Coffee growers dispute claim of poor quality
Published:Friday | August 30, 2019 | 12:00 AM
Mavis Bank Coffee Factory, MBCF, a large buyer of cherry coffee, says the low price of $3,000 per box it is paying farmers for supplies is due to poor quality, but adds that the rate may improve as the crop year proceeds.
“MBCF started the payment at $3,000 because, normally, at the beginning of the crop the quality is very poor,” said CEO Norman Grant. The crop year began on August 7.
“As the crop progresses, we will assess the quality, and prices normally move up based on the improvement in the quality of the coffee as well as the confirmation of orders and the price,” he said.
But Donald Salmon, president of the Coffee Growers’ Association, JCGA, is calling out the processors, saying the pricing of coffee cherry based on quality tests is a new practice that began in the past crop year and is nothing but a ploy used by traders to make more money from the industry.
Salmon adds that it is serving as a disincentive to farmers, some of whom now leaving the coffee in the field un-harvested because they have no incentive to sell. The $3,000 is less than the economic cost of producing the coffee, he adds.
The labour cost for pickers alone is $1,500 per box, he told the Financial Gleaner.
Salmon said that to pay the farmers a low rate, processors would complain of floaters – that is, coffee cherry that don’t sink in water-based quality tests – and reduce the price per box proportionate to the volume of low-quality cherry. Consequently, a farmer may end up getting even $2,000 per box, he said.
Last year, Mavis Bank and sister company Wallenford also paid farmers $3,000 per box at the start of the crop, but increased that to $4,500 to $5,000 per box as the season progressed, said Grant.
“Four years ago, when the coffee was sold for US$60 and US$65 per kg, the local price was a weighted average of $10,000 per box. And now that the price of the coffee on the world market has dropped to between US$22 and US$28 per kg, the prices of last year was paid. The good thing for last year over the previous year is that the demand is tightening ... we are now seeing where demand is getting a bit stronger at the current prices,” Grant said.
The JCGA, which holds an export licence, is trying to source its own export markets and is currently doing direct trade in Japan, the United States and Europe, Salmon said. Sales were around US$100,000 for the past crop year, he said. Comparatively, the Jamaica’s coffee export market is currently valued at around US$12 million to US$15 million.
JCGA is aiming to break into the Chinese market, and is hoping to be added to the delegation being led by Minister of Industry Commerce Agriculture and Fisheries Audley Shaw to the China Expo in November.
The JCGA is also considering Russia as a market, but noted that conditions there could be problematic, due, Salmon explained, to fake Blue Mountain coffee on that market.
“We are working on it for the future,” he said.
Grant says the coffee crop was likely to improve in quality by around October/November, and that traditionally the crop is at its best in the months of January and June. The crop year runs from August to July of the following year.
In the past crop, 2018-19, “the quality was poor overall, with about 25 per cent declined in the outturn per box,” he said.
“Frankly speaking there is no easy and short-term fixes. We have to aggressively market the brand, keep the quality up and improving, diversify both market and product to increase valued added,” he noted.