It is estimated that 125 million people depend on coffee for their livelihood, from the farmers, to those in transportation, as well as roasters and retailers. Baristas and coffee shops were some of the first to close the doors when lockdown began. Despite this challenging environment, coffee lovers have still sourced their favourite drink, due largely to the resilience of coffee producers and the supply chain. Consumer purchasing of coffee remains buoyant – already the number one e-commerce grocery product before the pandemic – the growing trend for online coffee subscriptions is key to this success.
Latin America has faced many challenges in the wake of Covid-19; reported at one point to be one of the worst hit regions in the world. The coffee growing countries of Honduras and Peru were impacted by severe lockdown restrictions, which affected the entire production process. However, despite this, many farmers reported a bumper harvest, surpassing expectations. Nevertheless, the volatility of global coffee prices continues due to uncertainty in the market, with ongoing speculation about supply and demand. We caught up with our regional team to understand more about the opportunities and challenges currently facing co-operatives and communities.
Lending Manager for Central America, Marco Garcia, said: “During the first wave of Covid-19, the major issue for our customers proved to be buyers cancelling or postponing contracts, due to the uncertain demand caused by lockdown. With the exception of Nicaragua (where the government did not impose restrictions), a general challenge for our producers was to maintain operations, with travel restrictions affecting export. For the current season, we expect a less complicated scenario, since buyers and farmers have made adjustments so they can continue to trade.”
The high altitude and rich soils of the Copán region of Honduras, are perfect for coffee growing and farmers here produce some of the highest quality beans in Central America. In 2014, a group of 25 farmers came together with the ambition to export this premium quality coffee to customers worldwide. They became known as Cafescor, and since then they have grown their membership to over 400 coffee farmers. In 2019, they became a Shared Interest customer and began to focus their efforts on enhancing the quality of their coffee even further, and as a result, improving the quality of life for farmers.
General Manager of Cafescor, Herminio Perdomo, said: “Shared Interest finance allows Cafescor to continue supporting farmers with timely payments for their produce.”
We asked Hermino about the impact Covid-19 has had on the co-operative. He said: “During 2020, the general population had to respect strict travel restrictions that allowed each citizen to work only one day out of five, based on their national ID number. Therefore, staff attended the production plant on a rotation basis for some months. In addition, coffee co-operatives in Honduras had to request a special working permit that allowed the operation of the production facility and the transport of some staff members to the premises. In 2021, the government has not requested this special permit anymore. We have adapted our operations to continue with production plans. To date, we have gathered 90% of the forecasted volume for the ongoing cycle thanks to good planning.”