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Organic coffee growers in Peru near breaking point

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Peru's coffee production will increase by 5% this season, but output is still well below levels seen before an outbreak of the rust fungus, with many farmers near to bankruptcy, US government officials said.

The US Department of Agriculture's Lima bureau forecast production in the 2016-17 marketing year, which begin in March, at 3.2m bags.

This is an increase of 5% from the previous marketing year, but is still 25% lower than the 2013-14 harvest, before a rust outbreak devastated production.

And the Lima bureau warned that producers are nearing breaking point.

"Low international prices and rust infestation have cornered coffee producers, particularly organic farmers," the bureau said.

Rust outbreak

Harvested area is seen remaining fairly flat, but yields are still under pressure from an epidemic of rust fungus.

"Peru continues struggling with the rust outbreak that affected plantations in 2014," the bureau said.

"Approximately 40% of Peru's total area planted has been affected."

Coffee rust does not usually kill trees, but damage to the leaves impairs photsynthesis, which reduces the energy available for bean forming, and hence yields.

Bankruptcy looms

Thanks to high coffee prices and the rust epidemic "most coffee producers in the central highlands of Peru are on the brink of bankruptcy," the bureau warned.

But while all producers are affected, "organic coffee producers are the most impacted".

Peru is the largest exporter of organic coffee in the world, with some 90,000 hectares devoted to organic production.

The bureau warned that "the price premium does not compensate farmers for the lower yields and soil depletion".

And the rust outbreak has hit organic producers particularly hard.

Organic growers "have to face total destruction of their fields since fungicides cannot be used to control rust" said the bureau.

"Unfortunately, Peru's organic producers are mostly poor, small-scale farmers that struggling to survive."

Steady consumption

The growth in domestic coffee consumption in Peru is seen steady with 2015-16 levels, at 160,000 bags, having previously doubled in the last five years.

Peruvian consumption remains low, at 600 grams per person per year, compared to two kilos in Colombia, and more than four kilos in Brazil.

The country's coffee exports are seen at 3.0m bags.

By Agrimoney.com

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