BOGOTA (Reuters) - Colombia’s coffee farmers are striving to sell their surging coffee output by getting a foothold in new markets in the Middle East and Latin America, and also by winning back disenchanted vendors who sell in the country’s traditional markets, the head of the growers federation said on Tuesday.
Good crop weather, increased fertilization, and the progress of a coffee tree renovation program will lift Colombia’s production to 10 million bags in 2013, up about 30 percent from 2012, and pave the way for higher output in the future, Luis Genaro Munoz told the Reuters Latin American Investment Summit.
But some buyers and roasters are disappointed with Colombia after five years of below-average output, and they have turned to other suppliers in Central America, Peru and Brazil. Winning them back and finding new buyers in untapped markets will be Colombia’s biggest challenge in future years, Munoz said.
“Obviously we’re working to recoup those countries that traditionally were consumers of Colombian coffee and they changed their mix as a consequence of the drop in production.”
Although the majority of Colombia’s coffee is exported to Europe and the United States, Genaro said that in the past two years Colombian growers have begun selling their beans in 12 new markets including some in Asia and the former Soviet Union, as well as in Australia.
The growers federation, which represents some 570,000 producers in the rapidly-growing nation, is also betting on an ambitious expansion plan for its chain of coffee shops, Juan Valdez.
At present Juan Valdez has 172 shops in Colombia and 43 more overseas. The company plans to open 15 shops in Peru this year, and 15 more in 2014, as well as three stores in the Mexican capital and several more in Florida, in the United States, and in Ecuador.
“It depends on the lawyers, but the company also aspires to open shops in the second half in ... Dubai and Kuwait, as a foothold in the Emirates. We’re also in China, selling through the Internet and studying the possibility of franchises as an expansion model there,” Munoz said.
Some 18,000 coffee growers are Juan Valdez shareholders, while producers earn a premium when they sell their beans to the chain. Although the volume of coffee the chain sells is small, it is helping to promote Colombian coffee around the world, and cementing the country’s reputation as the top producer of high-quality Arabica beans.
Munoz said he thinks the coffee output of other arabica producers in Central and South America is likely to shrink as they struggle with a devastating crop fungus known as “roya”, and older and less-productive coffee plantations.
The International Coffee Organization last month warned that an outbreak of the leaf rust fungus in the high elevations of Central America will have a more damaging impact on production than previously feared, forecasting 3 million 60-kg bags of coffee will be lost.
The leaf rust kills coffee leaves by sapping them of nutrients and drastically lowering bean yields and quality.
However, after renovating around 70 percent of its coffee plantations with varieties resistant to leaf rust that have been specifically developed for eight different regions, Colombia is now ready to take over the market, Munoz said, adding that a planned increased in fertilization will lead to higher yields.
“Without a doubt, we need to continue insisting on the need for fertilization in the country and we’re working toward that end. We want 2013 to be not only the year of (tree) renovation, but also the year of fertilization,” he said.
He said farmers are using about 350,000 tonnes of fertilizer a year and they want to lower the costs of buying fertilizer so that growers increase usage to 500,000 tonnes per year.
Genaro said some Central American countries have asked Colombian growers for the seeds they have developed, but that they currently do not have any available for export.
“The world is only starting to face the impacts of global warming on agriculture ... that requires knowledge and investigation and luckily we’ve been developing varieties for 30 years that are better prepared for global warming.”
Reporting by Eduardo Garcia; Editing by David Gregorio