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FNC Steering Committee and CEO make an urgent call to the new Government

Colombian coffee production

BOGOTÁ, Colombia — In an ordinary session of the Steering Committee of the Colombian Coffee Growers Federation (FNC) held in Bogotá, and after analyzing the difficult situation that the national coffee producers go through, severely affected by a falling domestic coffee price, the federated representativesof the 15 coffee departments inform the public opinion about the deep concern of coffee growers and their families.

Furthermore, the Steering Committee members make a call to the national Government and invite the President elect, Iván Duque,to jointly analyze, as soon as possible, the actions to deal with this bitter moment that affects coffee farmers and other issues of great importance for the FNC and the country, given the impact of the sector on the national economy and regional social stability.

This decision is made with the following considerations:

  • The international reference price for mild coffee (C Contract) completes 22 months systematically fallingat a rate of -1.4% per month, from 160 ¢/lb in November 2016 to about 108 ¢/lb in July 2018.
  • International price in the first half of 2018 fell 13%, from 138 ¢/lb to 119 ¢/lb, even below the historical long-term average (150 ¢/lb in the last 10 years). This situation has worsened in the last month, with an average of 108 ¢/lb, a 17% declinecompared to the same month in 2017.
  • Domestic base purchase price, calculated with the C Contract, the quality premium and the exchange rate, in the first seven months of theyear has fallen over 11%; as a result, producers have lost on average COP90,000/load,as it has fallen from COP 849,000/load in July 2017 to COP 717,000/load so far this July.
  • Profitability of the coffee sector has been seriously affected by gradual rises in labor,with a minimum wage that has increased over 5% a year in the last decade. Another factor affecting profitability of the sector is the high cost of coffee inputs, especially fertilizers, which in the last year increased 8%.
  • Production costs prevent coffee farmers from resuming the dynamic renewal of coffee plantations and other activities to maintain their productivity and therefore income of coffee-growing families.

Given the commitments and coincidences with the program of the new national Government, the FNC expresses its willingness to work to define an agenda for actionin the short, medium and long term, and thus respond to needs of coffee farmers and contribute to development of the country’s rural sector.

The FNC and its federated representatives will continue working for Colombian coffee growers’ well-being.