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Supply Chain

Colombia Launches Plan To Guarantee Sustainable Coffee Production

By Dayeeta Das
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Colombia Launches Plan To Guarantee Sustainable Coffee Production

Colombia, the world's top producer of washed arabica, has laid out what it called a road map to guarantee sustainable production of coffee for the next decade, with plans to increase quality and output.

As part of its "Plan 2030," the Andean country will also renovate more plantations and establish additional hedging options for times of low prices.

Colombia will finish 2019 with a harvest of around 14 million 60-kilogram sacks, during which it faced a crisis with a second consecutive year of low international coffee prices.

Coffee growers' income came in below costs of production of $225 per 125 kilograms of coffee for a good part of 2019, though in recent months income rose to $286 per 125 kilos, with a price of $1.24 per pound in the New York Stock Exchange.

"Let's take advantage of current coffee prices with futures," said president Ivan Duque at the closing of the annual congress of coffee growers. "Let's make sales via futures because in the current environment these prices are very good."

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Sustainability For Coffee Producers

The president said that sales of future harvests under current price conditions by using market instruments would guarantee sustainability for coffee producers and protect them from eventual price declines.

Duque also highlighted the creation of a $52 million fund intended to help coffee growers when prices fail to cover production costs and which will be shored up by saving during bonanzas.

Between 2010 and 2019 Colombia renovated more than 851,000 hectares of plantations, almost all of the land used to grow coffee. This renovation helped raise production to 20.5 sacks of coffee per hectare.

The president urged coffee producers to take advantage of the quality of Colombian coffee while reducing their production costs, maintaining crop fertilisation and looking for new markets.

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"Colombia has to go in to conquer more space so that our specialty coffees distinguish us, which will result in positive price trends and increasingly sophisticated markets," Duque said.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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