Running out of coffee?

You would think so if you consider that leaf rust and other diseases are rapidly adapting to new variables of weather.  But it is interesting to learn from the marketplace when all these predictions are taking place. Look at Colombia! Who would think that they would recover from such a loss due to that terrible fungus back in 2008 when production was reduced to seven million bags.

Roya

Coffee scarcity is one of those, but why is it that still there is enough coffee as to keep coffee prices so low? Brazil, Tanzania and Ethiopia reported record crops for the 2012-2013 according to the International Coffee Organization. Central American production reduced its output by 15%, but still it was not enough to shake the market because those record crops are covering it. So yes, higher volume still drives the market.

Where is the scarcity indeed?  “Other mild, Central America”.  Some specialty buyers are keeping  options open for other origins (article by Reuters) which means looking up to those bumper crops that could eventually offer those missing beans despite if they are similar or not in taste. The Cup of Excellence Program, which just finished its Central American and Mexican auctions, sold above last year’s record average per pound (over $9.92) because it is a main source for small, micro-roasters and medium size importers that perhaps would not be able to get that product without such platform that facilitates the search.  Except for Guatemalan and Mexico, which sold higher volume of coffee at higher price, all of those countries sold less coffee at higher prices.

As a mechanism of defense, the plant eliminates the infected leaves.  Photosynthesis is stopped and thus the maturation of the cherries is uneven. In the photo, a healthy plant still to harvest 2012-2013 crop.

Estimates for 2013-2014 state that even less coffee will be available from these origins. Despite the certainty of this fact, competitive growers will always be ready to take the challenges of the market.  Perhaps with less coffee, but with focus on quality because they have learned through the years, and they have experienced, that quality is “the only way” to surviving the business adversity that implies weather variables, higher volumes, low prices and aggressive market competitors. After all, that is the core of the business and the history of coffee.

Are you securing those quality sources? Is it possible to do so? Growers who understand that profit is key for investment and maintenance of the farm even if it means to wait for three years until it flourishes again are the ones that remain. Those growers will survive to give the fight until there is no cherries left on the plant even if the market hits lowest just like in 1999. We have seen them survive.

On the other hand, they will also have to stick to their business strategies to supply those buyers that consistently have traded based on a “fair direct trade” practices instead on prices fluctuations. This will be possible just if they have segmented their crop and identified what product fits what niche market.  Difficult times, but also big opportunities for those that know the business.


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