Faced with the recent fall below 1 USD/lb of the international price of coffee in the New York Stock Exchange, the Steering Committee of the Colombian Coffee Growers Federation (FNC) calls on the national government and the global industry to adopt urgent measures in favor of Colombian coffee growers and the 25 million families who make a living by producing coffee worldwide.
The FNC Steering Committee insisted on the need for real commitment by all the actors in the chain to participate equally and co-responsiblyin determining the reference price, in such a way that it responds to the hard work and dedication of coffee producers, the most fragile link in the chain.
This is a global price crisis that drastically affects Colombian coffee growers and so has a strong impact on the national economic growth and on decline of the social conditions of over 3.5 million coffee growers in the country.
One cannot continue to allow actors foreign to the industry such as investment funds to be who, in an unbridled desire for profit, determine the price of such an important commodity that is the livelihood of 25 million producing families in the world.
In this context, the Steering Committee members reaffirmed that the coffee institutional framework will remain committed to working without losing the north: to achieve greater profitability for Colombian producers.
The coffee crop renewal program must be kept now more than ever.We will continue working on reducing costs and looking for harvesting alternatives.And efforts will be redoubled in specialty and high quality coffee programs, as they translate into better prices for producers and shield them from the ups and downs of the international price.
National Coffee Growers Committee is called urgently
On the other hand, the Steering Committee, headed by its president, Camilo Restrepo Osorio, announced that they will convene an urgent National Coffee Growers Committee on Tuesday 29, a governing bodythat is led by the 15 delegates of the Departmental Committees and the Ministers of Finance, Agriculture and Commerce, and the Director of the National Planning Department.
During this meeting, it is expected to discuss, among other issues,the importance of a Price Stabilization Fund, the possibility of implementing a program of direct price support anda coffee retention program.
With the Agriculture Ministry in particular, resources will be requested to alleviate producers’ debts, continue with support for renewal of coffee plantations, and look for alternatives in fertilizers.
On the international arena,and with its characteristic renewed leadership, the FNC will continue emphasizing the need for greater industry commitment to a better income for producers,as it is the only thing that guarantees continuity of coffee supply and sustainability of the industry as a whole.
In the following days, the FNC CEO will hold a meeting with Brazil’s coffee leaders to address this difficult price situation.In addition, during the meeting of the International Coffee Organization (OIC) in September, the CEO and the coffee representatives that will attend will take advantage of this stage to once again show the indolence of the industry towards coffee producers, meetings following the recent one held with Central American producers inAnacafé,in Guatemala.
Evolution of international and domestic price
- The international reference price for mild coffee (Contract C) has been systematicallyfalling during 22 months,from 160 dollar cents per pound in November 2016 to about 108 in July 2018.
- This situation has intensified this month, with a 22% drop since August-17, recording an average 105 cents per pound and a low of 97.25.Since August 2006, Contract C did not fall below the dollar per pound.
- The domestic base purchase price(made up of the Contract C price, the quality premium and the exchange rate) has fallen about 19% in the last year.This means that producers have received on average about 166,000 pesos less per load, falling from COP 851,000 in August 2017 to COP 685,000 on August 21, 2018.
As a consequence of the fall in domestic coffee price, by 2018 the coffee crop value is estimated to be1.5 trillion pesos lessthan that recorded in 2017 (7.5 trillion pesos), which will have a negative economic impact on the coffee regions and the country as a whole.
The exchange rate has cushioned the falling external price of coffee,preventing its impact on the domestic price from being much higher.However, the volatility of this variable and its close correlation to behavior of oil prices is a source of instability for coffee growers’ income.
The FNC and its federated representatives will continue working for well-being of coffee growers.
