The World Coffee producers Forum calls for immediate and serious action on coffee prices

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Recently, the World Coffee producers' Forum issued an official declaration calling for immediate and serious action against historically low international coffee prices.

The declaration lists 13 groups of coffee producers, including the National Coffee Federation of Colombia (FNC).

"with Colombia playing a leading role, 35 coffee producing countries from Africa, Asia and Latin America have called on all members of the coffee supply chain to take prompt and responsible action to respond to the current devastating international pricing crisis" coffee production communities around the world, "FNC Communications Director and Public Relations Silvia Pavajeau said in an email.

The revised statement reads as follows:

The current social and economic crisis caused by extremely low international coffee prices has reached such an extent that the coffee value chain-as a whole-cannot just continue to talk about it without taking serious and immediate action.

According to the statistics of the International Coffee Organization (ICO), about 25 million households around the world-mostly small farmers-produce coffee. Today, most of them can't even afford their production costs, and many of them can't make a living for themselves and their families.

The world drinks 1.4 billion cups of coffee a day (source: ICO), and consumers pay very high prices, from US $3.12 in the United States to US $4.60 in Shanghai to US $6.24 in Copenhagen in 2018 (source: Statista). In many cases, these prices are achieved under the commitment to the sustainability of coffee. However, sustainable development commitments usually focus on only two of its three aspects: the environment and society. Under the premise that "the market is the market", the coffee value chain ignores economic sustainability, that is, farmers' own income, and we need to let it rule.

Today's "C" futures contract is created as a reference to the price of large quantities of Arabica coffee of similar quality, called the "center". Now, with the passage of time, there have been some changes, and it is generally accepted that due to several factors, including the speculative behaviour of hedge funds that do not understand or care about coffee, the price of the "C" futures contract is already lower than the coffee production cost of most producers.

In 1982, the price of raw coffee beans fluctuated between $1.18 and $1.41 on the international market, when the average price of a cup of coffee in the United States was $1.10. In 2018, the average price of a pound of Arabica coffee beans on the international market was $1.01. In addition, on March 22, 2019, the price was as low as $0.95. Over the past few decades, the profits of coffee producers have fallen by more than 80%.

The current impoverishment of coffee producers is destroying the social fabric of rural areas in more than 40 countries in Africa, Asia and Latin America, leading to increased crime rates in producing countries, increased urban poverty and mass migration to the United States and Europe. In some countries, the current crisis has become an incentive to shift to illegal crops, as farmers cannot make a living from coffee alone.

Quality and supply are also threatened. Producers who remain in the coffee industry will not be able to afford the expenditure on their farms and proper care of coffee, resulting in inappropriate fertilization and tree care, affecting quality and depriving consumers of the flavor diversity they enjoy today. The impact of climate change is another burden on producers.

Producing countries and other participants are concerned that today's "C" futures contracts are no longer an appropriate price reference mechanism, and that the coffee industry is impoverishing producers and damaging their own future.

The current economic sustainability crisis for coffee producers needs to be addressed immediately before a humanitarian crisis occurs. An approach based on the principles of shared responsibility and full transparency must be implemented to ensure that all links in the value chain are profitable and healthy. Even if coffee is a great drink, it cannot really become sustainable coffee if it sacrifices the dignity, value or well-being of people and land. ICE (InterContinental Exchange) cannot be absent from this discussion.

Over the years, coffee farmers from around the world have been reaching out to other parts of the value chain in the hope of adopting a collective, constructive and realistic approach to ensuring the economic sustainability of producers. Unfortunately, the response was very weak.

With regard to the economic sustainability of coffee producers, it is clear that no effective action has been taken.

Other organizations listed in the statement include Agencedescaf é s Royogad & # 39 Afrique et Madagascar, African Fine Coffee Association, Asociaci ó nMexicanade la CadenadelCaf é, Guatemala National Coffee Association, Brazilian Fine Coffee Association, Conselho NacionaldoCaf é, Coalici ó nNacionalde Organizaciones de ProductoresdeCaf é, African Coffee Organization, Indian Coffee Trust, Promecafe, American Fine Coffee Association, and Vietnam Coffee and Cocoa Association.

The World Coffee producers Forum will be held from July 10 to 11, 2019 at the Royal Palm Plaza Resort in Sao Paulo, Brazil. The Forum will continue its efforts and consider the necessary actions to address situations affecting future coffee supplies. The forum invites coffee production chains across the industry to participate in activities aimed at acting together and responsibly.

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