First of all, yes, the situation in Brazil is very serious. I wish to share the feedback I am getting from my relatives in Brazil both farmers and city folk alike. Brazil is made of 25 states and the capital district and each state reacted differently. Sao Paulo state where all our farms are located was the first state to have cases, went in lockdown and is trying to be under control.
The drop in Specialty Coffee shops and it’s demand.
I received from both my coffee growing aunt’s Fernanda and Rita a message that the coffee consumption worldwide went up by volume, during the early lockdown. However, the worldwide stockpile of roasted coffee in chains like Starbooks, Pret Organic, Costa and others was felt by larger coffee farms and cooperatives that have access to those markets. Gabriel son, my close friend told me in the begging of lockdown 2nd week of March, how Australia was being affected. (Gabriel son, from Bom Jesus farm has a direct trade relationship established in Ozzy land). The farms that had access to Nestle, Illy, Lavazza, Stockler/InterAmerica, large cooperativees – like Cocapec, Cooxupe, have successfully sold the residuals of 2019/20 harvest to them.
The Exchange rate and Coffee farmers
The clearest impact on the day to day life os farmers was the spike in the U$D to the Brazilian currency R$ (Reais) on the months of March to May. It allowed the coffee prices for commodity type coffee to sit at a decent price for the farmers. The Farmers that at the time closed future contracts – agreed with buyers to sell their coffee in the future closed great coffee businesses. However, in June as the New Harvest 2020/21 arriving and USA manifestations started the great fall performed by the U$D and dragging the overall commodity coffee prices down.
Forecasts, New harvest and staff during COVID-19
The need for speciality market and direct trade will be exposed on the coming months. The harvest carried on in Brazil and most staff managed to carry on their tasks with self-isolation measures. The quality of the coffee is being truly remarkable. Yet the traditional exodus of farm workers moving from region to region looking for jobs in farms that do not have a fixed staff was completely stopped. As the government is subsidising their wages, with a universal benefit. What used to take 3-4 months to finish harvest might be extended for 5 months of harvesting, going up to mid/end of August. What might mean an over supply of great quality coffee when the world is exiting lockdowns in September. To keep paying the farmers independently from the fluctuating and volatile coffee markets the need for transparency and traceability will be highlighted by the world post- covid-19.