The 2022 Colombian Harvest is Well Underway!
What does this mean for coffee buyers and how can you take advantage of temporary price reductions (as of November 11, 2022 pricing)?
2022 in Review
The internal buy rate offered to producers by the Federacion Nacional de Cafeteros de Colombia (FNC) continued to reach record highs through August 2022. Currently, it sits at just under 200% above the value it was at in March 2021.
Although the price has decreased over the month of October, into November, we can start to analyze these prices by noting the simple economics of supply and demand. In the immediate run-up period prior to 2021’s main harvest, there were unfavorable weather conditions that caused low yields and restricted supply. Government prices started to rise to encourage producers to bring coffees to their buying stations, while private buyers entered into almost auction-like debates to secure what little supply was left.
A Quick Look Back at Coffee Prices
A large proportion of commercial coffee producers, particularly small and medium-sized farms, sell their beans to local cooperatives or the FNC, rather than on the open market. Unlike in many other coffee-producing nations, the FNC offers producers an internal buy rate which is a guaranteed price at which it buys crops.
The internal buy rate offered to producers fluctuates daily and is determined by several factors – beyond simply what the current open market rate is for coffee in the global commodity markets. While the stock price of coffee does influence the Colombian buy rate, other significant factors make an impact specific to Colombian coffee. Most notable is the strength of the dollar against the peso. Additionally, there is the available supply versus demand with regard to the FNC and cooperatives having to fill futures contracts.
In March 2021 the buy rate hovered around 1,000,000 Colombian pesos per carga of parchment coffee, while 18 months later in September 2022 it more than doubled, breaking the 2,500,000 Colombian pesos per carga of parchment mark.
The FNC buy rate also acts as an unofficial peg for prices offered by local cooperatives and private buyers. This price is given as a minimum base price without any consideration for coffee quality and providing cash on delivery, i.e., net zero payment terms. Cooperatives generally pay a small bonus on this amount when certain quality guidelines are met. Private buyers, on the other hand, typically pay up to 20% over the base rate for traditional coffee with certain higher quality standards for export and possibly negotiated payment terms. This sent prices skyrocketing across the globe for any private buyer who wanted to secure Colombian coffee.
From September to November 2022
In September 2022, prices were at record highs, with one kilo of Traditional coffee around $8 exwork sale price. With the increase in the exchange rate to close to 5000 COP per USD, and a decrease in FNC buy rate driven by simple supply and demand, we are now seeing traditional coffee prices reduced around 13% exwork. For international buyers, this could be an incredible buying opportunity after months of endless increases.
Harvest in Full Swing
As we publish this page on November 11, 2022, the harvest is in full swing for many of our farms. We encourage any roasters looking to secure favorable pricing to keep in mind that the best tool you can have is harvest planning and staying in touch with us to secure supply at the correct moment. Book a call now with one of our experts to get your custom wholesale pricing quote, and learn about any new origins and processes that we can offer to you this harvest season!
Our Services for Small Businesses Includes:
- Expert consultation to understand your business’s needs
- White labeling services to start your own roasted coffee brand
- A communication channel that suits you best, from email, Whatsapp to Slack
- Full management of every step of the process
- Bilingual English and Spanish
- Regular special offers and promotions
- Original photography and origin stories
- No minimum order sizes
- Origin trips
Explore Our Colombian Green Coffee
To help make the selection process as easy as possible, we’ve categorized our coffee 4 groups for you to explore.
Traditional coffee from large estate or regional washed coffee.
Clean cup with traditional notes of chocolate and citric acidity. Some variance between smokey and woody notes as well as hints of red fruits.
Premium single estate or regional, washed coffee.
83+ points washed coffee, with a unique cupping profile and extra care taken during production, harvesting, and processing.
Special Process Coffees- Naturals, Honeys, Fermentations.
High scoring coffee with special process, distinctly unique cupping profiles. Micro lots crafted with extreme care and precision. Extra attention on processing methodology.
Micro and Nano lots of exotic varieties.
87+ points coffee. Exotic variety coffee with distinctly unique cupping profiles. Micro lots crafted with extreme care and precision. Extra attention on production methodology.
Explore Our Resources
Want to learn more about ordering coffee for your small business? Read our buyer’s guide to sourcing green coffee beans. Or download our free Ebook below.
Contact Us for a Intro- Consultation
Complete the below form and one of our coffee experts will be in touch to arrange a free consultation for your small business.