Coronavirus and Coffee in Colombia
Hills covered in coffee plants near Manizales, Colombia.
By Bethany Haye
As the world faces supply chain disruptions from governments’ measures to slow the spread of the coronavirus, Colombia’s coffee sector has not been spared. So far this year, exports have fallen by 14% to just over 3 million bags compared to almost 3.6 million bags exported in the first quarter of 2019. Figures for March show Colombian coffee exports fell 21%, to 903,000 60 kg bags compared to 1.1 million bags exported in March 2019. Yet at the same time, international demand is high as roasters try to prepare for a worsening shipping bottleneck, and consumers in importing countries have been hoarding packaged beans.
In the domestic market, the story is more nuanced. While out-of-home consumption has been derailed by the shuttering of cafés and restaurants and office and university canteens, the loss is being offset to some degree by increased in-home consumption. How much is not clear, as no data on the shift has been published yet, but coffee is being consumed massively at home during Colombia’s nationwide and quite restrictive stay-at-home orders, which began March 20th. Only grocery stores and banks remain open with reduced hours and access is limited to two days a week per person. Nearly all other businesses are closed. This continues into June, possibly longer, as the response is calibrated weekly and the rules adjusted.
Eateries do get some leeway, and chains like Starbucks and Tostao Café y Pan have kept a number of their outlets open as take-out only, as have some individually owned coffee shops and restaurants. As people are allowed outside daily to go to pharmacies or walk pets, there is still some foot traffic bringing in business. And food delivery apps like Uber Eats and Latin American platform Rappi are busier than ever. High compliance has kept Colombia’s infection and death rates low, with 6,000 recorded infections and 300 deaths.
But compliance has become a double-edged sword. Like everyone else, agricultural laborers were prohibited from moving from farm to farm or even leaving their homes. So, the labor shortage, a chronic problem for growers, just got worse right as the harvest period begins. Since the lockdown began, tens of thousands of Venezuelan refugees have “voluntarily” left the country, according to the Ministry of the Interior. Many of them were agricultural workers. And though growers have obtained some exceptions for the laborers that remain, areas that are infection-free so far do not want migrant laborers coming in or even passing through to get to the coffee regions.
To save this year’s harvest of 6.5 million bags of coffee that must be picked between April and June, which usually requires 135,000 workers, FNC has asked the government to allow exceptions to the lockdown for card-carrying members (those with the “coffee card” ID document). This, of course, does not help non-FNC growers, migrant farmworkers who move among various crops, or clandestines. It has also asked that, as a temporary measure, the minimum age for farm laborers be reduced from 18 to 16 years. And it requested some help from the Ministry of Health, such as online guides and in-person visits to the regions to provide information and instruction on anti-contagion safe practices, as well as masks, gloves, and sanitizer gel.
There is though one silver lining in the otherwise bleak economics of the pandemic in Colombia. As investors rush toward the safe haven of the dollar and the Colombian peso loses 25% against the US currency, Colombian producers have a reason to be cheerful: They get paid in dollars. So, even though the spot price is still ridiculously low, between $1.19 and $1.05 in April 2020, the same dollar amount now translates to 25-30% more Colombian cash for the grower.
And the silver lining may well continue. ICO’s benchmark C futures price was at $117.95 for July 2020, at $119.10 for September 2020, at $120.50 for December 2020 and at $122.05 for March 2021. The slow but steady price increase — the only one on commodities markets at the moment — indicates growing demand ahead. Colombia’s coffee sector is poised to help the whole country’s economy bounce back post-pandemic.