The National Coffee Forum was held on August 1st in Pereira. In the conditions that the country’s coffee industry is going through, this event discussed a wide range of topics.

As they were exposed, they allowed for the clarity and precision necessary to defend coffee producers, coffee and coffee institutions that, like the National Coffee Fund (FoNC), are at serious risk.

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On June 24, 2023, in a meeting held with leaders of the sector, they concluded that great clouds threaten the permanence of a sustainable coffee business.

They specified the reasons for the crisis that included an abrupt drop in the internal price of the bean, the massive imports of pasillas and coffees of terrible quality, the issue of future purchases of coffee, the guarantee of purchase of the bean, the financial damages to the National Coffee Fund, The situation of the coffee growers’ cooperatives, in addition to the negative implications of the absence of relations between the National Government and the National Federation of Coffee Growers, obliged the country to act and make decisions that would seek to find solutions to the enormous difficulties that are looming for the national coffee industry.

In various interventions in the Forum the problems indicated were broken down, to the extent possible, with the purpose of seeking the necessary unity of coffee growers on solid bases in order to facilitate and promote, with clear objectives, the social mobilization of coffee growers.

Due to the effect that Covid-19 had on the disruption of maritime freights and the shortage of containers, the prices of the so-called commodities soared, including the price of coffee, due to the insufficient access to world markets.

Once the international logistics crisis was overcome, and with the recovery of the harvest in Brazil, coffee prices began to register an abrupt fall worldwide, which has to this day serious repercussions on the domestic market of the grain.

In 2019, the average price on the New York Stock Exchange was 133 cents per pound of excelso coffee. Starting the pandemic, in 2020, it was 158 cents; in 2021, it was 218 cents; in 2022, at the end of the pandemic, 279; in June 2023, it dropped to 215 cents and, in July, the average was at 161 cents, which means that it is in free fall.

In pesos, the curve for the 125 kilogram dry parchment coffee load is as follows: in January 2019, the average price was $727.645; in the same month of 2020, it was $886,161; in 2021, $1,073,000; in 2022, $2,148,000; and, in January 2023, it dropped to $1,838,000. In May, it stood at $1,895,000. By June, it plummeted to $1,577,000 and, in July, the debacle came, standing at $1,318,000, and it could continue to fall. In other words, the domestic price fell more than $500,000 between May and July, in a context of high inflation.

Why such an abrupt drop in price? What happened? There are three facts:

1. A downward price decline in several commodities, including coffee.
2. A reduction in the Market Representative Rate (MRR), that is to say, in the price of the dollar, which fell from almost $5,000 pesos per dollar to less than $4,000, affecting the domestic price.
3. A drop in the quality premium or coffee differential, which went from 50 or 60 cents on the dollar to 15.20 cents.

The above has caused the internal price, compared to production costs, to leave coffee growers with losses of between $20,000 and $35,000 pesos per bushel, depending on productivity, efficiency, purchase prices of inputs, labor and other production costs.

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How to solve this very serious issue? There are at least two possibilities:

1. That the national government expresses to the world coffee bean market that Colombia will sell its coffee to whoever pays fair prices, that is to say, prices that reflect the costs of production and leave a profit for the coffee growers.

This issue should be raised with strength and clarity, and work for its materialization through coffee diplomacy, but above all, through an energetic demand from the national government.

A comparison of historical prices in the world market shows that the multinationals pay today, to the producing countries, prices that are equivalent to 50% of what they paid them, in constant prices, 200 years ago. And, compared to the prices at which the multinationals were buying in 1983, it is equivalent to 30% in constant prices. This relationship in the world grain market has to end.

2. Another solution is for the National Government and the National Federation of Coffee Growers to concretize a policy that allows the transfer of resources from the Coffee Price Stabilization Fund (FEPC) and the national budget to coffee growers, so that they receive fair prices.

This proposal is similar to what was done during the recurring coffee crises that began after the breaking of the International Quota Agreement, which inaugurated the Free Market or Free Trade. It is worth remembering that the breaking of the Pact brought disastrous consequences for coffee growers, which were overcome thanks to the struggle for the cancellation of bank debts, which prevented the auction of the properties of more than 120 thousand coffee growers.

As of September 2001, the Government granted direct support to coffee growers, known as Government Support to Coffee Growing (AGC). This incentive was managed taking into account the exchange rate, the external price and the fiscal contributions of the Nation.

The transfer of public resources to coffee growers also occurred in 2012, in the face of the fall in the international price and after a powerful coffee mobilization.

On that occasion, the Support to the Income of Coffee Growers (AIC) was created, which was transformed, after the national civic coffee strike in March 2013, into the Coffee Income Protection Program (PIC). All these struggles led the National Government to allocate sufficient resources from the national budget to address the crises.

It seems that the country is heading towards a situation equal or similar to that of 2013, when more than 110,000 coffee growers took to the main roads of this country and, with their struggle, won the right to continue being coffee growers.

This is, undoubtedly, the main issue that the successful National Coffee Forum addressed.

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