Due To Coffee Price Drop, The FNC Board Of Directors Makes An Urgent Call To The National Government And The Global Coffee Industry

Faced with the recent drop of the international coffee price in the ICE Futures Exchange below 1 USD/lb, the board of directors of the National Federation of Coffee Growers of Colombia (FNC) calls on the national government and insists that the global industry adopt urgent measures in favor of Colombian coffee growers and the 25 million producing families that live off the bean around the world.

The Board of directors requested the National Government to work immediately with the Federation to find structural solutions to the difficult situation of coffee growers of Colombia which directly impacts the national economy and the social conditions of more than 500 thousand coffee families and more than 3.5 million Colombians whose livelihood depends on coffee.

The coffee growers expressed their concern about the low prices that they are receiving, especially when 45% of the national harvest is collected in the first half of the year.

The members of the board – representing coffee growers from all over the country- request the government for price support and incentives for the renewal of coffee plantations, as well to seek alternatives in the topic of fertilization, a key activity to keep coffee plantations healthy and productive.

The coffee growers state that the current situation puts them against the wall in order to comply with their current credit obligations, as well as to purchase fertilizer, input whose value has been increasing.

The board of the FNC insisted on the need for a real commitment on the part of all the actors in the coffee chain to participate with equity and co-responsibility in determining a reference price, which covers production costs and the hard work and dedication of coffee producers (the most fragile link in the chain).

On the international front, FNC will continue with renewed leadership to emphasize the need for greater industry commitment to improving the income of the producers, as it is the only thing that guarantees the continuity of the coffee supply and sustainability of the industry as a whole.

The coffee growers thank the Government of President Ivan Duque for placing the concerns of the sector on the international agenda of the country.

Next month, the General Manager of the FNC and representatives of the coffee growers will attend the session of the Council of the International Coffee Organization (ICO) and will take advantage of this scenario to once again highlight the indolence of the industry with the producers of coffee of the world.

Evolution of the international and domestic price

  • The international benchmark price for soft coffees (ICE C Contract) completes 27 months systematically falling, which has taken it from US$1.60 per pound in November, 2016 to US$1.00 on February 19, 2019
  • The price erosion intensified since September, 2018, dropping 26% versus September 2017, registering an average of 98 cents per pound and a minimum of 92 cents
  • Since August, 2006, the C contract had not broken the one dollar per pound level
  • The domestic base purchase price (composed of the C Contract price, the Colombian quality differential and the Peso/Dollar exchange rate) has fallen by 4.2% in the first two months of the year and 16% in the last two years. This means that Colombian coffee producers have lost an average about 163 thousand pesos per load, going from $859 thousand in February, 2017 to $696 thousand on February 19, 2019
  • As a result of the coffee domestic price drop, by 2018 coffee farmers stopped receiving about $1,300 billion pesos, compared to the value registered in 2017 ($7,500 billion pesos), which has a negative economic impact in the coffee regions and for the country as a whole
  • The exchange rate has partially cushioned the fall of the external price of coffee, preventing its impact on the domestic price from being far worse. However, the volatility of this variable and its close correlation with the behavior of the oil price is a source of instability for the coffee income

Miembros del Comité Directivo

José Eliecer Sierra Tejada
Eugenio Vélez Uribe
Juan Camilo Villazón Tafur
Uber Bustos Ramírez
Jesús Armando Benavides Portilla
Carlos Alberto Cardona Cardona
Héctor Santos Galvis
Camilo Restrepo Osorio
José Alirio Barreto Buitrago
Danilo Reinaldo Vivas Ramos
Javier Bohórquez Bohórquez
Javier Mauricio Tovar Casas
Armando Amaya Álvarez
Luis Miguel Ramírez Colorado
Olivo Rodríguez Díaz

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