Tag Archives: coffee prices

Colombian coffee prices reached $ 2.11 per pound

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The international price of grain rose to $ 2.11 yesterday May 12. The amended scheme guild domestic price. This price was reported by the International Coffee Organization (ICO) and, paradoxically worries the national coffee institutions.
According to the ICO, the reference price for May 12, which was released today is 211.32 cents per pound of Colombian mild Arabic. But in New York, even as the price reached 226.25 cents per pound.
The reference price is an average between the market of New York and Germany. In this country, the pound reached 199.58 cents. These prices are the highest since 1997.
The concern of the OIC itself and exporters consulted is that the Colombian coffee is rising simply because there is sufficient supply after winter last year.
As prices rise, to meet the commitments would have to respond with lower quality coffee while beverage producers would replace the Colombian blended coffees by others.
The Government and the National Federation of Coffee Growers now define a strategy to try to make the most of high grain prices recorded in the international market, despite the low production reported by the country.
Finance Minister Oscar Ivan Zuluaga, anticipated that there will be measures to ensure that growers can benefit 500,000 families of favorable prices. Therefore, he said, will announce the implementation of a new system of valuation and the domestic price of grain. This is a scheme approved by the National Coffee Committee that encourages grain quality and seeks to improve the income of producers.
The rare moment of prices has become a paradox for the sector, as there is enough coffee to sell.
Jorge Lozano, president of the Association of Coffee Exporters Private, Asoexport, said "there is distress in the guild" because you do not have enough product to meet the offices.
"The farmer has to be happy because you are compensating for the lack of production with a very good price. Unfortunately not much to sell and that is our trouble, "admitted the leader. He said that despite the good prices the prospect of a boom not seen anywhere, because there is simply no grain available. "It's very unpleasant for the toaster. He has the need to buy Colombian coffee and high prices do not like or five. And it will find that not happen again, "he said. "We have a client who is looking for alternatives. That's not good for Colombian coffee, "the President of Asoexport.
Lower production
Lozano said it is anticipated that between July 2008 and June, coffee production falling 2.5 million bags compared to previous period. This is a "very important figure," he added, facing a production of 11.5 million bags estimated for the entire year.
The official revealed that even though still undelivered production figures last April, "the decline was substantial because the records of coffee for export stood at about 450,000 bags, 200,000 less than normal."
According to the National Federation of Coffee, Colombian production fell 30% in the first two months of 2009 compared to same period last year, while exports declined by 20%.
According to the report, the fall was due to "lower production of grain, fruit of the renovation of coffee plantations, the effects of reduced fertilization and winter of the last months of 2008."
Meanwhile, the escalating price of coffee is attributed by economic analysts to a phenomenon of market speculation. Indeed, investors fear that this year there will be a substantial reduction in the supply of major producing countries like Brazil, and have begun to bet on higher prices in the future, so the price began to climb. In Brazil, the production will fall about six million bags this year, according to estimates by the Government of that country.

Predicted deficit of coffee in the world

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Global consumption of coffee should not suffer substantially due to the crisis in the global economy, it could have some impact in certain special ranges of coffee, said Wednesday April 8 executive director of the International Coffee Organization, ICO, Nestor Osorio.
In contrast, in markets where coffee consumption is not sufficiently anchored habit, as in emerging countries, it could be experienced "some kind of reduction" in demand, he admitted.
Osorio said the analysis show that demand, whose growth rate is 2.5% annually maintain its current momentum and an upward trend.
"Every year we consume extra two million bags of coffee and we are approaching 130 million bags annually worldwide," he said at a meeting on commodities organized by the United Nations Conference on Trade and Development, UNCTAD, in Geneva.
The head of the ICO said that this year there will be a shortfall in production due to the characteristic two-year cycle of Brazilian coffee, which crops are immediately followed by high production rates.
He noted that the global deficit could be around 10%, which will add a unique situation: the producers do not have enough reserves.
To illustrate the importance of this factor, Osorio reported that "30 years ago Brazil had reserves equivalent to 25% of the world, but now has nothing, and the same happens in other countries."
"In conclusion, global production of 125 million bags of coffee, a consumption of 130 million and only 20 million in inventories of importers implies that the balance between supply and demand is very precarious," he said.
Under these conditions, "any incident, such as frost in Brazil or a severe drought here or there could strangle the market and coffee prices skyrocket."
Speaking at the meeting of the UNCTAD, Osorio said that another "challenge" that will likely face in the coffee business will have to do with the choice between "food or energy."
That is, the use of land to grow crops for biofuels .
"Here I see a difficult situation in terms of sustainability for products such as coffee or cocoa," he said, explaining once that there is "the possibility that areas where coffee is grown now be replaced with crops ranging for food or energy ".
This is a "real threat" involving mainly Brazil and Africa, where coffee is grown on flat surfaces and can be a little less profitable.
Brazil is currently the world's largest producer of coffee, accounting for 36 percent of the market and Colombia has 8 percent, while the rest of Latin America has a market share of 19 percent.
On the consumption side, Europe accounts for 38 percent, North America by 22 and Central and South America by 23 percent.
The global value of coffee exports was 15,200 million dollars in 2008, while the value of this market, ie if you add that cost him all the cups of coffee you drink in a year, is 90,000 million.

Future purchases

# Following the record high prices in New York Coffee, President Alvaro Uribe has proposed to promote future purchases of grain, especially October.
# Such a scheme, he noted, would allow producers to better recovery, and thus an advantage of high prices, in favor of economic recovery.

International coffee prices are fired: the grain reached $ 1.50 a pound

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Precio del café 2008
But while the value of the product reaches unexpected levels, the dollar continues to fall, which has increased the appreciation of the peso.
The record price recorded by the International Coffee Organization (ICO), not seen for a decade (May 1998).
In the domestic market prices also rose this year as the load of 125 kilos, as the price for receiving the coffee farmers' cooperatives in the holds of Almacafé has been these days at 500,000 pesos, but now in A minimum of 521. 500 pesos (in Cucuta) and 525,250 (Santa Marta).
Producers such as Mario Gomez Estrada, Caldas representative on the National Committee of Coffee Growers, think that the international price is not a panacea, as in Colombia, production costs have increased, in labor and inputs (fertilizers).
Despite the surge in grain prices, producers can not exploit the full extent of the price because now there is no harvest, for the next harvest season is scheduled for April and May when the production comes the so-called crop mitaca. During this period, the highest production is recorded in the departments of Tolima, Huila, Cundinamarca and Santander. This means that the traditional coffee-growing region, consisting of Quindio, Risaralda and Caldas, shall be excluded from the current prices as most grain production in that region is recorded in the second half, during October and November. However, the good behavior during the past months can contribute to crop the Coffee mitaca, exceeds that of previous years.
The minibonanza comes as the country has decreased considerably the cultivated area of ​​coffee, as a result of the crisis that was experienced since the early 90's and the conversion of farms to turíticas activities.
Good prices were predicted
Although the current situation of international prices had been predicted by experts, the current price of $ 1.50 per pound was not in the plans of those who sell the grain on the NYSE. So far, projections indicated that prices were going to keep on top of a pound, but at no time spoke of the figure recorded yesterday. The increase in contributions due, according to market analysts, the increased demand and reduced inventories.