BOGOTA, Colombia – According to USDA’s new Gain Report, Colombia produced 10.7 million 60-kg bags green bean equivalent (GBE) green bean equivalent in MY 2023/23, a 9.3% decrease over the previous year, down from a previous official estimate of 11.3 million bags. In market year (MY) 2023/2024, Colombia’s coffee production is expected to recover to 11.5 million bags.
In the first quarter of 2024, expected dryer conditions and improved luminosity on account of the El Niño phenomenon will support improved flowering of the main coffee harvest of the second half of 2024.
However, coffee production growth remains modest as extreme drought conditions may impact both yield and harvest quality due to persistent coffee borer outbreaks that drastically cause economic loss and diminished cup quality.
The Colombian Institute of Meteorology indicates that El Niño will emerge in the last quarter of 2023 and into early 2024, with forecasted higher temperatures and a 10-30 percent precipitation reduction from average rainfall in some regions.
In market year 2022/2023, Post revises coffee production lower to 10.7 million bags GBE, 5.3 percent lower from the 11.3 million bag estimate.
Excessive rainfall above historical norms, and excessive cloud cover from the La Niña weather phenomena lowered yields. Additionally, reduced fertilizer application due to high global fertilizer prices have hindered the sector. Despite these challenges, the overall impact on coffee production was not as intense compared to La Niña phenomenon events.
In market years 2011/2012 and 2012/2013, coffee production suffered during severe El Niña weather phenomenon, whereas production dropped as rust-resistant coffee plantings were less than 35 percent of total coffee area.
In the last two MYs when the La Niña phenomenon occurred, Colombia’s coffee production dropped but to a lesser extent compared to MYs 2011/2013, as more than 86 percent of Colombia’s coffee area are now planted with disease-resistant varieties.
Since late 2022, Colombian coffee domestic prices trended downward to a two-year low, driven by low international prices and modest revaluation of the Colombian peso resulting from inflation. Despite easing fertilizer costs, the cost of production remains high.
Elevated labor costs, combined with lower expected earnings from decreasing prices, are pressurizing farmer incomes. To seek greater farmgate prices, Colombian coffee producers look to produce high-quality (specialty grade) utilizing sustainable certification models to receive improved market price differentials.
Most Colombian coffee production is Arabica, but since 2017, Agrosavia, the Colombian Agricultural Research Corporation, has researched the feasibility of Robusta production.
Robusta genetics were introduced in 2018 and have completed their quarantine evaluation by Colombia’s sanitary authority. Agrosavia is currently testing on certain micro lots to move to Robusta semi-commercial production.
Colombia has a potential growing area of 80,000 Ha for Robusta cultivation with an estimated 3.2 million bags GBE production.
According to Post sources, establishing Robusta production is intended to substitute coffee (mostly soluble) imports and expand coffee crops to non-traditional producing areas. Colombia will face cultivation challenges in Robusta without undermining the quality and premium of Colombian coffee.
Consumption in Colombia
In the current MY, Post estimates marginal changes to Colombia’s domestic coffee consumption, increasing 1.4 percent from year-on-year to 2.2 million bags green bean equivalent. Economic downturn and continuing high inflation are likely to hinder a more substantial consumption growth in the near term.
Post revises MY 2022/2023 coffee consumption upward to 2.2 million bags GBE, a 2.3 percent increase from the official estimate, as coffee consumption stabilized due to increased imports. Despite growing interest in specialty coffee, most Colombian households prefer soluble coffee and low-cost coffee mixes.
Fedecafe continues to promote domestic, premium coffee as Colombia’s per capita coffee consumption is estimated at 2.8 kg, significantly lower than other coffee producing countries.
Trade
Post revises Colombia’s MY 2023/2024 coffee export figure to 12 million bags GBE, representing a 12 percent increase year-on-year. The increase in trade is driven by a projected recovery in production.
For MY 2022/23, Post revises coffee exports lower to 10.7 million bags GBE, reflecting market realities. Tightening supplies have resulted in lower exports in the current market year.
Colombian coffee is exported to more than 40 countries. The United States remains as the major export destination, with more than 40 percent market share, followed by the European Union, Japan, and Canada.
In the last MY (2022/2023), green coffee represented 89 percent of total coffee exports, followed by soluble coffee (9 percent) and roasted coffee (2 percent).
For market year 2023/2024, Post revises Colombia’s coffee imports 9.6 percent higher to 2.5 million bags. Coffee imports will remain high to supply local demand as Colombian coffee production continues to prioritize export markets.
Coffee imports for MY 2022/2023 are estimated lower to 2.3 million bags GBE, a 9 percent decrease to reflect market realities. In 2018, Brazil became the top coffee import supplier for Colombia, and in MY 2022/2023 accounted for nearly 80 percent of market share. Imports are primarily used to meet the demand for soluble and lesser quality coffees in the market. Colombia primarily imports green coffee (91 percent), followed by soluble coffee (8 percent), and roasted coffee (1 percent).
Stocks
Market year 2023/2024 ending stocks are revised higher to 620,000 bags GBE given a potential recovery in coffee production due to favorable weather conditions. There are no government or Fedecafe policies that support high volumes of coffee carry-over stocks.
