An update on 2013/14 crop year sentiments in the wake of a continual decline in the market price of coffee, Vietnam's lucky escape from super typhoon Haiyan, and the recent Let's Talk Roya event in El Salvador.
As the market price of coffee continues to fall, the New York market dipping to a seven year low last week, statistics from the latest ICO market report for October 2013 show a 4.3 percent decrease in the average ICO composite indicator price from the previous month and its lowest level since March 2009. The ICO has shown honesty in its assessment of current coffee prices, stating that the situation could potentially be incredibly damaging for farmers who rely on coffee as a livelihood, and gone as far as to compare the circumstances to that of the beginning of the coffee crisis in the early 2000s . Other market evaluators have reinforced this sentiment, reporting that many origins are already trading below cost of production
The dismal market conditions have prompted Brazilian coffee producers to call on the government for help in supporting the industry, and are considering taking protest measures in action is not taken. Grower’s cooperatives Cooparaiso and Coocafe have created an 18-step ‘Coffee Pact’ outlining a series of proposals to combat low prices and cut farmers debt. The groups are urging other Brazilian producers to sign the pact and have given the government a deadline of November 14 to pledge some industry support or face unspecified protest actions.
Conversely, the industry attitude in Colombia is optimistic. The origin is producing yields that have not been seen since the country was hit by negative weather conditions following the El Nino and La Nina weather phenomena’s five years ago. They have also seen an increase in coffee farming areas that have achieved certification by one of the many sustainability programs present within the industry. Approximately 45 percent of Colombia’s coffee farms are now certified by one of the programs, including Rainforest Alliance, UTZ Certified, Fairtrade and 4C’s. In addition to this trend towards producing certified sustainable coffee, the origin continues to align their focus towards the specialty coffee market with approximately 1.25 million bags of the country’s 2013 exports relating to specialty coffee, according to the Colombian Coffee Federation.
After causing devastating destruction throughout the Phillipines, super typhoon Haiyan has passed through the northern coastline of Vietnam without causing serious damage. The typhoon bought strong winds and plenty of rain to the area, however there has been no reported damage to the coffee regions. After a few days of disruption due to the extreme weather, harvesting is now back to normal and expected to peak at the end of the month, weather permitting.
Sustainable Harvest’s ‘Let’s Talk Roya’ event took place in El Salvador last week, directly following the annual ‘Let’s Talk Coffee’ conference. The event saw the gathering of the world’s top agronomists and industry professionals in an open event aimed at enhancing the understanding and awareness of Roya and its impact on the coffee industry from crop to cup, while planning for future outbreaks. During the event, Green Mountain Coffee Roasters, Inc; Multilateral Investment Fund; Skoll Foundation and Root Capital announced a $7 million funding initiative to finance the replacement of diseased coffee trees affected by leaf rust by providing short-term credit, financial management training, climate-smart agronomic assistance and household-level income diversification. The pledge will allow Root Capital, the non-profit organisation instigating the initiative, to provide resilience investments and financial management training to 50 agricultural enterprises representing 40,000 farmers, directly benefiting approximately 200,000 family members in farming communities in Central America. It is hoped that the initiative will act as a blueprint for other pledges of support and investment. Overall, the event was applauded as a constructive forum for engagement and discussion on a pertinent topic facing our industry.
Ref: ICONA Café, I&M Smith, SWDCC, Comunicaffe, and FC Stone.