Wednesday, February 15, 2017

Peace deal may help Colombia to produce more coffee

(Bloomberg)--For coffee growers in Colombia, which provide premium grains employed by names like Starbucks and Nestle, peace after 52 years of civil war means more productivity.
Just ask Astrid Medina. After her father was murdered by Marxist rebels a decade ago, she inherited your farm near the Andean village of Gaitania. At the time, only one-fifth of the land had trees in an area that outsiders were afraid to visit. When the army regained control, crop specialists arrived to teach farming techniques and more efficient banks have agreed to finance fertilizer and equipment. Medina has quadrupled the area of farms and doubled the production per hectare.
"Whenever there are problems with our crops-the arrival of diseases or weather problems-we ask for a visit from an agronomist and they help us," said Medina. She gives credit to the assistance of the National Federation of coffee growers of Colombia, which gave him the necessary tools to produce the beans that were elected the best in the country in 2015 by an international jury.
Now, a similar transformation may be possible in mountainous regions has long controlled by the revolutionary armed forces of Colombia (Farc). According to an agreement signed in November that took the President Juan Manuel Santos to win the Nobel Peace Prize-some 6,000 fighters are planning to surrender their arms. Although drug cartels armed drug traffickers who protect coca fields continue to be a danger, the end of violent conflict with the rebel group could help increase productivity in the country, which is already the third largest coffee producer in the world.
The Colombia virtually doubled production since the 2012 crop, which was the lowest in nearly four decades. Farmers, with the help of the Federation, replaced old coffee trees by other new and more disease-resistant, and planted more per hectare. The country intends to reap a harvest of 18 million to 20 million bags of coffee in 2020, up to 41% front of 14,200,000 last year. Each bag weighs 60 pounds.
There is no guarantee that the transition will be peaceful. The violent conflict with the Farc for the rights to the land lasted 52 years and left more than 200,000 dead and displaced milhões. There have been delays in setting up special areas where the rebels will deliver the weapons. In addition, the National Liberation Army (ELN), a smaller Colombian Marxist Group, and the Urabeños, a criminal organization, are some of those who are trying to occupy the former Farc territory and take control of your illegal activities such as drug trafficking.
Although it is illegal, the coke may have appeal to farmers because the buyers pay a fixed price and the plant produces four harvests per year. The trees yield just one or two. Besides, the coke plant is also stronger, able to withstand periods of drought.
However, the coffee Federation remains optimistic. Arabica coffee contracts sold in dollars in New York have risen 16% since the end of 2015, and the weakness of the Colombian peso vis-à-vis the US currency encourages farmers to produce more. This can have a greater impact on the speed of growth in production, according to the commodity broker INTL FCStone. The Arabica futures retreated about of 1,1% on Monday, to $1.4655 per pound-weight.
"It all comes down to price and revenue of producers", which will be the biggest influence on how much the crop of Colombia will increase, said Albert Is, Senior Vice President of INTL FCStone.
Bloomberg - 14/02/2017
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