Coffee Farmers Achieve Price Premiums at the Best of Cauca Competition
In August 2018, international coffee prices averaged $1.02 per pound, according to the International Coffee Organization, the lowest monthly average in the last five years caused by increasing global supply, exchange rate fluctuations, and uncertain futures markets. In the face of this crisis, which threatens to dis-incentivize coffee production, the Producers to Markets Alliance program is mitigating the effects of price declines by promoting origin coffees to obtain price premiums for smallholders.
In partnership with the National Federation of Coffee Growers (FNC), PMA sponsored the 5th Quality Coffee Competition and Specialty Coffee Fair to identify the best coffees in Cauca. As part of the competition, regional judges cupped 126 samples, of which 47 were shortlisted with a cup score above 84 points. The coffees were then auctioned in a live public bidding session with more than 1,000 farmers and buyers from Colombia, South Korea, the US, Netherlands, and Japan.
In total, the competition generated $71,379 in sales for 24,554 pounds of coffee, of which 87 percent were export sales. The average price of the 47 farmer lots was $2.91 per pound, nearly a 200 percent premium above the average global price.
Gerardo Montenegro, Executive Director of the FNC in Cauca, stated, “This event greatly increased regional farmers’ desire to produce high-quality coffees and proved to them that specialty coffee is a new market opportunity. The fact that the farmers could meet the buyers in person created great optimism and collective hope. PMA’s role was vital in bringing these international buyers.”
The international buyers were also satisfied with the event and the quality of the coffee from the region. Tim Chapdelaine, manager of North America for Trabocca, a coffee trading company from Holland, said, “The execution of the cupping, the auction and the export of the coffees was one of the best I have seen. I particularly appreciated the speed and clarity that PMA brought to the contracting process and the cooperation of the FNC in getting these coffees to us. The coffee arrived perfectly packaged as per instructions and promptly.”
Showcasing origin coffees to international buyers and creating connections between farmers and buyers are key steps in commercializing Colombia’s coffee. Events like the Best of Cauca Competition are the foundation for establishing sustainable export market linkages for smallholder producer associations.