Sat | Jan 16, 2021

High mountain output brings down coffee market

Published:Friday | August 30, 2019 | 12:00 AM
Norman Grant, CEO of Mavis Bank Coffee Factory Limited.

Earnings from green bean coffee sales were hit by a double whammy of low prices and weakened demand, in a crop year that delivered increased volumes of top-end Blue Mountain, or JBM, cherries.

High mountain coffee production, however, fell by 50 per cent during the season that closed in July.

Consequently, green bean output was down marginally, sector-wide, and the estimated export earnings for coffee also declined and is now less than half of what they were four years before.

“Even though the quantities of JBM would be incrementally more because of the market demand, some grade-one coffee had to be sold into the market at lower price,” said Norman Grant, president of the Jamaica Coffee Exporters’ Association, JCEA.

Green bean export sales are projected at US$12.5 million for this crop, down from US$15 million in the 2018 crop year. The crop year runs from August to July of the following year.

Both periods substantially underperform the US$28 million earned from exports four years ago, when the selling price for JBM coffee was between US$50 and US$60 per kilogramme. “We are selling now for between US$21 and US$28 per kg,” Grant said.

The coffee association also qualifies that the US$12-million estimate for the past crop was based on preliminary assessment. But if it holds, it would be a new low for the sector.

For crop year 2019, unsold green bean inventory was roasted and sold on the local market in supermarkets and in in-bond or duty-free shops in the tourist areas. Some was also exported as roasted coffee, Grant said.

Production down

Total overall production of coffee in Jamaica for the current crop was 203,506 boxes, down 1.5 per cent from 206,533 in the 2018 crop.

Jamaica Blue Mountain accounted for 189,531 boxes, up 10,986 boxes or six per cent year-on-year, but those gains were offset by the decline in high mountain coffee, which yielded 14,013 boxes or just about half the 28,000 boxes produced in 2018.

Sixty-five per cent of the crop was exported as green beans and 35 per cent roasted, said the JCEA head, who also manages the large Mavis Bank Coffee Factory operation located in the hills of St Andrew.

Grant said that not only was output down in boxes, but the yield per box had also fallen – in a reference to beans that are rejected for not meeting quality tests.

“We normally get 4.4kg per box,” he said, but for this crop, “the weighted average outturn is 3.4kg” – a more than 20 per cent decline.

The Jamaican coffee sector comprises thousands of farmers. To assist with better yields, the JCEA wants the Government to inject $150-million worth of fertiliser and other inputs.

However, to receive assistance and to continue doing business in the coffee sectors, farmers have to be registered with the Jamaica Agricultural Commodities Regulatory Agency, JACRA.

Up to the end of July, some 4,167 farmers and 4,578 coffee farms were registered.

Grant said the JCEA had asked JACRA’s acting Director General, Gusland McCook, to allow unregistered farmers to continue selling coffee to processors, under the condition that the processors would assist in getting the outstanding farmers registered after the July 31 deadline.

The JCEA’s aim is to have ongoing registration for existing and new coffee farmers, and to reach full compliance by the end of crop year 2020.

JACRA has agreed, he said, that no coffee farmer will be prevented from selling coffee to licensed processors – a collaboration confirmed by McCook.