Some Observations on the Recent Boom of Coffee in Colombia.

According to information as of september of this year provided by the National Federation of Coffee Growers, annual coffee production reaches 12.8 million 60 kg bags (mb) and its exports reached 11.9 mb.1/

But the country is far from the coffee production of 1.991 when it reached its maximum of 16.1 mb and was distant from the year 2.019 when it reached 14.8 mb. Likewise, exports in 2.019 reached 13.7 mb, a figure higher than that of the entire year, to september mentioned above of 11.9 mb.

Also, in several studies it is shown that in 1.967 coffee had the highest peak in the participation of Colombian exports with 67% of the total, then in the 70s coffee contributed with 54% of exports, while oil and its derivatives only added up to 6.0%. In the eighties, coffee had already lost its share, registering 42.0% and oil 13.0%. In the nineties, oil, with 21.0%, surpassed coffee, which participated with 18.0%. In the first decade of this century, coffee only accounted for 5.9% and oil 27.2%. Currently, coffee represents 7% and oil, coal and gold 51% 2/ 3/

The above is also explained by the global boom in fuels, which allowed them to gain a share within Colombian exports above the others including coffee, but the decline in Colombian coffee production is another explanation for the fall in its share. Another aspect that also explains the decline in coffee production since the eighties has been the hectares of crops, since in those years the crops revolved around one million hectares (from 1.987 to 1.994) and then decreased to 800.000 and 900.000 hectares and currently 840.000.

With the current high coffee prices of more than 3 dollars per pound 4/ (which includes the special premium for Colombian coffee) if the production levels were those of 2.019 and even more so those of 1.991, one could speak of a "coffee boom", although with reservations since then and currently there are characteristics related to the distribution of income. Indeed, several public and private studies have shown that 80% of the coffee growing families in question, numbering 300.000 or 400.000, belong to producers with plots of land of less than 5 hectares, while only 20% have higher levels, and 10% are large coffee growing areas 5/ all of which leads to coffee income being concentrated in a few producers.

In turn, until the mid nineties, Colombia was the second largest coffee producer and exporter, and since then it has been overtaken by Vietnam, and the world's leading producer and exporter, Brazil, has taken more distance. Another factor that explains the loss of markets is that Colombia is in arrears in opening to the production of robusta coffee, a variety that has had a boom in Brazil, Vietnam and Indonesia, and for this reason the country has lagged behind in coffee bean production. Studies have shown that the robusta variety grows in different terrains and at different altitudes than the soft Colombian Arabica variety, such as in low altitude terrain, and in Colombia there is geographic space, according to several studies on the subject, where these crops can be grown without confronting the geographic zones of the Arabicas.

With the production of robusta coffees, the country could recover the production levels of years ago and surpass them, which is not feasible with the current Arabica, which shows signs of saturation in fewer cultivated hectares, as was shown before, and because, in addition, that robusta coffee has a high world demand (a variety that is very resistant to pests), note the progress mentioned in Vietnam, Indonesia and Brazil, and Colombia could plan for more small and medium producers to enter this product within the lands assigned in the public land policy, as a way of improving income distribution in the sector 6/

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1/ 93% of the coffee produced is exported, so for internal consumption the country requires imports. That is to say, the remainder of Colombian coffee that is not exported allows for the consumption of gourmet coffee in stores and commerce, but most of the country's internal consumption in all its territories is made with products and brands made with coffee imported from neighboring countries.

2/ Green coffee represents 91% of the total coffee exported, so only 9% is exported with added value, which must be modified with public and private policy so that instead of exporting green coffee, the country simultaneously increases the export of coffee with added value, and also integrates the international chains of commercialization of processed coffee and possibly even the final consumer through links within the destination countries of Europe and North America and with the participation of Colombian producers together with the work of local exporters and with these subsequently also with the marketers in those countries.

It is a value added chain where the Colombian producer, whose coffee is currently bought at around 3 dollars per pound (the New York stock exchange price plus the premium for Colombian coffee) by local exporters including the National Federation of Coffee Growers (and also by multinationals that in turn sell it abroad), is also integrated into sharing the final price of consumption in the destination countries where a pound of coffee costs between 15 and 20 dollars and an American coffee in cafes depending on the location, if it is ordinary it is 2 to 4 dollars but in a historic place it can be worth 4 or 10 dollars per cup.

3/ Colombia must gradually replace exports of fuels such as oil and coal with mainly industrial and technological exports that have added value or also with added value in agriculture, since in the future of 30 years those products will be reduced in consumption worldwide. At the same time, the country must explore non polluting metals and gases as part of their substitution, such as copper, lithium and hydrogen.

4/ According to information for november 25, the pound of Colombian coffee is quoted on the New York Stock Exchange at US$3.29 per pound, a price higher than that of a year ago when it was US$1.94 and consequently the internal price of the purchase of coffee from the Colombian coffee grower reached $2.652000 per load of coffee on november 25 compared to $1.370.000 a year ago.

5/ The territorial extensions of coffee crops are related to land ownership in Colombia since according to studies and research, land ownership in Colombia has a Gini coefficient of 0.90 which is high and even higher than the Gini coefficient of income of 0.54, which is indicating a high inequality in land ownership higher than that of income.

6/ Robusta coffee is quoted on the New York Stock Exchange on november 25 at 2.42 dollars per pound, a price higher than that of a year ago when it was 1.24 dollars. Currently, there are no robusta coffee crops in Colombia that are purchased by coffee exporters with the goal of exporting worldwide, nor is there information on sales for domestic consumption, since, as mentioned before, coffee is imported from neighboring countries that produce this robusta variety to satisfy consumption in the national territory.