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into container. In additional, in many ports customs and CIQ
authorities are working with rotated/fewer staff. In inland
countries like Uganda, which is land locked, due to this fact
it is hard to get the necessary documents on time and constant
truck delays just add up to this situation and makes it harder
to cross the border to get to the port. For coffee that makes
Photo / Ben Garratt
its way out of the origin, cargo gets to the importing countries
at the port, conjunction at the port, limited resource for the
unloading, inbound and import and another series of chal-
lenges.
The pandemic has affected all stages of the supply
chain—from farm gate to harvesting, processing, domestic
and international logistics to trader/ warehouses and desti-
nation — every step has had an impact from the current world
situation.
Brazil, as the dominant coffee producer, still has plen-
ty of supply. A weak currency helps to ease the blow to
growers in the region, but Brazilian real (BRL) has fallen even
more, making this top coffee country more competitive. Data
shown in CONAB’s 2019 Minas Gerais farmgate report from
January 2nd, proves that when the BRL traded in as far as
4.00, the cost of production was only 78 US cents/pound,
the cost of production got to 54 US cents/pound due to BRL
devaluation. At the same time we had the Jul NYC futures
at 107 US cents/pound, local price 1.07 x Jan 2nd BRL would
only be 4.3. Just on the basis of foreign exchange rate, ex-
clusive of futures variation, spot prices are 40% higher for
the Brazil producer while using a cost of production argument
costs are lower in relative terms by 30%. Conclusion is that
it’s a very good business to grow coffee in Brazil.
On another hand, according to the median estimate of
12 analysts and traders surveyed by Bloomberg News in the
end of May, the largest Robusta producer in the world, Viet-
nam, and its coffee farmers and buying agencies probably
held 22% of the 2019-20 crop in their stocks through May,
Normally in Colombian and Costa Rican farms, as well though letting in more outsiders would challenge the ability compares with 25% a year ago.
as other Central America’s top exporter countries, growers to contain the virus.
would use pickers from neighboring Nicaragua, Guatemala In addition to the limited access to harvest labor, the
to harvest its mainly premium coffee, producing premium or pandemic is also not helping coffee farmers to get credit from
specialty coffees requires a lot of skilled workers though. local banks. New lending rates in developing countries have
With the measurements to fight contagion among countries, been increasing recently. Under the pressure of the increas-
those laborers probably won’t be available to make it this ing cost of production, farmers would have difficulties to get
season, despite how much those measurements are helping cash to buy fertilizers and pesticides, thus affecting the
with the social distancing, there are concerns for the com- output (production& prices), in extreme cases, it may even
pletion of the harvest in those origins. Even in Brazil, the lead to debt.
world’s largest coffee producer and exporter that known for Moreover, the export infrastructures have also had di-
its mechanical harvesting, yet some Arabica coffee and the rect impacts from the COVID-19, such as warehouses, relevant
entire Robusta coffee are still hand-picked, they of course authorities, domestic trucking, ports, access to containers
were also affected by the labor disruptions. Roasters and and so on, as well as indirect effects. These have resulted in
buyers will be unable to make their usual field trips this year. shipment and delivery disruptions and delays. For example,
The industry has been relying on easing of restrictions to in some ports, under the social distancing measures it’s al-
allow their seasonal workers to come back in the fields, al- lowed only one person at a time to go load the coffee bags

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