Colombia Coffee Crisis: Farmers struggle with plunging prices

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Europe

02:20

Colombia is facing one of its largest crises in its pillar coffee industry. Tumbling prices have some calling for the creation of an OPEC-like cartel. CGTN's Michelle Begue has this story.

More than a half million coffee-growing families in Colombia are facing what industry representatives call a humanitarian crisis.

JOSE ELIECER SIERRA ANTIOQUIA REGION COFFEE REPRESENTATIVE "There could be a lot of coffee growers that will disappear, and then there would be social disorder, because some of those who don't see a profitable industry will migrate to other crops."

The International reference price for coffee has plunged more than 30 percent in recent years from a high in 2016 of around a dollar and 50 cents per pound to less than a dollar a pound in February this year.

And, while coffee prices have been tumbling, production costs have spiraled higher.

ROBERTO VELEZ, GENERAL MANAGER NATIONAL COFFEE GROWERS FEDERATION "The crisis has several agents, of course-a large production from Brazil last year. On top of that probably has been a big participation of speculators or investment funds in the New York city market that has brought the price to a lower point."

One proposed solution by the Colombian Coffee Growers Federation is to base the price of coffee on production, instead of trading on the New York Stock Exchange.

Another problem is contraband. Some growers say black market coffee is entering from neighboring Ecuador, Peru and Brazil and distorting prices.

JOSE ELIECER SIERRA ANTIOQUIA REGION COFFEE REPRESENTATIVE "There is low-quality coffee that, in theory, is entering for internal consumption. What we are asking the government is to be very careful in monitoring coffee standards, so that the coffee that comes in is not re-exported as Colombian, because that would do us more harm."

MICHELLE BEGUE BOGOTA "While the Colombian government has responded by reactivating subsidies and offering support to refinance debts, the federation says it is not enough. The federation is asking other coffee-growing regions to create a coffee version of OPEC-an industry cartel that will and set global prices for coffee instead of Wall Street. Michelle Begue, CGTN, Bogota."