Representatives from the coffee sector in Brazil and Colombia met on 27 August 2018 to discuss the world coffee price crisis and imbalance in the supply chain.
At the meeting at the Brazilian Ministry of Agriculture, Livestock, and Supply in Brasília, the participants discussed action they might take to confront the low-price scenario, which has seen the C price in New York fall below 100 cents, well below the cost of production. This jeopardizes the survival of 25 million coffee families worldwide, they said.
The participants at the meeting said financial speculation by actors outside the chain have put pressure on coffee prices that have led to ‘forced migratory movement’ due to poverty and the expansion of illegal crops in some countries.
In a joint statement from Colombia and Brazil, the countries said, “The holders of coffee stocks have a great influence on international prices.” They advocated shift stocks from consuming countries to producing countries. They said it was essential that producers develop policies to enable them to withhold stocks and avoid sales when prices are depressed. “It is also important that stock formation in producer countries be managed by the private sector coherently with market risk management tools,” they said.
They also highlighted the importance of increasing consumption in emerging markets and producing countries, for which, they said, “the support of the International Coffee Organization (ICO) is expected.”
The statement said another major concern of all producing countries is payment terms imposed on producers. They cited “abusive payment terms of more than 200 days, which massacre any possibility of economic sustainability for producers.”
“Programmes that some multinational companies do to promote sustainability are offset by their business practices,” they claimed. “Likewise, international non-profit organizations that promote coffee cultivation must take responsibility for absorbing the resulting production surpluses.”
The statement said that Brazil, Colombia and the other producing countries “will consider all necessary actions to solve the crisis,” which, they said, “threatens the future supply of coffee.”
Coffee producing nations will meet at the ICO in September to deepen the discussion, they said. “It is a priority for producers to communicate to consumers globally the current situation and how this market scenario creates a spiral of poverty in producing countries,” they concluded.