The coffee trader Ecom will be managing the funds provided by Starbucks, IFC and the IDB for long-term financing to help Nicaraguan coffee growers fight against rust.
From a statement issued by the International Finance Corporation (IFC):
The Inter-American Development Bank (IDB) will provide long-term loans to help Nicaraguan coffee farmers combat the devastating effects of the coffee rust fungus, which has swept through Central America, crippling production and threatening the livelihoods of millions who depend on the coffee industry.
It has been noted that lack of a national policy for development of the sector in the long term has prevented more than 2 million hundredweight from being produced on average every year since 2000.
Production has stagnated, with figures close to two million hundredweight for the past three years, surpassed by Guatemala and Honduras, with production levels 4 and 6 million respectively.
The fungus has propagated in more than 70% of plantations, similar to the level seen in 2012, when the outbreak of coffee rust first emerged in the region.
Of the 14 departments 13 have already reported infestation on coffee farms especially in medium and large sized shrubs. In the case of the departments of Santa Ana, Ahuachapán, La Libertad and Cabañas approximately 80% of farms have already been infected, while in Chalatenango, San Vicente, Morazán and San Miguel about 65% are affected.
About $80 million is the estimate for spending by coffee producers in 2014/15 crop season which is estimated at 2.08 million hundredweight.
Around $78.8 million has been allocated for harvesting the crop, most of which will be used in the payment of wages to collectors, who in some cases are reported by producers to, "... be able to expect to earn up to $1,000 per month."
The rise in coffee futures corresponds to expectations of lower production in Brazil and increased demand in the U.S., China and Europe.
From a report by Anacafé at the end of April 9th, 2014:
Coffee prices in "C" contracts closed at higher prices. The prices behaved in a volatile fashion. Liquidations in May contracts and transfers of positions to months further off, caused the initial decline.
After a year's absence because of the impact of the rust blight, the coffee trading association is once again organizing the contest in order to boost exports.
The Specialty Coffee Association of Nicaragua (ACEN) is preparing for the 2014 Cup of Excellence event, considered of great importance in keeping the franchise of the Alliance for Coffee of Excellence. Because of the impact caused by rust, last year the event was not held.
The contribution of $9 per quintal to be made by coffee producers to the trust has been accepted by some and rejected by others.
Arguing that the retention of $9 per quintal is not beneficial for producers, two deputies have submitted a draft law that seeks to eliminate it.
The proposal "has caused discrepancies between those involved in this area, as many agree with it, and there is a good percentage that do not approve of the initiative."
Months after its legislative approval, the Coffee Trust is to receive funds to support the sector affected by rust.
Last Friday the Comptroller General of the Republic ratified a contract for the Coffee Trust. For months several administrative obstacles had delayed approval of the trust which will be used to provide support to producers affected by the coffee rust fungus.
While everyone waits for the trust to manage to complete its last administrative tasks, it has been revealed that the maximum interest rate to be charged for its loans will not be more than 6%.
The $40 million Coffee Trust which was approved by the Costa Rican Congress last year, and is awaiting final approval from the Comptroller's Office, will open four credit programs with maximum interest rates of 6%.
A year after the declaration of a state of emergency by the government because of the rust blight, 25,000 farmers are still waiting for the bureaucracy to enable the operation of a $40 million trust fund.
The money has already been deposited in an account with the Ministry of Agriculture and Livestock (MAG), but the Comptroller General of the Republic must endorse the trust no later than January 17th.
An announcement has been made of its evaluation under different conditions, confirming tolerance to the fungus, and that it will be sold at a low cost.
The seed is of the native variety of Brazil called Obata. The Coffee Institute of Costa Rica (Icafe) has made the new seed available to local producers at low-cost.
"It has been evaluated under different climate and soil conditions, where we have been able to confirm its tolerance to rust, it has very high productivity, late maturity and good cup quality," said Jorge Ramirez, technical manager at Icafe.
The price of coffee in New York Stock Exchange dropped from $281.72 in April 2011, to $112.79 in October 2013.
On November 5 daily trading on the New York Stock Exchange closed at $103.45 per quintal, $0.25 less compared to the amount reported a day earlier, this suggests that the November average will also be lower in comparison to October.
The decline in the international price concerns both producers and the Coffee Institute of Costa Rica (iCafe) as well as the government, because this is compounded by low production of the grain due to the impact of the rust fungus.
In October 2012 80,771 bags of coffee weighing 60 kilos were exported compared to 129,471 bags in the same month in 2012.
The data was confirmed by the National Coffee Association (Anacafé) . The current season began in October 2013 and ended in September 2014.
" ... Sales of the 2012-2013 coffee harvest totaled 3,706,622 bags of 60 kilos, a slight decrease compared to the 3,719,829 bags sold last season, despite plantations having been ravaged by the rust blight," reported Elperiodico.com.gt review.
Projections for the next crop production are of 1,100,236 quintals of green coffee beans, compared to the previous period which was 1,720,000 quintals, 36% less.
Salvadoran harvest forecast 2013/2014 by the Salvadoran Coffee Council:
The first forecast for the coffee harvest of 2013/2014, conducted by the Salvadoran Coffee Council, has been set at 1,100,236 quintals of gold coffee beans, which represents a decrease of 36% from the harvest of 2012/2013, which at the time of the study stood at 1,720,000 quintals. The severe outbreak of coffee rust in 2012, is be the key factor in the sharp decline.