Tuesday 03 October 2023

Colombia: Coffee production drops further than expected, says report

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BOGOTA, Colombia — In marketing year (MY) 2017/18, Colombian coffee production fell further than expected to 13.8 million bags green bean equivalent (GBE), according to the latest USDA attache report.

The main reason for this drop in production was unfavorable weather conditions, particularly during the first half of the year, including excessive rains and considerable cloudiness.

During MY 2018/2019, weather conditions are expected to be favorable, resulting in an estimated production of 14.3 million bags GBE. Exports should also grow by nearly five percent to 13.3 million bags GBE.


Rising cloudiness and rainfall due to a low intensity La Niña weather phenomenon greatly affected coffee production in Colombia, particularly during the first half of 2018. Additionally, despite FEDECAFE’s and the Colombian government’s plan to increase the number of hectares annually renovated to at least 90,000 hectares, only 72,000 hectares were renovated in 2017.

As a result, in MY 2017/2018 domestic production reached 13.8 million bags GBE, representing a 5.5 percent drop from MY 2016/2017.

Although this number is still higher than historical averages, it marked the end of three consecutive years of production levels over 14 million bags GBE.

Looking forward at production in 2019, the El Niño weather phenomenon is expected to bring warmer and drier weather conditions to key production regions in Colombia, which could be highly beneficial for the flowering period of MY 2018/2019.

Furthermore, Colombian coffee production is expected to maintain production levels close to 14 million bags GBE, as a result of the continuation of the highly successful replanting program of coffee rust resistant varieties.

FEDECAFE estimates that average coffee productivity has increased to 18.2 bags GBE per hectare, 32 percent higher than the last decade (13.8 bags GBE). From the beginning of the replanting program in 2012 up to now, more than 420,000 hectares have been renovated, which represents nearly half of the total coffee production area in the country.

On average, 84,000 hectares are renovated annually, but FEDECAFE and the Colombian government plan to increase this number to at least 90,000 hectares per year to reach the production goal of 18 million bags GBE by 2024.

In 2017, only 72,000 hectares were renovated, as the government support was not available to farmers until later in the year. The renovation cost per hectare is estimated between 8 to 12 million Colombian pesos ($2,860-$4,285 dollars).

The average size of a Colombian coffee farm is 4.5 hectares of land. FEDECAFE estimates there are 560,000 coffee growing families, where small farmers with less than 5 hectares of land are responsible for approximately 69 percent of coffee production in Colombia.

There are 940,000 hectares of coffee planted in Colombia but only 780,000 correspond to technified crops, which mean they are partially planted with improved coffee varieties such as rust resistant trees, and are in dense plantations less than 12 years of age.

FEDECAFE indicates that about 80 percent of coffee area is planted with rust resistant varieties, compared to 35 percent in 2010, when weather conditions had devastating effects on coffee production.

According to FEDECAFE’s last sanitary survey, on average, borer infestation and rust levels are below two percent.

The departments of Caldas, Quindío and Risaralda have been known as the Colombian coffee region (Eje Cafetero in Spanish) because years ago they grew and produced the majority of Colombian coffee. However, given lower agricultural labor costs and climate change, coffee production has shifted to other departments such as Huila, Antioquia and Tolima. In 2017, these three departments accounted for 46.8 percent of Colombia’s total coffee production, while Caldas, Quindío and Risaralda only accounted for 17.5 percent. The “coffee region” is nowadays well known for developing tourist attractions to highlight Colombian coffee and its culture.

Medium and large scale growers have faced higher production costs due to a shortage of agricultural labor during harvesting season; however, since 2016, Venezuelan seasonal workers have supported labor in the main producing regions. In addition, the flowering period for the MY 2017/18 harvest has been more dispersed than previous years.

This will result in lower concentration of labor needs, and thus, less pressure for higher wages. FEDECAFE estimates that average production cost per 125 kilogram bag is 600,000 Colombian Pesos (COP) (USD 215).

Domestic prices during MY 2017-2018 were lower as a result of a stronger Colombian currency and low global prices. Such a dramatic price reduction motivated coffee growers to claim support from the government, which in August 2018 pledged nearly $31 million dollars in direct government assistance to Colombian growers affected by severe price reductions.

Additionally, the Colombian government continues to assist Colombian growers with 100 grams of fertilizer per each new tree planted.


Colombian coffee consumption continues to grow, driven by an increasing number of coffee shops and the creation of new coffee products to satisfy the rising demand of young professionals and foreign visitors.

In MY 2017/18, domestic consumption is estimated to have reached 1.6 million bags GBE, compared to 1.2 million bags GBE in 2012/13, an increase of 33 percent.

Domestic consumption is projected to marginally increase in MY 2018/19 to 1.8 million bags GBE.

Domestic consumption is believed to present important opportunities for increased coffee demand in Colombia, where per capita consumption reaches 2.1 kilograms, a figure significantly lower than Brazil’s nearly 6 kilograms.

The major players in the Colombian coffee stores market are Juan Valdez, leading with 22.6 percent market share, followed by OMA (12.5%) and McCafé (4.6%). Other companies with a presence in this market include Illy, Segafredo, Café Tostao, and the mega-coffee retailer, Starbucks, which started operations in Colombia in 2014.

Café Tostao presence has dramatically grown in the last two years to have about 300 small coffee stores in Bogota and Medellin.


Coffee exports reached 12.7 million bags GBE in MY 2017/2018. The decline was primarily related to overall lower production levels in MY 2017/18. Following an anticipated production recovery in MY 2018/2019, Post estimates Colombian coffee exports will reach 13.3 million bags GBE in 2018/2019.

The United States is the major single destination for Colombian coffee, importing approximately 44% of the value of all Colombian coffee exports, followed by the European Union (25%), Japan (10%), and Canada (7%).

Traditionally FEDECAFE purchases coffee from its members, but in an effort to promote direct trading and increase small-scale producer income, FEDECAFE launched an initiative to allow registered exporters to ship coffee in small quantities. Shipments of up to 60 kilograms of green coffee, roasted coffee, instant coffee and coffee extract, are occurring with authorized private shipping companies.

This initiative has resulted in a larger number of private exporters. To satisfy the increasing domestic demand, imports are estimated to have increased in MY 2017/18 to 420,000 bags GBE, and further grow to 435,000 bags in MY 2018/19.

Colombian coffee bean imports are mainly from Peru, Ecuador and Brazil. Imports are primarily used to meet the lower end of the domestic market.


Currently there is no government or FEDECAFE policy to support large scale carry-over stocks of coffee. In MY 2017/18 beginning stocks reached approximately 1,135 bags GBE. In MY 2018/2019 ending stocks will fall to 811,000 bags GBE. There is no policy incentive or infrastructure to maintain long term stocks.


The decrease in domestic prices due to a stronger peso against the dollar and lower global coffee prices motivated coffee growers to seek government assistance through the Protection for the Income of Farmers (PIC) subsidy program. This government program had been suspended since the second part of 2014 as prices have peaked above the PIC trigger price (production cost).

The Colombian government has not restated the PIC program but it is offering financial assistance through the Rural Funding Incentive program (ICR), which provides loans with discounted payback terms.

Additionally, a special loan category supported by the government Financing Fund for Agricultural Sector (FINAGRO), was established for supporting small growers in replanting their coffee fields.

The Ministry of Agriculture is also supporting specific projects focused on improving post-harvest process and coffee quality. The funds allocated in 2018 by the Colombian government and FEDECAFE’s fund are estimated at COP 45,000 million (USD 16 million), mainly to support the replanting program.

Additionally, in August 2018, the Colombian government pledged nearly $31 million dollars in direct government assistance to Colombian growers affected by severe price reductions.

Most coffee growers are members of FEDECAFE and take advantage of the organization’s educational programs, technical training, and sales support. FEDECAFE provides technical support to coffee producers through the extension service that assists growers on good practices for planting, harvest and post-harvest, as well as processing that have an impact on the final quality of coffee.

In addition, FEDECAFE manages low interest loan programs for the costs of replanting; however, loans are only offered for planting rust resistant varieties.

FEDECAFE purchases coffee from its members at an internal price that parallels the international commodity markets less some administrative and internal transport expenses.

FEDECAFE’s price acts as a floor price should farmers not procure higher price premiums for specialty coffee through other buyers and intermediaries.


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