Government announces COP 100 billion as direct aid to domestic coffee price

·         The announcement was made at the end of the first National Committee of Coffee Growers with representatives of the new Government.

·         A permanent work group between the Government and the Colombian Coffee Growers Federation (FNC) was also announced to analyze and define the reference price from which the aid would be activated and the operating mechanism for delivery of these resources.

Bogotá, August 28, 2018 (FNC Press Office).-In the current price crisis, the Government of the Colombian President, Iván Duque, announced today resources worth 100 billion pesos ($33.6 million) in direct aid to domestic coffee prices.

The announcement was made at the end of the first National Committee of Coffee Growers with representatives of the new Government, where the 15 delegates of the Departmental Committees of Coffee Growers and the new Ministers of Finance, Agriculture and Trade, as well as the National Planning Director, have a seat.

A permanent work group between the Government and the Colombian Coffee Growers Federation (FNC) was also announced to analyze and define the reference price from which the aid would be activated (below 700,000 pesos per 125-kg load and up to 25,000 pesos per load (1 USD = 2.972 COP) and the operating mechanism for delivery of these resources.

In addition, the Government committed to disbursing new resources once the studies by the work group are concluded and the need for them is evident.

As President Duque promised during his campaign, the FNC has confidence that, in new meetings and spaces, concrete additional solutions can be found for a key sector of the country’s economy, the coffee sector, on which not only over 540,000 families depend, but other associated sectors.

In addition to this emergency measure, during the meeting other important issues were addressed, such as further analyzing the feasibility of an eventual Price Stabilization Fund.

Among the considerations that the FNC representatives brought to the meeting is the fact that, until mid-September, the international reference price for mild coffee (Contract C) completed 23 months systematically falling, from 160 cents per pound in November 2016 to 95.45 cents.

Consequently, the domestic base purchase price (calculated with the Contract C price, the quality premium and the exchange rate) has fallen about 19% in the same period.