Colombian Coffee Scarcity Distorts Markets

The scarce supply of Colombian coffee is causing big distortions in international markets.

Wednesday, June 24, 2009

In New York’s market, premium Colombian coffee is trading at very high prices, averaging $0.70 per pound, because of the shortage in supply from the South American country, caused by bad climate and a plan for reforestation.

This is pushing buyers to look at other producers which are normally associated with a lower quality of coffee, like Brazil, because the coffee growing regions that are more comparable to those in Colombia, the Peruvian Andes and Guatemala, also face lower production.

According to an analysis in guardian.co.uk, these situations are causing contraband coffee production to move to destinations with higher prices. It is estimated that between 400,000 and 500,000 tons of Honduran coffee is brought illegally to Guatemala in order to sell it at the higher price mark of the Guatemalan brand.

More on this topic

Coffee: Global Report up to January 2015

February 2015

The climate in Brazil was the main factor affecting the behavior of the international price of the grain in January, starting the month high and closing at $143.43 per pound.

From the Coffee Market Report - January 2015 by the International Coffee Organization (ICO):

Dry weather in Brazil at the beginning of January spurred prices higher, with the daily price of the ICO composite indicator rising from 140.57 US cents/lb to a high of 155.40 by the middle of the month. However, forecasts of rain later in the month punctured this brief rally,causing the ICO composite to fall back down to 143.43 cents by the end of January.Nevertheless, overall rainfall levels in Brazil remain below average, with the development of the 2015/16 crop now at a crucial stage. Furthermore, an infestation of coffee berry borer has led to a state of phytosanitary emergency being declared in the states of São Paulo and Espírito Santo.

Outlook for Colombian Coffee

October 2014

Projections are that the high earnings achieved in the last harvest may not be repeated once production recovers in Brazil and Central America overcomes the problem of rust.  

The recovery of Colombian coffee production is due to several factors, including improved planting, renovation of 3,051 million coffee trees and problems faced in other producing countries.

Honduran Coffee Exports Reach $1,240 million

September 2011

Estimates for this season are that 4.5 million quintals of the grain will be sold, exceeding the record high of 4.1 quintals.

An increase in production and high international prices are two of the main reasons behind the growth of coffee exports.

In addition, the benevolence of the weather in recent months has also benefited the sector, which has covered some of the demand that would normally be served by coffee producing countries such as Colombia and Brazil, which have been influenced by bad weather that affected usual production levels..

Honduras Commits Firmly to Quality Coffee

February 2011

26,000 new hectares of coffee will go into production in the short term and many more in the coming years.

Honduran farmers are planting more and more coffee, trying to exploit the current high international prices, increasing demand and declining production in many of the quality coffee producers like Colombia, Guatemala and Costa Rica.

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