Peruvian Coffee Production News - 2023
The current year has brought about a remarkably different scenario compared to the previous harvest, presenting a landscape of changes, opportunities, and significant challenges that must be confronted. The Peruvian coffee sector is at a crucial point in its development.
As of the latest available data, primarily collected from the northern region of Peru, the coffee harvest is in advance by 60%. The harvest has already concluded in the lower zone (up to 1300 meters above sea level), reached the halfway point in the middle zone (1300 to 1600 meters above sea level), and started in the higher zones (from 1600 meters above sea level and beyond). Additionally, it is noteworthy that 35% of the harvest has already been sold.
*Modesto Chinguel from the CEDROS cooperative cultivates the Caturra Amarillo variety at an altitude of 2000 meters above sea level in the Huaco - Huabal - Jaén area. His dedication to producing high-quality coffee has gained recognition from foreign customers who highly appreciate the flavor of his coffee.
Climatic Impact and Reduction in Exports
Contrary to what was estimated at the beginning of the year. Climate change and factors such as El Niño are impacting coffee plantations, coupled with weak demand, exports are expected to decline. During the first quarter of 2023, coffee shipments experienced a year-on-year drop of more than 70%, compared to the same period in 2022. Overall, total exports are expected to decline in 2023.
Price Trends and Market Concerns
Domestic coffee prices in several countries have significantly dropped compared to last year, and Peru is no exception. Since the beginning of the harvest, we have been witnessing a significant decline in domestic prices. However, this fall has been somewhat alleviated in the last few weeks by large programs at the origin with defined profiles and clients, which have managed to maintain better prices than the rest of the organizations. Nevertheless, there is still a prevailing downward trend in domestic prices overall.
European Market and Regulations
The European Union's new regulations are also causing concerns in the Peruvian coffee market. The EU now demands guarantees that agricultural products, including coffee, do not come from deforested areas and must be from recognized lands. This has raised concerns among coffee growers, as 80% of the coffee-growing lands in Peru lack proper title deeds according to the National Coffee Board (JNC). To ensure compliance with EU standards, there is an urgent need for a Plan for the Reconversion of Coffee Production.
It should be noted that 50% of Peruvian coffee shipments are destined for Europe.
For the past 10 years, Ecotierra has been developing a data-collecting app to enhance traceability from the field. Currently, we are considering the possibility of modifying this app to transform it into a reliable tool for buyers to demonstrate their adherence to the EU Standards. If you have any concerns or questions regarding this matter, please don't hesitate to contact us, and we will be more than happy to have a conversation.
Challenges from Pests and Diseases
The yellow rust plague has affected 26% of the current coffee production in Peru, which amounts to approximately 380,000 hectares. This outbreak has resulted in significant losses for small producers across 12 coffee-growing regions, amounting to over 330 million soles, according to information from the Peruvian National Agrarian Health Service (SENASA).
To address threats like the yellow rust plague, cooperation and sustainable practices are crucial. Moving forward, collaboration and innovation will drive the resilience and success of Peru's coffee sector. That is why we are developing large-scale projects at origin to improve agricultural practices. We invite you to join us in these agricultural endeavors for a thriving and sustainable future.
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