Colombia Coffee Report: Production Rebounds, Volcano Looms Large

Colombia, known for its exceptional coffee, is set to witness a rebound in production in the coming year. Despite facing challenges such as rising fertilizer costs, limited access to bio-based fertilizers, and aging coffee trees, the country is expected to see a 2.7% increase in coffee production for market year 2023/24, according to the recent USDA Foreign Agriculture Service (FAS) report. However, lurking in the backdrop is the looming threat of the Nevado del Ruiz volcano, which could potentially impact a significant portion of Colombian coffee lands.

Production Rebound after Challenging Weather Conditions:

Following a period of excessive rainfall and extended cloud cover during the La Niña phase, Colombia’s coffee production is projected to rebound in 2023/24. The expected output is approximately 11.6 million 60-kilo bags, thanks to improved weather conditions. However, this rebound comes with concerns regarding the long-term sustainability of production.

Challenges of Aging Coffee Trees and Renovation Incentives:

Colombian coffee farmers are faced with a dilemma—whether to harvest for short-term gain or invest in the renovation of aging coffee farms for long-term sustainability. The USDA FAS report highlights that the area planted with coffee trees younger than 24 months fell short of the target set by the Colombia’s coffee growers association, Fedecafe. Encouraging producers to undertake coffee renovations becomes crucial as the lack of renovation will impact productivity and profitability in the medium and long term.

High Fertilizer Costs and Lack of Alternatives:

The cost of traditional fertilizers continues to rise, posing challenges for Colombian coffee producers. To mitigate input costs, producers have been exploring bio-fertilizer alternatives, such as coffee subproducts, particularly for nitrogenous fertilizers. However, the availability of bio-fertilizers at scale remains limited, hampering their adoption among producers. Finding sustainable and cost-effective fertilizer solutions is imperative for the long-term viability of coffee production in Colombia.

The Looming Threat of Nevado del Ruiz Volcano:

A significant concern for Colombian coffee lands is the Nevado del Ruiz volcano, located near the borders of Caldas and Tolima west of Bogotá. The Colombian Geological Service (CGS) issued an orange alert on March 30, 2023, indicating a likely eruption within days or weeks. If the volcano erupts, an estimated 110,000 hectares of coffee crops—14 percent of the total planted area—may be affected. This potential threat underscores the vulnerability faced by coffee producers in the region.

Export Markets and Major Destinations:

Among the 41 countries to which Colombia exports coffee, the United States remains the largest destination, capturing over 40% of the market share. The European Union, Japan, and Canada follow as significant consumers of Colombian coffee. In market year 2021/22, Fedecafe exported an estimated 21% of Colombian coffee by value, with the remaining 79% exported by private stakeholders.

Colombia’s coffee industry is poised for a production rebound, thanks to improved weather conditions. However, challenges such as aging coffee trees, rising fertilizer costs, and the looming threat of the Nevado del Ruiz volcano need to be addressed for the long-term sustainability of the sector. As the largest destination for Colombian coffee, the United States plays a crucial role in shaping the market. Colombian coffee producers and stakeholders must work together to overcome these challenges and ensure the continued success of the country’s world-renowned coffee industry.