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ICO Survey of Coffee-Exporting Countries Shows Pressing Concerns
Nick Brown | July 2, 2020
The COVID-19 pandemic will continue to affect coffee supply chains as farmers and producers expect to experience prolonged labor shortages, increased production costs, diminished infrastructure and a reduction in commitments from buyers.
These are some of the takeaways from an International Coffee Organization report on an expansive survey of coffee exporting country representatives from 16 countries accounting for approximately 85% of the world's production.
Overwhelming majorities of these producer representatives reported that COVID-19 has or may negatively impact operations and exports, while they expressed uncertainty about how national production capacity will be affected over the next six to 12 months.
Furthermore, a majority of respondents expect diminished household incomes for coffee farmer families, labor shortages that may precipitate increased child labor and demand uncertainty as domestic consumption dips and international buyers shy away from new contracts, according to the ICO analysis.
All of this comes as global coffee prices remain at crisis levels, often not meeting costs of production at the farm level, while many national currencies are becoming increasingly diminished against the U.S. dollar. As of this writing, the ICE arabica futures price for September contracts (i.e. the "C price") was a paltry $1.030.
The ICE futures price for arabica coffee (i.e. the "C price") shown over the past 10 years. Image courtesy of Macrotrends.
The ICO report is the third in a series the London-based organization has released regarding the effects of the novel coronavirus pandemic on global coffee markets and producers.
In April, the group analyzed how a global recession might affect global coffee demand. Last month, the group documented the price volatility in the coffee market, while warning of the effects it may have on the most vulnerable populations in the coffee supply stream. This third report, capturing the sentiments of exporting country representatives during a survey period from May 20 to June 1, paints an even dimmer picture of the coffee sector at present and in the long term as the pandemic carries on, threatening the resiliency of coffee producers.
The full report contains a wealth of valuable data and visualizations, but here are some of the key findings:
Major Takeaways from the ICO Survey of Coffee Exporting Countries
One of the most common refrains among coffee producers since March has been concern regarding how social distancing requirements and travel restrictions may affect the availability of farm labor, particularly among farms that rely on large groups of migrant workers as harvesters.
According to the ICO's analysis of the survey, "the covid-19 pandemic has affected labour supply, either directly due to illness or indirectly as the movement of farm labourers and migrant workers is limited by social distancing measures, lockdowns and travel restrictions."
The group also said that respondents said the pandemic has resulted "in delays of shipment as well as increased trade and transaction costs."
In regard to the overall health of national coffee sectors, the ICO stated that a majority of respondents expect negative effects in regard to employment, total revenue, domestic consumption and export volumes.
ICO image.
Interestingly, responses were mixed regarding how total coffee production may be impacted. "The impact on coffee production at the time of the survey remains somewhat ambiguous, with almost two-thirds of the responding countries not being affected," the ICO wrote. "The impacts on coffee production might become more visible in the second half of the year, when more countries enter the harvesting season or liquidity constraints at farm level may lead to reduced input use."
Respondents generally had a negative outlook regarding household incomes in coffee-farming communities, with 70% of countries predicting decreased income from coffee and other activities, despite rising costs for production, for food and for healthcare. This, along with diminished access to seasonal labor, may result in several negative consequences, the report suggests.
"Households struggling with uncertainty and diminishing income may reduce investments in sustainable production and climate resilience," the ICO stated. "Some may — out of necessity — revert to harmful coping measures, such as child labour, a phenomenon being detected in other agricultural sectors with higher prevalence of unethical labour practices."
One potentially bright spot within the report was the perception that coffee processing and milling are not expected to suffer due to pandemic restrictions.
"Exporting countries are most concerned about the impact on internal logistics as well as on export infrastructure and processes, such as port operations, container availability, distribution and commercialization and customs operations," the ICO wrote. "Coffee milling and processing on the other hand appear to be less affected or vulnerable with 19% and 37% of the respondents expecting an improvement over the next six months."
While all but one of the 16 responding countries reported existing nationwide efforts to assist the coffee sector through COVID-19, what was notably absent from the report was a positive sentiment regarding the attitudes of international coffee buyers.
A full 45% of respondents reported that contracts had been canceled or changed due to the pandemic, a statistic that underscores the risk dynamic in the coffee trade that makes producers far more vulnerable than buyers.
"The concern expressed by almost half of the respondents that sales contracts were cancelled or changed requires attention," the ICO wrote. "In this regard, positive examples of buyers supporting coffee producers to minimize the negative socio-economic impact on farmers and their families should be highlighted. In addition, more long-term contracts could increase resilience and sustainability of the coffee sector in the future."
Tags: COVID-19, exporters, International Coffee Organization, surveys
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Hancher vs. Hilton
Cotton's Library
Brilliant Deduction
Playing from way behind
It is strange living in this moment, watching the capture and corruption of the most powerful institutions in our society, at the same time as day to day life mostly continues as though completely unconnected.
That's an illusion. A few weeks ago a friend, who knows better, casually said something about how "well, life goes on, anyway." I could have made a lot of responses. One which I didn't make, but might have, is a comparison with The Lord of the Rings films. For all that "The Scouring of the Shire" is an important part of the novel, its absence from the films combined with Meriadoc's warning about the possibility of such an outcome is haunting on its own. He was absolutely right that the safety of the Shire was in danger, and significantly, it was in danger from something that most of its people would never even notice until it was absolutely too late.
Had Sauron secured the One Ring, it would have meant the end of the Shire. Unstoppable armies would have burned it to the ground within months, or at most a year or two, inevitably. But that fate was being decided, with finality, while most of the persons at issue were carrying on normal life in total ignorance of the peril.
In a sense, Americans have had comparatively ample warning, yet most don't really notice it, and "normal life" carries on. Even though what's happening right now is locking in severe negative consequences.
This is difficult to summarize, and I'm not sure there is a point to attempting it, here. This and this are good, recent updates on how the system is being corrupted right now, in ways that will disable the comforting systems of honest dialogue and democratic feedback; by such time as many more people feel a sense of urgency, the expected tools for response will have been sabotaged.
In a way, we're already at an early stage of that, and have been since November 2016, at least.
Ages ago in another lifetime, I did things like spend hours playing through immersive video games, such as Ni No Kuni, which introduced me to the term "post-game content"; the phrase came to mind in late 2016 as I tried to make sense of the horrible situation confronting us. After you complete the adventure story arc in some games, you can continue roaming the virtual world and even going on some additional bonus missions. Everything since the 2016 election has felt like post-game content except it's after you lost, rather than after you won.
Obviously, there is no absolute, binary won-lost status for the real world, at least so long as people still exist with goals and some possibility of achieving them.
But it feels like we have reached a point where the word "possibility" is doing a lot of work, there.
The interlocking, reinforcing effects of vote suppression, malapportionment, unrestricted campaign spending, judiciary capture, epistemic corruption, etc., combined with a malevolent overmighty executive, create a system which makes reform from within increasingly implausible.
In a lot of ways, it feels like much of the right response is happening—just a dozen years too late. If all of these things that mushroomed in 2017 happened instead in, say, 2005: the grassroots activism, the efforts to recruit and support candidates for down-ballot races, the attention to the judiciary, redistricting, and other "wonky" complexities of power. If Democrats had introduced the For the People Act in January 2007, instead of January 2019. If a presidential candidate had run on big structural change in 2008, instead of now. If we had woken up and organized, instead of gratefully receiving the handsome, reassuring anesthesiologist's needle. If we had done some of this, sooner, we might have made some lasting repairs to the system, whatever else happened.
We didn't, and now here we are, trying to fight a substantially advanced fascist takeover with signs, postcards and clipboards. While those with access to genuine power which is still substantial are always reluctant to make full use of it, because… I can't even really explain it. With years of experience of utterly bad-faith opponents who constantly twist the maximum possible interpretation out of any authority they possess—and often more—Democratic leaders with any power to respond in kind consistently act as though they must uphold norms and courtesies anyway.
Every time they finally, grudgingly, concede that their patient good-faith response has met only abuse, said abuse has won for the right even more power, which will require even more drastic countermeasures to overcome; the cycle repeats.
Meanwhile, the political disparity between urgency and response is made more disastrous by a corresponding ecological disparity. Last month I read Alastair Reynolds' novel Permafrost, about a future in which Earth's biosphere has collapsed, and basically everything has died except for a dwindling population of humans surviving on a finite supply of preserved food. What struck me most is how it didn't even seem like a worst-case scenario. The collapse of the biosphere is happening, right now, and even more so than political sabotage it won't be possible simply to opt out of the process whenever more people notice it. Even setting aside Permafrost's time-travel fantasy by which humanity's doom is averted, the novel's starting point seems also relatively optimistic: humanity's condition is terminal, but it has responded by organizing for itself a peaceful, gentle hospice ending. I suspect that a descent into resource wars, barbarism and depravity is at least as likely.
So I vote and organize and write letters and make calls, etc., and demonstrate some, though in answer to everyone crying "when do we erupt in protest already" I would say that I was there two and a half years ago, and kept at it as the number of other participants dwindled and dwindled.
I do things, all the same, because I think that's the only response which makes sense to me. The other night a friend asked me "you have an escape plan yet" and my response was, to where? Between the impracticality of escaping the real problems that I perceive, and the feeling that I ought at least to try fighting them, that's where I end up.
Which still leaves me in a situation in which nothing really seems to make sense: I can't work out a realistic possibility of hope, I can't imagine that my small efforts make a real difference to those odds however much I do, and there's an inescapable unreality in the life which continues in the meantime.
I switch back and forth, between trying to spur action for the future of a just society and a habitable planet… and trying to win a suburban city council election or deciding whether or not to spend $20 on a book that I want.
Going back to my hometown and hanging out with family and old friends is almost more unreal than I can deal with.
At the same time, I suppose that for all that I have always been given to thinking ahead, looking at the big picture, worrying—and for all that I think these are important things which more people should do at present—living in the face of looming disaster has taught me to also live in the moment some times.
Tagged: climate change, doom, environment, politics
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