Coffee prices an 'embarrassment'

BOGOTA: Current international coffee prices of around $1.15 per lb are an "embarrassment," the head of Colombia's coffee federation said on Wednesday, and growers are struggling to make a living off the crop.

Colombia is the world's top producer of washed arabica. The growers' federation has repeatedly asked for government aid this year, amid lower domestic and international coffee prices and a once-strengthening peso currency that cut export income.

"Price levels of $1.15 are an embarrassment. Price levels of that kind are unexplained because I've not seen the cost of a cup of coffee go down anywhere in the world, nor that a pound of coffee has gone down in cost on supermarket shelves," federation head Roberto Velez told journalists.

Coffee-growers are barely breaking even with current prices, added Velez, who has said he would like a price of at least $1.30 per pound, with an exchange rate of 3,000 pesos to the dollar.

The peso was trading at 2,931.78 to the dollar on Wednesday.

The government has pledged $13.5 million for coffee tree replacement this year in an effort to help growers after wet weather damaged the harvest last year.

The federation expects the country to produce 14 million 60-kg bags of coffee in 2018, about 13 million of it for export.

The benchmark arabica coffee futures contract has dropped around 9 percent in 2018 so far, after falling more than 7 percent in 2017, and was trading around $1.16 per lb on Wednesday. Prices have been pressured by expectations for top grower Brazil to harvest a record crop and lift global supplies to a large surplus.