CHALLENGES AND OPPORTUNITIES FOR THE COFFEE SECTOR IN THE MIDST OF COVID-19

Coffee recovers profitability in the midst of the gray panorama that pervades most of the country’s economic sectors.

The harvest is already beginning and with it thousands of hopes and goals of around 556,000 Colombian families in the 22 coffee growing departments of the country(https://federaciondecafeteros.org/static/files/FNCCIFRAS2017.pdf).

Around 8.2 million bags, according to current figures of the National Federation of Coffee Growers of Colombia (FNCC), which become the livelihood of many peasant hands, coffee brands with the seal of quality that only Colombian Coffee has, and of many Colombian exporters that day by day are committed to take the best of our beans to the entire world.

The current devaluation of the peso in dollars, as well as the good quotation of coffee in the New York Stock Exchange are predominant and hopeful factors to glimpse a positive and attractive scenario for the Colombian coffee export business, thus becoming an opportunity in the midst of this gray panorama; a great opportunity in the midst of the crisis.

The average international coffee price on the stock exchange has presented an average behavior so far in 2020 of 111.4 US cents per pound, which is undoubtedly a very high price related to commitments and futures contracts of high demand of the precious bean. This added to the current exchange rate (TRM) of the Colombian Peso to U.S. Dollar that in the first days of May shows a behavior above $3.900 COP/USD and that so far this year has had an average of $3.635 in Q1 of 2020 as indicated by the statistics of the Bank of the Republic of Colombia (https://www.banrep.gov.co/es/estadisticas/trm).

Undoubtedly a great favorable environment for the sector summarized in: a high demand for coffee at international level, upward behavior of international indicators, beginning of the main harvest of the year in Colombia, high production costs in pesos, favoring of the TRM due to the devaluation of the Colombian peso and an environment of security in terms of regulatory, logistical and export procedures.

The FNCC has adopted favorable and conducive measures for COVID-19 in the export process, seeking to streamline procedures and essential documents for the export of coffee. Thus achieving optimal response times in documentary and inspection operations, and providing support to Colombian exporters in their role of quality assurance, with the same rigor that has allowed obtaining the Good Will of Colombian Arabica coffee to the world.

To continue growing, harvesting, processing and exporting our best coffee beans under the highest quality standards has always been the challenge for all the members of the Colombian coffee value chain. This, together with the possible increase in per capita coffee consumption in the local market in the midst of the current preventive isolation, has also been a great opportunity for coffee brands in our country. The trend and the ground gained in the minds of Colombian consumers to consume specialty coffees allows us to consolidate independent brands in the much desired local commercialization market.

The challenge will be to dynamize our value offer, to achieve sustainable models in the economic, social and environmental aspects and to incorporate strategies that allow us to integrate digital commercialization and traditional commercialization, to strengthen strategic alliances that will allow us to strengthen the coffee guild and accelerate the growth of the sector and of all the actors of the coffee production, commercialization and export chain.

In this way, we will achieve a responsible, sustainable and lasting coffee culture that will soon become once again the economic engine not only of the rural sector, but also the main economic engine of the country.

María Angélica Cifuentes

CEO-AmarellaCafé