A piece by Hannah Hofmann, a member of our Melbourne team and green bean buyer.
It’s the time of year that we start to plan our green coffee purchasing for the coming year. While Brazil and Colombia are currently exporting their recent crop, in East Africa and Central America new season harvesting will begin soon. It is a timely moment to reflect on what 2020 has meant for our partners at origin.
It has without a doubt been one of the most challenging years in recent decades. That fact is universal and the global nature of the pandemic is really what has impacted our industry so significantly. In a normal year, if one consumer market slows, another might be buoyed, allowing for surplus green coffee to be exported to a different customer in a different market.
However, In March 2020 when Covid began to escalate, many roasters over the world were forced to reduce their purchasing volumes. In multiple cases what this has meant is that coffees that would normally have been sold on the specialty market had to be sold as commercial grades fetching lower prices than they might have normally, or perhaps weren’t able to be sold at all. Leftover, ageing coffee remaining in a country places a big risk to quality for the coming season, with the possibility that older coffees can be slipped in with fresh coffees hoping buyers won’t notice. For us, in a year where we can’t do our regular origin visits, we will be relying heavily on our long-term supply partnerships to navigate such challenges as these, coming up to the new season.
Fortunately, coffee has largely been viewed as ‘essential’; in most producing countries it is the livelihood of the population, and in consuming countries, it is, well, arguably our life-blood. While restrictions have hampered the normal logistical flow of export and shipping, causing bottlenecks in dry mills and a shortage of containers and shipping space, there has still been movement of coffee. We have been fortunate to receive our containers in reasonable time and certainly with our expected level of quality.
Delayed shipments can have a significant impact at farm level. The knock-on effect of reduced or delayed income in one season can put a significant strain on cash-flow normally used to invest back into the farm in ways like fertilisers to support good maturation for the next harvest or paying for manual labour on the farm; pruning, clearing and new planting among other aspects of farm management. While we can generalise about the effects of Covid globally, it is also the sharing of personal stories that help us to understand the day to day implications for our partners at origin.
In Brazil, our great friend, producer and supply partner Natalia has described 2020 as ‘The Year of Challenge’. Natalia produces and exports her own coffee. This year the biggest focus for her family has been at the farm, managing new plantations and negotiating a short, but very high volume picking season all while navigating covid restrictions. This year Natalia chose to employ some workers from the Northern part of Brazil, where unemployment was high and people have a reputation for good, hard work. These pickers travel many hours from home to the farm, two weeks in advance of starting work, to complete 15 days of self-isolation (and a negative test) before starting in the field.
At La Soledad in Guatemala, Raul and Jose have been planning logistics for hosting pickers for the coming season, starting in a couple of months. With distancing restrictions still in place, they are planning to construct extra accommodation to provide extra distancing measures, and they will need to build hand-washing facilities around the farm. They are predicting increased costs of providing transportation and food to their seasonal workers and will plan accordingly.
In Colombia, producers have begun selling coffee in ways they hadn’t ever before, selling cherry picked straight off the tree or partially dried, to local buyers instead of the usual ‘dry parchment’ product.
Of course, the pandemic has also impacted on currencies around the world and therefore on internal markets. In recent months, both Brazil and Colombia, the world’s largest coffee-producing countries, have been experiencing record high exchange rates with the USD. This pushes up the internal price of commercial-grade coffees, forcing coffee exporters focussed on quality and sustainable pricing, such as Azahar Coffee in Colombia, to suddenly compete with local buyers of regular-grade coffees.
We know that our close supply relationships built over the years will certainly show mutual value for us and our partners at origin in such a critical year as this. We are confident that the suppliers we work with really know the profiles and qualities of coffee we like to buy. We have every trust that our supply lines remain secure and are grateful for the flexibility and compassion shown to us in recent months. In turn, we aim to provide the value of loyalty and commitment to paying the right price coming into the new season.
The reality for all of us is that we don’t know what 2021 will bring, as government subsidies reduce for both individuals and businesses, and the pandemic ebbs and flows in waves around the world. However, we have all been trained this year in navigating the unexpected! We’re ready to support the industry in any and every way we can think of; both our supply partners at origin and our wholesale and retail customers here at home. We’ll roll with the punches and can’t wait to bring more fantastic coffees and celebrate the hard work and dedication that our friends at origin have put in.