Global Market Math in the Coffee Mountains

Ideas and Issues International

turkish_coffee-706008Marcala As hot and humid as it had been in San Pedro Sula and driving across the country, last night’s showers and a steady, gentle breeze at dawn at the crest of the coffee growing mountains was a lulling reminder of the grace of the campos.  The quiet and cool seemed everywhere as I sat on the rough, concrete porch in one of the COMUCAP cabins looking east.  Across the valley perhaps another 50 or 60 kilometers I was probably looking from Honduras to El Salvador.

All of this was good because we had spent hours the night before with managers and lawyers drinking coffee and trying to sort out what it took to get a better price for the women of the coop and how a partnership might work.  Hours later much was left for today.

The coffee market along with the rest of the economy is down and hard pressed.  Though all of the coffee is fair trade certified (lot of issues here and not a simple matter) and organic, the claims of better prices are hard to achieve even though the farmers are forced to expend huge hours of additional labor to bring the coffee to market.  The coop had added members since my last visit and now with Doris Guiterrez again, Dine’ Butler, and Emily Atterberry, we were trying to finally see face-to-face if we could figure out a way to forge a mutual partnership.  The coop felt they could produce six shipping containers filled with bags of coffee this season.  As always they started with no contracts but needed to make them by October for credit to bring the crop in.  Their main buyers had been in Germany the last several years where they sold two containers.  The Germans had offered to increase their price from $200 USD per bag to $220 and buy the whole harvest, but COMUCAP was uncertain and didn’t want to lock in a price if there was a better one coming in the market.  Even $220 per bag only would the farmers a small increase.  The price per pound for the coop was about $1.29 last season and even a 10% bump would only leave them around $1.41 per pound, even when such coffee was commanding anywhere from $9 to $13/pound in coffee shops in New York, Toronto, and San Francisco.

They needed to make more, we needed to make some which would support ACORN International’s organizing in Central America, and somehow we had to convince the market that this was best and would work for everyone.  The math running in my head throughout the evening was depressing.  We would need to get close to $250 per bag, and business being business, even if fair should be fair, it was hard to practically imagine the market allowing us a 25% premium on the year before.  The COMUCAP farmers and the ACORN International members had to do better, even if they could not necessarily do well.

The costs were stifling and the consumers were confused as well.  The certifiers were insistent with increasing mandates and requirements it seemed to me, but they could not guarantee the market or the price premium for the extra work.  Yet they required the coops to pay for the certification, and as middle men they were doing well.  The consumers had no clue how to sort all of this out, so the fuzzy distinctions between organic, shade grown, fair trade, and certified fair trade were so much gobbledy good, when the consumer was already paying close to $2 a cup to feel better about it all and get a shot of caffeine to the system.

Thank goodness for the breeze in the mountains, because there may not be enough hours in the day to sort all of this out so that it works for everybody.