Record coffee output in Brazil drives down prices and piles pressure on farmers. Coffee growers in Guatemala have abandoned farms while Colombian farmers have turned to coca, which is processed into cocaine.
All eyes in the coffee market are on Brazil, as record production levels have knocked global prices to near 12-year lows.
Brazil produced an unprecedented 62m bags of coffee last year, according to Conab, the government food supply agency. Conab expects production to fall this year, to 53m, but that is still a record for an “off-year.”
The country’s coffee growing has traditionally followed a cycle of biennial swings, with an “on” year of large production followed by an “off” year of low output as the trees recover. As such, there should be little respite for the world’s coffee farmers who have been struggling under low prices brought on by Brazilian output.
The Latin American country is often described as “the Saudi Arabia of coffee” because of its influence on prices. Brazil accounts for about a third of the world’s coffee output and has about a one-quarter share of the international export market.
New York coffee prices, a benchmark for bean trading, have rebounded from recent lows but have fluctuated just below $1.10 a pound. That is below $1.20 to $1.50, the levels that many farmers in Latin American countries need to turn a profit. Coffee growers in Guatemala have abandoned farms while Colombian farmers have turned to coca, which is processed into cocaine.