A record high! Domestic coffee prices in Colombia rise 13% month-on-month

Recently, the Colombian Coffee Growers Union (FNC) issued a report, thanks to the high international coffee futures prices, the average purchase price in Colombia has also risen, the average purchase price in Colombia is 2456567 pesos (about US $557) / load (125kg dry parchment coffee), the highest monthly closing price, while the price is the highest level in November, up 13% from the previous month.

In addition, the price for delivery at the port also increased by 5% over the previous month. On an annual basis, compared with November 2023, the purchase price of local coffee in Colombia has increased by 74.7%, and the price for delivery at port has also increased by 51.2%.

In addition to rising prices, coffee production in Colombia is also gradually recovering. All because Colombia has encountered a lot of problems in the past few years, coffee production has always been unsatisfactory, and coffee production continued to decline due to the influence of El Ni ñ o and La Nina in 2023. However, this year, the situation began to improve, the weather began to return to normal, coupled with the earlier increase in coffee acreage, coffee production has recovered this year, and exports have gradually increased.

According to the report, Colombian coffee production in November totaled 1.76 million bags (60 kg / bag), an increase of 37% over the same period last year and the highest monthly output in nearly 29 years. The increase in production has also led to an increase in exports, with the final export of Colombian coffee reported to be 1.039 million bags (60kg/ bags) in October, an increase of 14.4 per cent compared with the same period last year.

Although the export volume has increased, it has been pointed out that at present, there are many problems in Colombian ports that affect Colombian coffee exports, all because of geopolitical problems and the Red Sea crisis, resulting in a number of shipping routes that need to detour, which increases the shipping time of ships, leads to congestion in many ports, and there is a shortage of containers.

These situations have led to a large amount of coffee piling up at the port terminals, waiting for export, but during this period, many coffee exporters have cost overruns and inefficiencies due to additional costs such as storage, retention, pre-stacking and so on. In addition, Colombian traders worry that Colombia may face stricter trade policies with the United States after the new US President Donald Trump takes office in January, and tariff measures may make imports and exports more expensive.

In addition, Colombia is a large importer of chemical fertilizers, which needs to import large amounts of chemical fertilizers every year, and the acreage of Colombian corn, banana and coffee crops has been expanded in recent years to increase the yield of these crops. but at the same time, the need for chemical fertilizer has also increased.

However, due to geopolitical problems, the rising cost of importing fertiliser in Colombia, and the strong trend of the US dollar today, has led to the continued depreciation of the Colombian currency, further pushing up import costs. Although the Colombian government and agricultural associations are taking measures to reduce their dependence on imported fertilizers, it is still difficult to fully solve the shortage, which has led to rising planting costs for many farmers and higher coffee prices.

At present, the international market is still very optimistic about the Colombian coffee market, because since the beginning of this year, Brazil and Vietnam have experienced bad weather, resulting in a sharp drop in coffee production, although Colombia has also experienced a period of drought, but the impact is not significant. Coffee production continues to rise. However, Colombian coffee production is not enough to make up for the shortages caused by Brazil and Vietnam, so coffee prices remain high.

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