Reuters
Global coffee growers are being forced into poverty by low
international prices for the crop, farmers’ representatives said at an
international conference, warning the future of the industry is at risk.
Coffee futures are near a 13-year bottom, trading as low as 93.45 cents
per pound on Wednesday – far below the cost of production in most
countries.
In a statement from Nairobi where the International Coffee Organisation
is conducting a biannual meeting, the World Coffee Producers Forum said
New York market prices are “allowing the impoverishment of producers.”
“The current economic sustainability crisis of coffee producers needs to
be addressed immediately before it becomes a humanitarian crisis,” read
the statement, signed by producer associations from Colombia, Brazil,
Mexico, India, Vietnam, Central America as well as across Africa.
Futures have been weighed down by excess supplies, particularly from
Brazil, the world’s biggest and most efficient producer of arabica. The
country last year produced a near-record arabica crop and is widely
expected to produce another huge crop in the 2019-20 harvest year,
despite it being an off-year in the biennial production cycle.
The price environment has accelerated momentum to find pricing
alternatives. In January, a new platform for speciality coffee was
launched in the hopes of eventually delinking fine beans from the
futures price.
Colombia’s growers’ federation has suggested that high-quality producers
untether their prices from the New York market, though traders were
uncertain about the feasibility of the effort.
“An approach based on the principle of co-responsibility and total
transparency must be implemented to ensure that all the links of the
value chain are profitable and healthy,” the statement added.
Desperation among growers is such that some are switching to illegal
crops to make ends meet, a phenomenon already on display in Peru, whose
federation said some growers have abandoned their crop to grow coca, the
main ingredient in cocaine.
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