Global coffee prices rise excite local growers
Coffee growers are anxious over improved global coffee prices which they say gives hope for improved earnings and sustained crop production.
This comes as the International Coffee Organisation (ICO) reported the monthly average composite price indicator rose by 7.1 percent to 99.97 US cents per half a kilogramme (kg) in June 2019, which is the first price increase in the monthly average since January 2019.
ICO reported that in May 2019, world coffee exports rose by 19.4 percent to 11.6 million bags compared to May 2018 while exports in the first eight months of coffee year 2018/19 rose by 7.5 percent to 86.57 million bags.
Earlier in May, Coffee Association of Malawi (Camal) feared the collapse of global coffee prices to $0.98 per pound (half kg), the first of its kind in decades was likely to affect the season’s earnings and future prospects.
However, in an interview on Tuesday, Camal chairperson Bernard Kaunda while describing the price improvement as positive news said buyers needed to offer more than the reported price increase.
Said Kaunda: “Most of our growers had already sold their stocks, there are a few who have not sold their produce. In as far as the price increase is welcome and good for growers but it is not significant to expectations, buyers need to push a little more than that.
“If you observe on the global market uptake there is 3.1 million kilogrammes surplus which is dumping the prices, mind you, the buyers are a bit shrewd and clever, they will use the surplus to continue pushing the prices down”.
He said growers believe the ICO will come up with strategies that create better opportunities for coffee growers and producing nations for sustained production.
Coffee is among the country’s cash crops.
Previously, coffee prices fetched around $1.20 (about K888) and $2 (about K1 480) per half kg but the prices according to ICO collapsed to $0.98 per half kg since 2006 when prices hit the record low $0.88 per half kg.
In 2017, $2.2 million was realised from export of 629 282kg of coffee, while in 2018, $2.1 million [about K1.6 billion] was realised from export of 639 176kg of coffee.
Camal said the revenue is expected to go up as some stocks are available in the country that have not been exported yet.
Current demand for Malawi coffee is estimated at 10 000 metric tonnes (MT) against production of less than a 1 000 MT. n
