Challenging, but there is money in coffee

BY GARFIELD MYERS Editor-at-Large South Central Bureau

Sunday, May 17, 2015

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MANDEVILLE, Manchester - Dramatic fluctuations in earnings, sometimes from one year to the next, underline the uncertainties of coffee production.

In 2013, for example, according to the Planning Institute of Jamaica's Economic and Social Survey, Jamaica earned US$16.3 million from coffee. That was up from US$13.8 million in 2012. But 2014 earnings had fallen to US$12 million.

And in 2009, Jamaica's coffee exports were valued at US$35.7 million but by the following year exports had dropped to US$19.2 million.

Industry leaders identify drought, hurricanes, diseases, and variable demand among the causal factors for instability.

And even as a group from the regulatory Coffee Industry Board, led by Chairman Delano Franklyn, visited Jamaica Standard Products (JSP) coffee operations in Williamsfield, Manchester and Cave Valley, St Ann, recently, news was breaking about the Blue Mountain bush fires as yet another pitfall for coffee.

Fortunately, industry leaders say, 90 per cent of the much-prized, world- famous Blue Mountain coffee crop had been reaped before the fires raged. Nonetheless, immediate losses have been calculated at $60 million and, over the longer term, the effect will be much greater because of the extensive loss of trees and the need to replant. Coffee trees take two to three years to mature.

The Blue Mountain fires gave credence to a remark by Franklyn as he and his group made their first stop at Williamsfield: that coffee production is very "challenging".

Yet, as Franklyn and general manager of Jamaica Standard Products John O Minott explained to journalists, current prices mean coffee can be a very viable enterprise.

Minott told how farmers of Blue Mountain coffee are now earning $10,000 to $12,000 per box, up from $4,000 to $5,000 last September. That's also significantly up on three years ago, when the peak farm gate price for the Blue Mountain brand was $3,000 to $3,500 per box.

And while the price of High Mountain Coffee, which is produced outside of the Blue Mountains, is much less, that too has seen improvement to $3,500 and $4,000 per box from $2,000 and $2,500 eight months ago.

The price escalation reflects the high global demand for Jamaican coffee, especially the Blue Mountain brand. "Demand (especially in Japan) is far outstripping supply," explained Franklyn.

Grown in what naturalists say is a unique ecosystem provided by the towering Blue Mountains which embraces sections of St Andrew, Portland, St Mary and St
Thomas, Blue Mountain Coffee is hailed as providing a taste superior to any other.

That has made the Blue Mountain brand the most expensive globally, even when coffee prices are in depression, industry leaders say.

High Mountain Coffee, grown at high altitude outside of the Blue Mountains, lacks the same allure. Nonetheless it is hailed by Minott as probably the "second best coffee in the world".

Quality apart, Franklyn believes the attractiveness and "pull" of the national brand has enhanced the demand for Jamaican coffee, as it does for several other products.

For Franklyn, the big challenge is to double and triple the production and earnings from Jamaican coffee over the next few years. His ambition is to push production on coffee farms to 450,000 boxes over the next few years, up from the annual output of no more than 170,000 boxes currently.

That desire is motivated by what Franklyn said would be a series of familiarisation tours by the Coffee Industry Board, starting with the visit to what he described as "model" operations at Jamaica Standard Products.

"Producers like you have to up coffee production over the next few years," Franklyn told Minott.

"We really want to get back to the stage where we are able to produce 450,000 boxes to satisfy both local and export demand," he said.

Franklyn cited the Japanese market as "our most important external market".

However, he said, Jamaica could not restrict itself to reliance on Japan. Strong efforts were in the making to expand exports to China and elsewhere and, very importantly, to the Jamaican diaspora in North America and Europe.

Experienced producers such as Jamaica Standard Products must lead the way, Franklyn said.

Started by the late LO Minott and expanded by his son, Jackie O Minott, who remains as managing director and chairman, Jamaica Standard Products runs a coffee-processing factory at Williamsfield and operates the largest coffee farm in Jamaica, the Baron Hall Estate in Cave Valley.

According to John O Minott, Baron Hall currently farms 235 acres of coffee, but has a potential of 400 acres. JSP also operates the near 100-acre Blue Baron Estates in the Spring Hill region of the Blue Mountains.

In addition to processed coffee, JSB has developed coffee liqueurs for the high- end market.

Minott said that his company, which currently employs 200 people permanently and up to 500/600 at the height of the coffee crop, is in expansion mode.

"Right now, the industry's potential for redevelopment is great, demand is high, prices are the highest that they have ever been," he said.

He cautioned, however, that 'it is going to take some time ... coffee is a long-term crop".

"It's not going to happen in 12 months, it's another 24 to 36 months of investment before we start seeing true effects," he said.

Even then, he said, variables such as diseases and weather -- not least hurricanes and drought -- had to be borne in mind.

During the tour of Baron Hall, Franklyn and his team, as well as journalists, saw for themselves the effects of the berry borer, a minuscule beetle which destroys coffee berries, and leaf rust, a fungus which defoliates trees.

The leaf rust along with drought had much to do with the fall-off in Jamaica's coffee production last year. Industry leaders say chemicals and the development of biological agents to fight pests and diseases add significantly to the costs of production.

Franklyn and others from the Coffee Industry Board showed strong interest in nurseries at Baron Hall. The hope is that improved varieties of coffee seedlings will show greater resistance to diseases and pests without losing the essential qualities of the Jamaican brand.

Currently 60,000 coffee seedlings are in nurseries at Baron Hall with expansion to come, Minott said.

Franklyn pledged rigorous action by the Coffee Industry Board to regulate and protect the industry.

He expects that a soon-coming cess on imported coffee, agreed on by stakeholders and by government, will help. In the "last three to four years", there had been "an almost doubling of importation of coffee into Jamaica", Franklyn said.

Also, the Coffee Industry Board would be tightening up on the issuing of trade licences to facilitate genuine coffee producers. Down the years, he complained, the process had become far too loose, compared to many years ago when "you had to be engaged in the production of 10,000 or more boxes in order to be granted a licence".

The threshold gradually fell to 6,000 boxes and then fell "lower and lower over time".

"Regrettably, we had persons entering the trade and being granted licences who were not involved in the production of coffee, we are tightening up on that and we are going back to the position where the 6,000 (boxes) threshold will be the minimum ... before licences are granted," Franklyn said.

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