Demand for high-quality coffee puts pressure on growers
Battling everything from the effects of climate change to the high cost of fertilizers, farmers will struggle in coming years to grow enough high-quality coffee to meet growing worldwide demand, experts said at the annual World Coffee Conference held in Guatemala last weekend.
Special to The Seattle Times
GUATEMALA CITY — Battling everything from the effects of climate change to the high cost of fertilizers, farmers will struggle in coming years to grow enough high-quality coffee to meet growing worldwide demand, experts said at the annual World Coffee Conference held here last weekend.
Across the globe, consumers are more than ever asking for organic, Fair Trade, Starbucks C.A.F.E. Practices and other gourmet coffees, experts said. Those beans are going into lattes and cappuccinos served in the United States, Europe and increasingly in countries developing a taste for coffee, such as Russia and India.
The International Coffee Organization (ICO), which sponsors the annual conference, said 2010 worldwide demand for arabica and robusta coffee will come up about 10 million sacks short of the anticipated production of between 123 and 125 million sacks.
That will cut into consumer country stocks, which are already extremely tight, around 25 million sacks, the ICO said. (A sack weighs 132 pounds.) About 21 percent of coffee exports will be certified or gourmet, a classification that includes most high-quality arabica beans used in coffeehouses.
"Overall, world consumption continues to grow. And producers are struggling to keep up," said Ric Rhinehart, executive director of the Specialty Coffee Association of America. "We're nearing the razor's edge of danger where supply can't meet demand."
For consumers, that means the coffee that goes into a latte or cappuccino is likely to cost more in coming years.
That should be good news for the world's estimated 25 million coffee farmers, many of whom are poor and work steep mountainside plots by hand to grow coffees that end up with a Fair Trade, organic, Rainforest Alliance or Starbucks C.A.F.E. Practices logo.
The labels are meant to ensure customers that the coffee was grown under conditions that were good for the environment and good for farmers.
Farmers can earn extra for those beans — 20 percent or more than the going rate, which was around $1.20 per pound last month, according to the ICO.
But they also have to pay extra to become certified. And the stringent requirements, such as bans on chemical fertilizers for organic beans, mean their harvests are smaller.
"Price premiums mean nothing," coffee researcher Daniele Giovannucci told the conference. "What good is it to earn 20 percent more when your [production] is down by 25 percent?"
Giovannucci said about 16 percent of coffee imported by the United States last year was certified.
Ten years ago, certified coffees were considered a niche market promoted by socially responsible roasters. They represented less than 1 percent of U.S. imports.
But as consumer demand has grown, big roasters have taken notice. Sara Lee Corp., the world's second-largest roaster behind Kraft Foods, wants to buy all of its coffee from certified sources, Dantes Hurtado, president of Sara Lee's Coffee and Tea Brazil division, said.
"This is no longer a niche market," Hurtado said.
The company this year will buy 40,000 tons of beans certified by UTZ Certified, a Netherlands-based certification organization. UTZ says its certification ensures the beans are grown in a responsible way. Unlike Fair Trade, it does not set pricing minimums, relying instead on the farmers and roasters to directly negotiate a price.
Industry leaders say producers will find it increasingly hard to meet demand. The cost of growing and transporting coffee has increased steadily with the climb in oil prices. And the mountainous, subtropical areas that are ideal for growing coffee are already feeling the effect of climate change.
In the past 25 years, temperatures in coffee-growing areas of Latin America rose half of one degree, about fives times more than the previous 25 years. Weather was a major factor in the 28 percent drop in Latin American coffee production in the initial three months of the current harvest, coffee representatives said.
"The prospects for increasing production in places like Central America are not bright in my opinion," Rhinehart said. "There's been a consistent downward trend in production and an upward trend in sales."
The resulting supply pinch could drastically increase costs for retailers — such as Seattle-based Starbucks, which grew into a worldwide leader by selling gourmet coffee.
Furniture & home furnishings
AUBURN Couch, beds, end tables, dishes, TV ...
POST A FREE LISTING