Colombian coffee farmers strike over low coffee prices

Around 40,000 coffee growers in Colombia have attended marches and protests, with farmers around the country striking in reaction to low coffee prices and poor exchange rates.  “Indeed we have had a difficult few days,” Luis Fernando Samper, Chief Communications and Marketing Officer for the Colombian Coffee Growers Federation (FNC), told Global Coffee Review in an email on 28 February. “There are protesters concerned about lower coffee prices, which are the result of lower NY prices and a lower Colombian Peso/US dollar exchange rate. In fact, over the last four years the [Colombian Peso] has appreciated almost 45 per cent against the dollar, meaning producers have lost a significant amount of income in local currency whereas costs are indexed in local currency.” Samper said that the FNC has called for “dialogue and discussion” rather than strikes. He confirmed that around 40,000 growers are marching and protesting, while the other 520,000 have stayed at their farms. Global Coffee Review first reported in November 2012 that Colombian farmers were highly vulnerable to exchange rates and dropping prices, with South America's most appreciated currency. <Read full story here> Colombia's vulnerability to currency fluctuations has continued to be magnified by dropping prices for Colombian Milds. In the statement released on 27 February, International Coffee Organisation Executive Director Roberio Silva highlighted that the February ICO composite price for coffee fell to 131.39 US cents per pound, 28 per cent lower than in February 2012. The monthly average composite price for Colombian Milds in the same period fell the equivalent of 34 per cent.  “The current coffee prices situation is affecting producers all over the world and is a matter of concern for the ICO and the global coffee community,” said Silva in the statement. “This is a market situation that cannot be controlled by any single player in the market. Volatility in prices causes serious economic problems throughout the coffee supply chain, and affects over 120 million small farmers in more than 50 countries around the world, who rely on cash income from coffee and who have limited access to risk management instruments.”  The FNC represents over 500,000 small farmers in Colombia. On 8 October 2012, the FNC had announced a Price Protection Contract (CPP) to help farmers insure their risk against currency and price fluctuations. The  financial instrument was one of the first of its kind in a growing country, in allowing coffee growers to buy contracts to set a load price for the second, third and fourth month after the date they purchase the instrument. In the ICO statement, Silva highlighted the FNC as a “role model in producing countries”, helping to ensure sustainability and a better life for coffee growers in Colombia.  The FNC's Samper told Global Coffee Review on 28 February: “We are hoping the government will give us a hand throughout this juncture so that we can continue with our climate change adaptation programs.”

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