TRADING COFFEE

If you ask the blue-suited men in the New York and London commodity exchanges, coffee is a commodity that they trade every day and that is the subject to the simple law of supply and demand. That’s what we know determines the global coffee prices.

Many factors affect supply: the supply from Brazil may be affected by an unexpected frost, or the supply of Asia, by a drought in Vietnam. These two countries lead the world production of coffee. Brazil has been number 1 for years, and Vietnam is a close second.

In the Philippines, however, these world prices are not really followed because the demand is much greater than the local supply. We consume about 180,000 metric tons of while producing only 30,000 metric tons due to many factors. Added to this big disparity or gap is the development of the specialty market in the country.

THE SUPPLY CHAIN
Due to the inadequate supply of coffee, PCBI has endeavored to give farmers value for traceability, or to name the coffee source down to the village and farmer. This is coupled with lessons given to farmers in processing coffee for quality. Furthermore, PCBI and ACDI/VOCA launched Kape Pilipino, a green coffee quality grading competition, which led to the giving of scores to green coffee to signify its quality.

Next to traceability is process. Farmers learned different ways of processing coffee (the natural, honey, and washed processes), all of which result in the same coffee with different flavor profiles. This also drove up the prices as coffee roasters and enthusiasts clamored for the specialty processed beans.

The third factor is promotion. Coffee farmers were able to promote their coffee in exhibitions here and abroad, in Seattle in Washington, Singapore, and Bangkok in Thailand. This increased the demand in the region and overseas, further driving up the locally processed Robusta or Arabica. Robusta prices now range from 150 to 230 pesos per kilo while the Arabica farmgate prices zoomed to 350-700 pesos per kilo. Liberica beans, if you can find them, hover in the 250-300 pesos range, all still green and unroasted.

In a local Makati roasting shop, a 100g Matutum sells for 220 pesos, making the produce very special for a select market that likes to roast small batches of this prized harvest.

The online sales for green coffee have also risen. You will find them on Lazada and on the personal websites of coffee enthusiasts as well as on the websites of trading houses.

Even before roasting, these green beans have also upped their value. Hence, roasted coffee now sells a wide range of  prices, from a low 300 pesos per kilo in a market for coffee beans of unknown origin to 1,500 pesos per kilo of beans per kilo for beans with provenance and quality scores.

Philippine coffee has truly come a long way, and the news is there’s never enough supply for even just our local cafés’ consumption. Care to plant more coffee?

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Posted in October 2018, The Ultimate Coffee Guide and tagged , , , , .