Coffee beans are more expensive on the world market than they have been in years. This is good news for producers in Latin America, for example.
HAMBURG taz | Gerardo de León can't help but smile optimistically when looking at the coffee prices on the stock exchanges every day. The 59-year-old coffee expert works for Fedecocagua, Guatemala's largest cooperative association with around 24,000 producers. De León had to wait a long time for coffee prices to rise. “The average price over the past thirty years has been $ 1.20 per pound of coffee. The production prices in Guatemala are currently 1.80 US dollars per pound of coffee. ”For too long, the aromatic beans have been sold for too long. An oversupply on the world market, but also speculation with the most important world market product after oil, is responsible for this, so de León.

That is over for now, because low harvest forecasts for the most important exporters, Brazil and Vietnam, ensure that coffee has become significantly scarcer worldwide and therefore also significantly more expensive.

This shows the price development on the trading centers in New York and London. Since July 20, 2021, the day when the low harvest forecasts rocked the coffee world, they have only known one direction: upwards. “On October 12, prices rose to 200 US cents per pound of coffee for the first time since 2014. For us that was positive news a few weeks before the start of the harvest. In this way, a number of contracts could be renegotiated. Our farmers will finally make a profit from the current harvest, ”says de León. On Wednesday the pound was about $ 2.30.

"Reduce debts" is the motto for many coffee farmers in Guatemala for the time being. In recent years, according to Fedecocagua, they have mostly been on the verge of bankruptcy because the world market price has been below their production costs. It was the same on July 20th. At $ 1.66 per pound sterling of 453.6 grams, it was below the profitability margin. Just because many farmers have long been Fair Trade or organic certified, they get better prices and, on top of that, they sell their best coffees to gourmet roasters. They put something on top for top quality. It is only because of this three-part sales strategy that the farmers can make ends meet.
"Local peculiarities such as the nutrient-rich volcanic soil of Acatenango ensure great demand, while climate change in other regions such as the Costa de Sur has caused coffee cultivation to decline," says de León, describing the difficult conditions. They have ensured that the production volume in Guatemala, the largest coffee producer in the region after Brazil and Colombia, has fallen from 4.2 million sacks of 69 kilograms to 3.8 million. This has consequences that are making themselves felt this year on the border with the United States. The number of migrants from Central America is exceptionally high and also a consequence of the coffee crisis in recent years, says de León.
Quite a few farmers have switched from coffee to growing avocados and sugar cane or raising cattle, because coffee cultivation is labor-intensive and has been rewarded for too long, as Andreas Felsen from the Hamburg roasting collective Quijote Kaffee says. In addition to the negative climatic effects in Brazil and Vietnam, these factors contribute to the collapse of the harvest. In addition, the low level of production could well continue because climate change is causing problems in all producing countries. In addition, there are bottlenecks in the availability of containers, which makes it difficult to transport the coffee sacks from the production countries to the most important consumer countries, the USA and EU countries.

That can change again in 2022 with good harvests in Brazil and Vietnam, but it doesn't have to. In any case, coffee plants need about three years to bear fruit, so that the coffee crisis could continue, so Felsen. “Basically, farmers need calculable prices, which is why smallholder organizations like Símbolo de pequeños productores are asking for a price of US $ 2.30 per pound of coffee.” That would be a price that would enable farmers to make a decent livelihood, says Felsen.

The purchase prices of Quijote coffee at 3.10 US dollars per pound of coffee are already well above the market price. In return, the directly importing roasting collective demands high quality from the partner cooperatives and finances the harvest in advance. This is rare in the coffee trade and also ensures delivery reliability - an important factor in times of scarce supply.

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