Market Reports

Colombian coffee’s miraculous recovery

It was as close to a champagne moment as industry officials can experience in coffee. When Colombia’s final figure for the last 2013-14 harvest came in, production had closed at 12.12 million 60-kilogram bags of coffee. This was an increase of 22 per cent on the previous year and – perhaps more importantly to the country’s growers – the result of an incredible effort to achieve recovery. By the end of February, early indicators were pointing to an increasingly rosy outlook for another crop of at least 12 million bags in 2014-15. “Colombia has really come back and it’s great to see all this new coffee from Colombia now starting to reach the market, especially with all the continuing problems from the drought in Brazil and the rust in Central America,” says Christian Wolthers, a Partner in Miami-based brokers and green coffee importers Wolthers-Douque. At the headquarters of the Colombian Coffee Growers Federation (FNC) in the country’s capital Bogota, officials remain cautious about predicting any spectacular increase in the production from the new crop cycle. Rather than focus on volume, their talk is more about stability and reliability. “We are feeling very much at ease with the situation now because, most importantly, we have returned to a range of stability where we can feel secure and confident since production is around 12 million bags,” Luis Fernando Samper, Chief Communications and Marketing Officer with the FNC, tells GCR Magazine. “It’s not just about the fact that we have recovered our productive capacity, the most important thing is that the market knows it can rely on Colombia again.” A trip to coffee producing regions in Colombia today will present visitors with a very different image than the pest infested crops seen at the height of the production crisis between 2010 and 2011. With nearly 70 per cent of Colombia’s coffee areas now replanted with new and rust-resistant varieties, perfect green trees with abundant yields are the rule rather than the exemption. “When the rust hit here starting in 2010, it was extremely aggressive and at the peak of the attack over 70 per cent of all the area was infested. Today we have turned that around and over 70 per cent of the total area is now planted with varieties resistant to the rust fungus,” says Jorge Raul Gomez, an Agronomist providing extension services for the FNC in the Buenavista coffee region. So far, production figures from the new 2014-15 harvest in Colombia are looking good. Even if it’s still too early to predict where the final numbers are likely to end, coffee production in the month of January was up 7.6 per cent on the previous year, reaching 1.09 million bags. Total production in the first four months of the new cycle from October through January, meanwhile, was up 2.2 per cent on a year ago to 4.39 million bags, according to FNC figures. The recovery in production is reported from across the Colombian coffee producing regions. “We had a very good harvest last year, definitively the best since 2009, and we are expecting another good and perhaps even bigger harvest in this new season,” says Arturo Restrepo, a small grower with five hectares of coffee in the south-central department of Tolima. “We had a magnificent harvest last year and this time we really are talking about a more permanent recovery. The large majority of all the farms have been replanted and the trees are not only now resistant to rust, but also younger. We will continue to get high productivity from these lands for another two to three years,” said an exporter in north-central Antioquia, which is competing with southern Huila for the title of Colombia’s largest coffee producing province.
But, adds the exporter, despite the rosy outlook and recovery registered to date “it still looks very difficult to reach 13 million bags and near impossible to reach 14 million bags” because it’s not all production in Colombia is looking quite as promising for the 2014-15 harvest. With two annual crops, forecasting coffee production in Colombia has always been tricky, and getting a good production in the main harvest from late September to mid-January is no guarantee that an overall bumper crop will actually materialise. Add to that the increasing vulnerability to climate change, and the final Colombian coffee harvest in any given year is subject to the very different weather patterns in what constitutes the country’s two entirely different crop cycles. Unlike the main harvest, Southern Colombia’s coffee lands were hit with unseasonal rains in December and January, which resulted in reduced sun exposure and cooler temperatures. As the flowering season for the southern region – which is dominated by the mid-crop, popularly known as the mitaca – did not end until November, the prolonged rain has coincided with the crucial period for bean formation. This is where young green cherries on trees need a delicate balance of rains and sun exposure in order for the cherries to develop and produce two healthy beans. A reduction in the sun exposure – as has been the case this year – can put the cherries at risk of developing into smaller, black or hollow beans. Excess rains prevent a full bean formation to take place. “We had rains non-stop since the second week of December until the first week of January,” says Eduardo Castillo, a small coffee producer with about two hectares of coffee in La Union, in Colombia’s southernmost coffee province of Nariño. “We’ve had too much winter, too much rain since mid-December, and that is always a problem for the coffee which needs sun at this time of the season in order to produce a good harvest,” says Miriam Gonzalez, another small grower in neighbouring Huila. The mitaca, which is harvested between April and July, traditionally makes up between 30 and 35 per cent of Colombia’s total annual harvest. But this pattern has changed significantly over the past 10 to 15 years. When the 2001 – 2003 coffee crisis pushed global coffee prices to historical lows and sharply below the cost of production, the result was that world production collapsed as smallholder farmers across the globe abandoned their crops. This effect was felt the most in Colombia’s largest coffee growing region known as the “Eje Cafetero”, which spreads out over the three central provinces of Caldas, Quindio and Riseralda. These events saw large areas of coffee lands abandoned, and over the past 10 years taken out of coffee production all together. “This land simply became too expensive for coffee production, and given the nearness of the Eje Cafetero to the metropolitan area and the capital, a lot of these coffee farms were either turned into grass lands used for livestock or purchased for industrial development,” says Mauricio Hernandez, a local businessman in Manizales, at the heart of Caldas province. The result was that Eje Cafetero would go from producing as much as 28 per cent of the total annual Colombian coffee harvest in the mid to late 1990s, to today to account for between 20 – 23 percent, according to historical figures. North-central Antioquia, which for years was Colombia’s single largest producing province with between 18 – 20 per cent of the overall crop, has similarly seen its production share dwindle to between 16 – 18 per cent today, according to FNC figures.  Add to this what among many in the coffee industry describe as “the Huila factor”, given the rapid growth of both output and quality coffee from that province, the dynamic of this switch in balance has been that the mitaca crop today has grown to almost 50 per cent of the overall Colombian coffee harvest. There is no denying that challenges remain ahead for Colombia’s coffee growers. But with what is arguably the youngest coffee park in the world, the Colombian coffee regions should be well prepared to face the future. Despite the potential complications for the mitaca, the new harvest is in good shape to produce another bumper crop. “It’s still too early to predict exactly how big the Colombian harvest will come in by the end of the 2014-15 crop year, but it’s pretty safe to expect another good crop of at least 12 million bags and that will bring some much needed relief to the Arabica balance,” says Wolthers. GCR

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