Coffee-Growing Nations Plan UN Protest as Slump Ruins Farmers

(Bloomberg) -- Presidents from coffee-growing nations are planning to use this year’s meeting of the UN General Assembly to demand higher prices from the world’s biggest roasters.

Brazil’s President Jair Bolsonaro is one of the leaders expected to join the protest in September, along with Colombia’s Ivan Duque, said Roberto Velez, head of Colombia’s coffee growers federation.

“It is not just farmers but also their governments that are complaining to the coffee-roasting industry,” Velez said in an interview in his Bogota office.

In 2019, Arabica-coffee prices have fallen to a 14-year low amid bumper harvests in Brazil, the world’s biggest producer. That has brought ruin to farmers across the developing world and has also boosted migration from Central America to the U.S., bringing Guatemala and its neighbors into conflict with President Donald Trump.

Roasters are currently paying farmers about 30% less for coffee beans than it costs to grow them, Velez said. He declined to say which companies he thinks are underpaying.

Starbucks Corp said in a written reply to questions that it pays coffee growers a “premium above and beyond the commodity market price.” It also opened a support center in Manizales, one of Colombia’s main coffee-growing regions, to help farmers cut production costs, boost yields and reduce pests and disease.

Nestle SA said in a written request for comment that “the present period of historically low Arabica prices due to a record Brazilian crop is causing hardship for many coffee farmers. It is not sustainable for the coffee sector in the medium term. We strongly believe that coffee farmers should earn a sufficient income to cover production costs and maintain a decent standard of living.”

Nestle said it has provided technical assistance to farmers to increase productivity and cut production costs.

Colombia may produce 13.8 million to 14 million bags this year, Velez said. That’s equal to about 8% of world output. A bag weighs A bag weights 60 kilograms, or 132 pounds.

--With assistance from James Attwood.

To contact the reporter on this story: Oscar Medina in Bogota at omedinacruz@bloomberg.net

To contact the editors responsible for this story: Matthew Bristow at mbristow5@bloomberg.net, Patrick McKiernan

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