European Union, whose purchase commitments from the US had "collapsed" by 75% so far in 2011-12.

While the decline also represented a switch by livestock farmers from soymeal to a "more inexpensive supply of feed wheat", and the better margins available to crushers from processing sunflowerseed, "demand for all livestock feeds is being dampened by the current economic upheaval in the European Union", the USDA said.

"Forced by a declining value of their government bond holdings, European banks have needed to shore up their capital reserves by tightening lending.

"Rising borrowing costs are slowing activity there for all types of processing and trading enterprises, including those involved in agricultural products."

'Quadrupling of fees'

The warnings come days after Uralkali, the Russian fertilizer giant, blamed the eurozone debt crisis for a slowdown in EU potash sales, highlighting "a concern that farmers might encounter certain difficulties securing credit facilities for business development".

Meanwhile, Oil World, the influential analysis group, warned last month over troubles among oilseed traders in obtaining their "normal" credit facilities.

And a London bank source told Agrimoney.com last week that they had heard of a "quadrupling of expected fees on one financing deal, albeit off a low base".

"Capital is getting a lot tighter, especially in the last three months," the source added, noting that Europe's banks, closest to the eurozone crisis, "are probably the key players in trade finance".

The tightness in credit has been blamed for accelerating price declines in agricultural commodity futures over the last three months, besides being noted in other sectors too, such as mining.