For those of you that like to surf the web to find the latest news from the coffee world, it is most likely that you already have found the statistics that I would like to introduce as follows, but for those who have not seen this data, or have not found an English version, I will summarize the most important information brought by FEDECAFE (National federation of Coffee Growers of Colombia) and their press office regarding the Colombian current local market environment and forecast.

One of the many reasons that coffee prices have not dropped dramatically in the C market in tough times is because of the shortages of coffee in some big producing countries such as Colombia, Brazil and Costa Rica. Even though the financial crisis has touched almost every business in the world, coffee growers in Colombia perceived last harvest season as relatively good because they have on average been receiving more money during the last quarters of the 2008 and 2009 period .

The report from FEDECAFE press office brought up the following data:

• The green bean exported from Colombia has dropped 2% compare with last year representing 198.000 less bags of coffee exported.

• Last year the production of Colombian coffee dropped 9% compared with 2007. The average production is still around 11.500.000 bags (132 lb per bag) of green beans.

• The reason for the decrease of production is mainly due to the high price of fertilizers and heavy rains.

• Although the production of coffee during 2008 has decreased 9%, the coffee exported has only decreased 2%. I believe one of the reasons is due to coffee stored previously in past years. On the other hand, the gross revenue for 2008 was USD. 1’ 953 million- a record high not seen since 1997.

• One reason to get such a record is due to the average price paid above the C market of 0.25 USD cents per pound for the Colombian coffee (also known as premium price). Another reason is the policy of FEDECAFE to promote and export coffees with added value such as freeze dried, roasted coffee, certified green, and specialty coffees caused an increased share in the total exported coffee, as shown in the chart 1. This tendency has also helped to increase the value of the standard quality coffee mainly due for availability reasons.

• Another reason for the revenue increase of the coffee industry was the strength of the US Dollar against the Colombian peso during the second half of 2008.

• In addition, the global forecast for the coming harvest has estimated a shortage of 8 millions bags, which would eventually push prices of this commodity up. For this reason, many producers expect no big moves of the price downward even with the current economical environment.

One of the main goals of the National Federation of Coffee growers of Colombia is to increase the production from 11.5 millions bags up to 17 millions bags of green coffee by 2014. In order to reach this volume, more than 211.000 Hectares of coffee plantations have been stumped or completely replanted between 2006 and 2008. Most of the coffee areas that went through this program are located in the departments or States of Huila, Risaralda, Caldas and Antioquia.

The program of stumping and replanting new coffee trees is called PSF (Perseverance, Sustainability and Future) that allow growers to request up to 3 Ounces of fertilizer per tree. Growers would also get 40% of their debt paid by the FNC coffee fund as well as 100% of any due debt coming from interest. The forecast production volume could be seen in Chart 2. The blue line represent the production if the PSF program succeed, the green line represent the production if the PSF is not implemented and the yellow bars represent the volume of new green bean bags produced by the implementation of the PSF program.

Note: Sorry for the Charts it seems that is a no compatilble format. You may also able to check them at
http://www.portlandroastingblog.com/2009/02/colombian-coffee-update...

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Replies to This Discussion

Thank you for this information in such a palatable format. This is very interesting information especially considering the current economic climate.

Jason Coffee
http://www.coffeecupnews.org
Hello Jason


Thanks for your comments. I hope I could bring more current issues and facts regarding coffee origin. PLease stay tune until I my next article. I wish you well in your coffeecupnews project.

Andres Castro

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