STiR coffee and tea magazine

STiR coffee and tea 13 Colombia's Coffee Prices Reach Record High as Output Declines Lower production helped push Colombia's coffee prices in February to the highest level in the country's history, at 2,213,333 Colombian pesos ($540) per 125-kilogram bag, according to Colombia's Coffee Growers Association (Fedecafe). Output fell significantly. Colombia's National Federation of Coffee Growers (FNC) released its revised production estimate for the 2021/22 marketing year, at 13.0 million bags green bean equivalent (GBE), a 5.8% drop from the previous forecast of 13.8 million bags and a 10% drop in production for the 12 months up to May 2022, compared to the preceding year. And that's down from the 2020/2021 crop, which was about 3% smaller than the 2019/2020 crop. As for 2022/23 marketing year, output is forecast to remain flat at 13 million bags GBE. Various factors have dragged on production. Along with excessive rain, this year's high costs of both fertilizer and labor have hampered growers' ability to maximize output, with the average cost of production increasing nearly 45% over the last 12 months. "The cost of materials and labor were two of the main factors affecting overall production cost for farmers," said researcher Oscar Hurtado Ramirez of Sucafina Specialty, a New York-based global distributor of green coffee. Colombia is highly dependent on imported simple fertiliz- ers. As prices for this input skyrocketed, growers likely reduced use of fertilizer, which hindered output. "We expect materials to remain expensive for the rest of the year," Hurtado said. He added that the availability of farm workers would be hard to predict now as the pandemic recedes. Then there's weather. Excessive rain and cloudiness from the La Niña weather phenomena during the first five months of 2022 had a serious impact on production. The Colombian Institute of Meteorology, IDEAM, published rainfall figures that ranged from 20–40% above historical averages in some coffee regions right up to July. Roberto Suescún a leading agronomist and grower from the major coffee region of Quindío, said that the region's second annual harvest, from August to the end of October, could yield 50% less than the average. "Climatic factors of recent years have had a great impact on flowering," he said. "This second harvest of 2022 compared to harvests of other years, I would think will decrease between 40% and 50%." As for labor costs, he explained that "when the harvest is very soft and spread out" like this one is expected to be, it means a longer harvesting period, which becomes very expensive. "If the harvest were more concentrated the picker would do better," he explained. This factor, along with the displacement of workers during and after the pandemic, means that harvesting the crop will cost double what it did before the pandemic. "In previous years harvesting a kilo of coffee paid a worker 450,000 or 500,000 pesos [roughly $100–110]. But with labor shortages and the longer harvesting period, it will cost 1,000,000 pesos this year." These factors, and the quality premium that the market recognizes in Colombian coffee, will likely result in continued high prices this year. Nevertheless, quality is expected to be very good because the wetter weather diminished infestation by coffee berry borers. "We expect to have more mid-grade coffees, and fewer low-grade coffees, due to reduced borer attacks," researcher Ramirez says. — Bethany Haye Coffee Farmers Face Doubling of Fertilizer Costs Russia's invasion of Ukraine pushed up fuel prices and disrupted supply chains. Now it is raising the cost of fertilizers, due to sanctions and interruptions in production and ship- ment. Coffee producers have to cope with a doubling of the cost of this critical input over the past year, according to World Bank data. Bloomberg Linea, the news service's online Latin American platform, reported that Nicaraguan coffee farmers reduced their purchases of fertilizer to make ends meet, while Guate- malan growers are diluting nutrients to stretch their supplies further. Costa Rican farmers hope that nutrients still left in the soil will suffice into the next planting season. The price spike reflects the critical roles that Russia and its neighbors play in supplying the world with fertilizer. Russia, together with Belarus, have approximately 40–55% of all deposits of phosphate and nitrogen, while Russia is the world's second-leading exporter of potash. These are the three raw materials needed to make compound fertilizers. Ukraine is also a big exporter of these products. And now there are concerns that the other major supplier, China, might restrict its exports of fertilizer due to Covid-relat- ed bottlenecks and concerns about maintaining sufficient domestic supplies. A 2019 study by Caravela Coffee found that fertilizers and other inputs account for 16–33% of production costs across seven coffee farming nations in Latin America. President of the National Coffee Federation of Colombia, Roberto Vélez, said his group is talking with Gustavo Petro's new government about getting more direct subsidies for coffee growers as well as investment to increase local production of fertilizers to reduce dependence on imports. But there is good news for farmers for the 2022–23 crop year. According to a study by the University of Illinois, fertilizer supplies for the western hemisphere appear to be adequate. — Bethany Haye Coffee Report

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