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Two Italian importers explain how the coronavirus is worsening the coffee crisis

coffee crisis

MILAN – A few years ago the BBC website published an article disturbingly entitled: “Will Coffee Taste Worse as the Planet Warms?” Now, that question might even be taken a stage further, as we ask:: will we actually have any coffee to drink in the future? The situation facing one of the world’s most widely traded (and best loved) commodities is giving great cause for concern, and the Coronavirus crisis certainly hasn’t helped. Two leading coffee importers, both from Trieste, told us more about what is happening.

“The pandemic is causing problems on both the supply and the demand side of the market,” explained Theresa Sandalj of Sandalj Trading Company.

“There are critical issues at every stage of the supply chain. In agricultural terms, many farms that pick by hand use labour from neighbouring countries: when borders were closed the flow of seasonal workers dried up and the risk was that the drupes would be left to rot on the plants. In landlocked countries like Rwanda it is difficult to transport the harvested coffee to mills and to ports, and the tightening of border controls is causing considerable delays. Small and medium-sized exporters, who need to present a contract that has been stipulated if they are to obtain the loans they need to purchase the coffee, can now no longer close the same number of contracts as before because of the uncertainty surrounding consumption levels. As recession looms in consumer countries, producers of specialty coffees fear that roasters will prefer to buy cheaper forms of coffee.”

The worst affected areas at the moment are Central America and India, as Alberto Polojac, owner of Imperator confirms.

“Brazil has a solid, highly mechanised structure, with large-scale producers, so despite the critical situation in the big cities, the coffee market seems to be under control. Central America, on the other hand, has always suffered from a lack of adequate infrastructures: it can take anything up to four weeks for a small producer’s coffee to reach the port. And now there is great concern with regard to the situation in India.”

“I think all section of the population at risk are suffering: it’s important to supply small-scale businesses and farmers who are often less well-equipped than the bigger ones,” Sandalj concludes.

What are things like in bars? According to Polojac “We are recovering, but takings are still down by 40%, especially in Italian bars, which have always made their money from high volumes and fast consumption. The customer experience has changed: people still want to go out to the bar, but they now go to their local bars more, more people are ordering takeaways and there is more eating and drinking at home. Bars that have also cultivated a local clientele are being rewarded now. But there is a general need now for establishments to reinvent themselves: summer will bring some much-needed business, but more efforts will have to be made with online shopping, e-commerce outlets and investments in advertising. The single-servings market, which is doing very well, could be an opportunity.”

“Volumes in the Ho.Re.Ca sector in Italy have been reduced because of the fall-off in tourism, but many of our Italian clients are work well abroad, and that makes up for the shortfall,” says Sandalj. “We have honoured all our purchase contracts and we will go on seeking out special coffees as they return. We are also providing consultancy with regard to alternative market developments, takeaways and home consumption. Takeaway coffee has long been the norm abroad, so the crisis was not felt so strongly there.”

All of this should be seen in the context of prices at source that are at an all-time low, “something roasters are often not even aware of, showing little in the way of far-sightedness in my opinion,” Polojac concludes.