Coffee habits are hard to break:

WA L L E N F O R D COFFEE Company Limited is predicting a 20 per cent market recovery in the next crop year, which kicks off in August, based on the response to lower coffee prices by overseas buyers.

The prediction is borne out by the report for the coffee division of the Jamaica Agricultural Commodities Regulatory Authority, JACRA, for the current crop year 2017-18, which indicates that production of Jamaican Blue Mountain or JBM coffee was up by 18 per cent or 29,687 boxes as of April.

Japan, the dominant source market for JBM, is also buying more coffee.

But JACRA also reports that while green bean volume was trending 41 per cent higher, its value was down 2.88 per cent; and that the crop yield, at 194,281 boxes, was already 31,704 boxes behind projection as at April, with three months left in the crop year.

Additionally, the export price of JBM coffee, at US$28.004 on average, is nearly 32 per cent lower year-on-year.

The prices paid to farmers have also fallen dramatically.

Wallenford CEO Mark McIntosh, for example, told the

Financial Gleaner that he is now paying $4,000 per box to farmers and had bought up 17 per cent of the crop. That’s down from the average price of $8,000 McIntosh said he paid last year. Prices paid by the industry were trending as high as $12,000 back in 2016.

The purchases by Japanese traders “started exceeding imports over other traders, even though the average price point – APP – for Japan is US$25.438/kg,” the report noted. The APP for other traders is US$33.808/kg.

JACRA reports that Japanese traders have so far bought up 69 per cent of coffee volumes, totalling 58,960kg, compared to just under 59 per cent the previous year.

Reasons for low yields

However, JACRA is also reporting “erratic” buying of coffee beans, manifested over three months to April 2018, which it predicts will lead to some coffee being left in the field. Purchases were 50 per cent less than expected in February and March.

The regulator cited cold weather at some elevations, as well as low production levels at government-divested estates, which are major producers of high mountain coffee, as contributing to the lower yields.

It predicts that the sector will miss its projection of 256,225 boxes based on the current trends.

“There are still reports of haphazard and ad hoc buying by processors, which can result in crops loss and stale berries being sold by farmers, which will impact green bean quality at processing time for export, etc,” the agency said.

A good chance

McIntosh says the market for JBM stands a good chance of recovery in 2019, and could see a 20 per cent rise in demand. He said, however, that the price paid to farmers would likely remain at $4,000 per box.

Wallenford is also pushing for a concerted approach to improving farm yields, which are the main source of coffee for export, saying they need more coffee seedlings and inputs such as fertiliser.

“However, they don’t have the money, so it hardly makes any point in mentioning it,” said McIntosh, pessimistically.

At Wallenford: “We have increased production on our farms – in some cases, it’s double the levels at which we received it from the Government – but we are still far away from our target. The desired production would be around 80 boxes per acre,” he said.