Tuesday, June 19, 2012

Colombia's Coffee Crisis

A handful of just-roasted Colombian Arabica coffee beans. 
Before drugs, Pablo Escobar, guerrillas and paramilitaries, Colombia was known as coffee country. It still is, but may not be for longer.

Examining a bag of Arabica coffee ready for export. 
Coffee has been grown in Colombia since at least the 1700s, when Jesuit priests first cultivated it. It was first grown commercially in the 1800s, and by the mid-1900s Colombia's economy depended on it. Dictator Gustavo Rojas Pinilla used income from the mid-1950s' high coffee prices to build Bogotá's El Dorado airport and the avenue leading to it, among other public works projects. By the 1970s, coffee provided some 70% of Colombia's export earnings, altho I don't know whether that included illegal products. But by the mid-90s that number had dropped to only 25% and less than 10% by the year 2000. 

Today, coffee cultivation still employs more than 30% of Colombia's agricultural laborers. But in recent years both production and prices have dropped. Production has been hammered by climate change, the armed conflict (which drives peasants off their land) and cycles of replanting, since it takes about five years for a coffee plant to produce its first harvest.

According to El Tiempo, Colombia's coffee production had dropped from some 16 million sacks per year in the early 1990s to under 8 million last year. Colombia's percentage of world coffee production has dropped from 16% in the 1960s to 6% last year. And coffee's percentage of Colombia's total exports has plummeted from 65% in the late 1970s to only 4.5% of exports last year.

Fresh-roasted coffee beans at Cafe de la Fonda,
a small coffee factory in Bogotá.
The damage from this drop in production has been compounded by plummeting prices, despite growing world coffee drinking. An expected huge harvest in Brazil of high-quality Arabica beans similar to those Colombia produces has pushed world prices way down this year. Today's Wall Street Journal reports that coffee future prices have dropped 15% during the past month. On the other hand, prices for the cheaper Robusta beans, which Colombia imports for domestic consumption, have risen recently.

Still, Colombia is still known internationally for producing mild, high-quality Arabica beans, the gold standard for coffee drinkers. 

Samples of Arabica beans on right, and smaller,
miscolored Robusta beans on the left. 
Even so, Colombia coffee's longer term prospects are still positive - just as long as the country can get production climbing again. Worldwide coffee consumption is almost sure to continue rising, thanks to the rise of China and India and new research showing coffee's health benefits. And, as China's and India's middle classes grow, they're likely to ask for the milder, more expensive arabica beans Colombia produces.

By Mike Ceaser, of Bogotá Bike Tours, which offers different kinds of coffee tours.

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