Coffee Service

Colombian coffee farmers default on sales

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October 12, 2021

Colombian coffee farmers have been unable to deliver up to one million bags of coffee beans this year, about 10% of the nation's crop, leaving roasters, exporters and traders facing steep losses, according to a report in The Ararat Advertiser.

Global coffee prices have jumped 55% this year due to weather conditions in Brazil, causing Colombian farmers to default on sales made when prices were lower to re-sell at higher rates.

One trader said global roasters will change the branding on "single origin Colombia" coffees on account of sourcing issues.

Colombian farmers claim they will deliver the coffee later in the year or next year, but buyers are doubtful.

Traders can usually sell the coffee they are owed at current high rates to offset futures market losses, but they can't in the case of a default.

Global trade houses expect losses of $8-$10 million on undelivered coffee, according to one source, while Colombia's coffee growers face even higher losses.