Our colleagues at Daarnhouwer have just filed a report on this year’s crop in Colombia. Some highlights:
We went on a tour to Colombia in January. First visiting our Fairtrade / organic suppliers in the Sierra Nevada area. They have been performing well and the quantity and quality of the coffee has increased during last year. We see positive outlook for the main crop starting in October. In this area there is only one harvest per year, so no mitaca .
The main crop in other areas has ended as well and the coffee flow has diminished for now. Exporters just fulfilling their contracted volumes and reluctant to make new offers for shipments Feb/ March .
The weather conditions in the region Risaralda, Quindio and Caldas have been extremely dry the past months, also Antioquia reported 60% less rainfall and in Huila rains are about 70% less than the historical. Some rains were reported during January and flowering appeared, however more rains are needed in the next weeks in order to support the development of beans for the mitaca crop (May/June/July 2016 )and also the flowering that will prepare the main crop of the last quarter of 2016.
The Mitaca will bring a new flow of coffee and the volume is expected to be good but due the continuous drought, the quality remains an issue, which means: more defective and smaller beans than normal. More coffee in parchment is needed to come up with a 70 Kg bag of exportable/good coffee which makes the production of good exportable coffee more expensive and more time consuming.
Differentials for Colombia excelso and supremo have gone little by little which make exporters even more careful/reluctant to offer for future shipments. Anything they sell at current prices for future shipments could result in covering this coffee at a loss.
We’re starting to see a similar situation to what played out in Brazil for the 2015 crop, as detailed here. If this scenario follows a similar pattern, the best values in Colombia will likely be in Excelso’s rather than Supremos, as the latter will be in as short supply as 17/18’s in Brazil, and thus priced at a premium.
As always, ICT will follow the situation and present updates as events develop.