Colombia is one of the world’s most significant producers of washed Arabic coffee. The sovereign country has called for a worldwide standard cost of two dollars per pound of coffee beans.
This was done in an effort to ensure that growers will receive the money via a guaranteed salary. This salary is also expected to cut down on the risk of farmers turning their backs on the sector, as a whole.
Colombian Coffee farmers have been confronted with a dilemma in the last few months. This issue arose due to lower international pricing, which in turn caused the government to set aside over $79.5 million dollars for assistance, debts for farmers, and the general upkeep of the coffee plantations.
As claimed in a declaration presented by The National Federation of Coffee Growers, the international price of coffee has fallen unexpectedly within the past few days.
In fact, the price tanked at just over 88 cents per pound, which is the lowest that it has been in the past ten years. Due to this, cultivation is also at risk in several different parts of the world.
On the other hand, in locations such as New York, it is reported that a pound of Arabic coffee was retailing for $1.09 per pound. This shows just how drastic the pricing can be in several different locations at the same time.
In February of this year, an idea was proposed in an effort to release a possible decoupling of the highest quality production of Arabic coffee.
The New York pricing would be used as a reference point, in an attempt to ensure that the price of the product remained above the overall cost of production.
Having said that, many experts, such as traders and coffee exporters, do not feel as though this would be a wise decision, by any means. The reality is that customers will send buyers to locate sources that will give them the goods they want for a lower price point.
The local price that is being awarded to the farmers is right around $254 for a bag of over 125 kilos of pure coffee. The production costs alone average up to around $243.
As a result, the farmers and their families are suffering, because they aren’t making the money that they deserve for the hard work that they put in.
More recently, that cost has seemed to remain less than the production costs. This means that the farmers are actually taking a loss on their products.
Due to the fact that the farmers aren’t making a good profit on their goods, more than 400 acres of coffee plantations have been lost. This is caused by the farmers simply abandoning the plantations, since they are no longer of use to them.
This is directly tied to the fact that the industry, as a whole, is being faced with the lowest prices imaginable, causing great concern for all who live in these areas.
More than half a million families rely on these plantations for their everyday needs, making the situation even more tragic, all things considered.