Transparent Trade
ATLANTA, Ga.
Representatives of the Colombian Coffee Growers Federation (FNC) briefed the press on plans to bypass the coffee commodities market and establish a price floor of $1.50 per pound to ensure Colombian growers recover their cost of producing approximately 15% of the world’s coffee.
Roberto Vélez, c.e.o. of the 540,000 member FNC cooperative, said that “Colombian coffee growers cannot continue to be beggars.”
Coffee futures on the Intercontinental Exchange (ICE) fell to historic lows last fall and continue to hover around $1 per pound. “At these price levels, coffee farming is not sustainable,” Vélez told reporters.
Vélez explained that the New York’s price is too closely tied to Brazilian coffee production now at record levels. Coffee is more expensive to produce in Central America and mountainous Colombia, where he estimates break even at $1.15 at farmgate and around $1.50 FOB.
Vélez traveled to the National Coffee Association’s annual conference to present his argument and seek support. He next travels to Africa and to the World Coffee Producers Forum in Brazil.
A formal proposal will emerge by September.
In the meantime, the Colombian government is providing $30 million in aid for shipments below a threshold of COP700,000 ($225). Farmers receive $9.60 for every 125 kilos shipment (two 60-kilo sacks) sold.
The government is also easing loan obligations and seeking ways to increase domestic consumption.