Daily consumption of cups of coffee has fallen unusually worldwide over the past year. The push from expanding markets like China and India has had little effect, scientists say. A pile of bad news for Colombian exports, the third largest producer in the world and a discreet protagonist of the industry alongside the mighty Brazil and Vietnam. For this reason, the concerns of coffee farmers have been exacerbated by the droughts announced as a result of the El Niño climate phenomenon, posing an additional challenge to the future of a product that is part of the country’s identity and has been the great symbol for decades. the economy.
Former Colombian Coffee Farmers Association President Felipe Robayo is one of the most skeptical voices about the future of consumption. Contrary to some positive forecasts released by the weakened and somewhat discredited International Coffee Organization, it is important to remember that global purchases have been declining for just over a year. For example, according to calculations by the Dutch Rabobank, coffee imports to the European Union and the United Kingdom fell by 13% in the second quarter of this year, while in the United States there was an 11% year-on-year decline.
The bank said this was the biggest drop in the 15 years it has been collecting data on the sector. This is a situation linked to the increase in coffee prices in supermarkets around the world, a situation that has recently begun to change. As interest rates rose, Robayo noted, the international industry found it necessary to stop buying coffee. A slowdown that he describes as “drastic” and highlights the impact on prices.
Given this increase in value, consumers have recently turned their backs on a product they don’t consider essential. The context of high inflation and the devaluation of the Colombian peso against the dollar has also contributed to changing priorities. Albert Scalla, vice president of American financial firm StoneX, adds that successive droughts and frosts in Brazil in 2021 and 2022 “pushed up prices” and hit consumption.
Juan Camilo Restrepo, former commercial director of the National Federation of Coffee Growers, recognizes that the climatic anomalies that have always posed a risk to coffee cultivation have today increased to such an extent that they are likely to force a redrawing of the map: “The rains are more intense. This affects the grain during harvest as it falls before ripening. Periods of drought, which in turn are more severe, prevent the grain itself from ripening. And hailstorms and storms have been a lifelong problem.” Her biggest concern, however, is the urgency of increasing Colombia’s production volumes, which have risen in recent years from an average of 14 million bags of coffee per year to almost 11 million.
The coffee industry, argues Albert Scalla, needs to address a rather hidden problem in the more than 60 producing countries: the lack of effective and sustainable campaigns to promote consumption. “In a country like Colombia, you arrive at the airport, walk onto the street and the first thing you see is advertising for big breweries or soft drinks. At some point there was a show called Toma Café. But it ended. Restoring this is no longer a necessity, but an urgency,” he argues.
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Another aspect that influences the future of Colombian coffee cultivation is the harvest that has just ended in Brazil, which, according to all calculations, reached 64 million 60-kilo bags. The neighboring country is the great hegemon of global industry and its performance sets standards. “Prices depend on the weather and Brazil. Job. Because they had such strong numbers and the next one is expected to be a super harvest of 70 million bags, there are already signs of a decline in international prices,” explains Scalla.
The report from the Netherlands’ Rabobank, a key institution in the world of agricultural financing, indicates that grain prices in the United States have also begun to fall due to lower consumer confidence and high interest rates. News that does not represent a clear horizon for Colombia. The price difference for Colombian grain, a measure that determines the added value of its quality relative to the average price on the exchange in the futures market, fell from a maximum of 82 cents to just 18. The price of the pound at the New York Stock Exchange was once at 2 Dollar, today it is 1.52. And the internal price of the cargo, for its part, has increased from 2,400,000 Colombian pesos to 1,000,000.
For Albert Scalla, the future of Colombian coffee, whose production is focused on the Arabica variety – which accounts for 56% of world production – largely depends on the renewal of the coffee park, which has a production cycle of five years. There have been some setbacks that translate into less grain reflected. Also the so-called “generational change”, a sensitive issue due to the aging of the peasantry and the movement of the youngest to the cities. The Colombian coffee farm is becoming increasingly empty as the business does not bring any benefits to the farmers. A final layer of complexity for a product considered the best “mild coffee” in the world.
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