ICO Member Nations Warn Of Dangers To Coffee From Volatile Prices

Posted On: 10/3/2016

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TAGS: International Coffee Organization, coffee prices, 6th Consultative Forum on Coffee Sector Finance, Colombian Federation of Coffee Growers, Juan Esteban Orduz

International Coffee Organization, coffee prices LONDON -- The 77 governments that are members of the International Coffee Organization hosted the group's 6th Consultative Forum on Coffee Sector Finance at the organization's headquarters here on Sept. 21. These forums are provided for by the International Coffee Agreement of 2007. This one was cosponsored by the Colombian Federation of Coffee Growers, and chaired by Federation president and chief executive Juan Esteban Orduz.

The purpose of the meeting was to assemble experts from the private and public sectors to discuss challenges facing the coffee sector, with a special focus on the profitability of coffee farming.

Key points raised during the session included recognizing that the challenges faced by the coffee sector vary by region and country, and that the industry must act now to address the effects of climate change and the social conditions of coffee growers, which have not improved with sufficient speed.

Panelists debated the need for an alternative mechanism for pricing coffee and the necessity of increasing the availability of innovative financial instruments for farmers of all sizes. Videos of the presentations will be available on the ICO website soon.

The ICO presented a new research concept note titled "Assessing the Economic Sustainability of Coffee Growing," a review of existing data on costs of production and profitability at the farm level in four countries: Brazil, Colombia, Costa Rica and El Salvador. ICO economists discovered that price volatility and increasing costs of production at the farm level have caused farmers to operate at a loss in certain coffee years between the 2006-'07 and 2015-'16 periods.

ICO executive director Robério Oliveira Silva said that more data and research are needed to better understand the economic viability of farms, and to help preserve the livelihoods of millions of farmers across the globe. The full study is available here and slides can be found here.

Founded in 1963, the International Coffee Organization is the main intergovernmental organization for coffee, bringing together exporting and importing countries to address challenges facing coffee through international cooperation. Its member governments include 42 coffee-producing and 35 coffee-consuming nations.