Perky prospects push local processors

Christopher Serju, Gleaner Writer

Local processors of Jamaica's luxury Blue Mountain brand are backing the industry to make a strong comeback, even as prices continue to fall in the once lucrative Japanese market which traditionally absorbed some 85 per cent of the premium green (raw) beans and 65 per cent of the overall volume exported. Jamaica does not export any processed coffee to that country.

The sluggish state of the Japanese economy has forced down the price of Blue Mountain coffee, director general of the Coffee Industry Board (CIB), Christopher Gentles, admitted, leaving Jamaica with little choice but to yield to the demand for a better deal.

"We had to give in to them, we had no choice. The market rules," he told the Financial Gleaner during Monday's tour of farms and three processing plants in the Blue Mountain coffee-growing area by representatives of the East Japan Coffee Roasters' Association, who are slated to leave today. The purpose of the week-long visit is to give the group a first-hand view of the conditions under which Blue Mountain coffee is cultivated and processed.

Gentles went on to explain that the visit is a culmination of discussions started in Japan last September when a Jamaican delegation comprising members of the Jamaica Coffee Exporters' Association and CIB visited. Three months later, the Japanese raised the question of an adjustment in the base purchase price .

"We had requested a price increase in 2008. What they requested was a rollback to that, to a position that would make the coffee more attractive, given the softness of the market. The CIB, in consultation with the players and the Ministry of Agriculture and our market, has seen it fit to confirm that," the director general explained, declaring that it is now official that the base price of beans going into the Japanese will be, on average, eight per cent lower than they were in 2008.

"There are various prices, but for the green bean Number One, which is our standard-bearer, the base price on that was US$27.50 per kilogramme, down US$25.30 per kilogramme. The fact is, as well, that we have had to have a rationalisation of the grades. So rather than have many different grades, we are focussing on our Number One and our non-premium as the two standard-bearers.

"This is for the Japanese markets. We've maintained our standard variations but for non-premium category, the cost per kilogrammes is US$20.59, and so, this will represent a reduction in revenue for our coffee dealers and farmers," Gentles pointed out.

However, despite this, optimism among some of the major players directly involved in the cultivationand processing of Jamaica's Blue Mountain coffee remains high.

"I have every confidence that it will return. I have seen it where it is today and have no doubt whatsoever that it will rebound again," St Clair Shirley, chairman of Stoneleigh Coffee Processors Limited told the Financial Gleaner on Monday, during a tour of his state-of-the-art processing facility at Mavis Bank. Shirley, who has been involved in coffee farming for some 30 years, explained that not only is he prepared to stay the course but also further invest in ensuring that Jamaica capitalises on the resurgent coffee market.

His comments came during the tour of Stoneleigh's state-of-the-art processing facility by the group which is an affiliate of the All Japan Coffee Association, that oversees the purchase of all coffee imports, the total value of which is estimated at US$2 billion annually.

Meanwhile, Richard Sharp, managing director of Clifton Mount Estate Limited which processes beans for export and operates the local Café Blue franchise, was equally upbeat about the future of the Blue Mountain coffee product.

He explained that the fall-off in price was a natural consequence of the global recession which had similarly impacted most luxury items worldwide. Sharp noted that after enjoying an excellent 30-year run, an important lesson for those involved in marketing the Blue Mountain brand is the importance of diversification.

During the tour of the Clifton Mount processing plants, the group heard about how the purified spring water used in washing and processing the coffee is recycled. In addition, all the coffee pulp is also used to make organic fertiliser by way of vermi-composting, thereby reducing the amount of organic fertiliser. For these and other ongoing green practices, the company has recently been granted Rainforest Alliance certification.

The importance of this international green certification is that in addition to preserving the environment, it also seeks to protect the rights of workers. Coffee farms must maintain (or restore) natural forest cover to achieve 40 per cent shade coverage. The standard calls for at least 70 trees per hectare (about 2.5 acres) and at least 12 native species. Farmers are not allowed to alter natural water courses. While they can use chemicals, such as pesticides, they must maintain buffer zones of natural vegetation between the crop areas and areas used by humans, including public roads.

Posted throughout the coffee fields and strategic points at the facility were signs clearly underlining the importance of adhering to proper safety standards whenever handling, transporting or using chemicals on the property.

Sharp explained that Clifton Mountain had invested also in educating its workers about how their on-the-job practices impact the final product. The workers, in turn, he said, were very enthusiastic about how their input was being reflected in the final product.

The final leg of the tour at the Mavis Bank Coffee Factory provided insight into the marketing strategies which had catapulted its Jablum brand to international acceptance. Managing Director Senator Norman Grant explained that even as they await outcome of the pending divestment process, workers remain committed to maintaining the high standards for which it has become well-known.

christopher.serju@gleanerjm.com