A large international group of coffee associations has demanded help by releasing a letter to the global coffee market, as the commodity price remains at record lows.
Each association represents coffee growers in major producing countries - Colombia’s FNC, Africa’s AFCA, Latin America’s Promecafe, Brazil’s BSCA and the United States/Europe’s Specialty Coffee Association. Their joint letter is a call for direct action to help bolster the floundering commodity price, or “C price” of coffee, which is used as a benchmark for all coffee wholesaling across the globe.
Many in the industry are concerned that a failure to raise these prices is feeding into humanitarian crises’ around the world. As prices remain low, producers are unable to support their families, and turn to illegal but more lucrative crops, or decide to migrate.
Just this year, the C price has been at its lowest level ever since 2006. This record low is part of an ongoing downtrend that has been visible through much of 2018, and now much of 2019 too. This depreciation is a repetition of a cycle of ups and downs that has plagued the coffee market since the late 1980s.
The letter released by the producer’s associations pointed out that the modern C price of coffee was out-of-date, and does not cover production costs for a majority of reasons, once of which being that hedge-fund managers do not understand coffee, nor care to learn about it.
Colombian coffee producers have proposed bypassing the C price by finding prices outside the commodity market that can support production. To this end, a large number of producer groups sent another open letter last year to major roasters asking for help.