Falling coffee prices worry local industry
The Mzuzu Coffee Planters Cooperative Union has expressed concern over the low prices of coffee being offered on the global market, which it says may negatively impact on the future output of the crop.
Recent data from the International Coffee Organisation (ICO) indicates that the coffee market dropped to a two-year low in January, primarily driven by falling Robusta prices.
In its January 2016 report, ICO says that coffee prices fell further in January, with the monthly average of the ICO composite indicator down by 3.3 percent to 110.89 cents, its lowest level since January 2014 while the daily price dropped to a minimum of 106.74 cents on the 20 January, which is the lowest daily level since the 2 January 2014.
“This dip coincided with a broader rout in commodity prices, led by the collapse in oil prices. Coffee prices recovered slightly towards the end of the month, but remain at very low levels. This decline in the market was most pronounced in the Robusta group, which fell by 5.8 percent to 74.71 cents, its lowest monthly level since May 2010,” reads the report.
In an interview with Business News last week, the union’s chief executive officer Harrison Kalua said that low prices being offered on the international market would impact on coffee growers especially that farmers would need more money to sustain their farming activities.
“This does affect us as now the prices of inputs have gone up and only few farmers can afford to buy the required inputs for bumper yields. On average, we normally require about 15 000 to 20 000 bags of 50 kilograms of fertiliser annually, but now we are using about 5 000 bags,” said Kalua.
Kalua added that as fertiliser is a major component in coffee production, the crop output may be affected if farmers cannot generate enough revenue through sales to sustain their farming activities.
Kalua has since advised authorities to consider use of plantation agriculture as one way of mitigating the effects of climate change on coffee production.
Available figures show that there has been a downward trend in Malawi coffee beans production every year since 1991 when production peaked at 7 720 metric tonnes (MT) of coffee beans.
A recent crop estimates by the Ministry of Agriculture, Irrigation and Water Development indicates that this year’s coffee production is projected at 5 244MT.
The Northern Region has the biggest coffee cooperative in the country.
