Colombia, home of Juan Valdez, now has to import coffee

February 27, 2013
February 27, 2013

Thousands of Colombian coffee growers protested for a third day against falling coffee prices and said they would continue the strike indefinitely.

In Colombia, the world’s fourth largest coffee exporter, the export of coffee beans is the main source of income for over half a million families. A typical coffee grower, or cafetero, farms with his family and is part of a cooperative allied with the Coffee Growers Federation, which sells beans in the country and abroad under the Juan Valdez brand.

But the industry  has been hurting from a combination of almost three years of heavy rain, crop disease, the rising strength of the Colombian peso (it rose 8% against the dollar last year). Most of all, falling global prices for coffee—down about 55% over the past two years (paywall)—have cut sharply into revenues.

The country’s output of coffee last year, 7.7 million 132-pound bags, was its lowest in three decades. In 2007, the country produced 12 million bags. Now, two out of every three cups of coffee brewed in Colombia is actually made with cheap beans imported from Peru or Ecuador.

What exactly the government can do for coffee growers isn’t clear. President Juan Manuel Santos Calderón says he will consider extending a subsidy started last summer of 60,000 pesos ($33) for every 125 kilograms of coffee. Yet prices for coffee will likely face more pressure this year. Global coffee production is expected to increase by 8.4%, to 146 million bags, boosted by production in Brazil, which could push prices down even further, according to the International Coffee Organization.

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