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No new coffee agreement yet with Japan

Wednesday, October 04, 2017

JAPAN, the main buyer of Jamaica Blue Mountain Coffee, is yet to reach a new agreement with the country about coffee prices.

News of the delay, which resulted in local coffee processors who visited Japan recently returning to the island without a decision, was shared by Minister of Industry, Commerce, Agriculture and Fisheries Karl Samuda at a briefing at his New Kingston offices yesterday.

He said Japan is unwilling to continue paying US$60 per kilogramme for coffee.

The minister said, too, that the local processors indicated that it is very likely that the eventual price might be “marginally higher” than the 2014 prices.

“We were advised that two years ago the prices were in the order of US$34 per kilo, and over the last two years that rose to as high as US$60 per kilo... It is this resistance to this price that has caused them to push back on the supply of coffee to them from Jamaica,” Samuda told media and coffee stakeholders yesterday.

“They are insisting, from reports I've received, that we contain prices within the band of US$34 to as high has US$40 per kilo — which is far cry from the US$60 per kilo we got up to last year,” he added.

Additionally, Samuda stated that the Japanese have identified other producers of good coffee with lower prices as well as invested in better storage systems, allowing them to keep Jamaica Blue Mountain Coffee for longer periods.

He said that, as a consequence, farmers are now being paid $6,000 per box, unlike last year which saw them receiving in the region of $10,000 per box.

“The whole set of circumstances in which we meet is unfortunate; more so, we have seen an increase in the production of coffee from 201,000 boxes to 230 000 boxes and I want to pause to commend farmers for trying and giving of their services,” Samuda stated.

The agriculture minister maintained that there is still a lot to be done about the productivity levels for farmers, especially in light of the competitiveness of the industry.

“We can't sit on our laurels and believe because we have the best coffee in the world that the world is prepared to pay anything for it. Those days seems to have vanished and no amount of wishful thinking or pronouncement of skilful bargaining techniques will not move Japan from where they are at this time,” Samuda said.

The minister said, too, that he is aware of the disappointment caused by the drop in prices, which is why the ministry has been moving to address the issue, starting with farmers.

At the end of the day, according to Samuda, it is about having a sustainable coffee industry that consists not only of Blue Mountain coffee, high mountain and low land varieties as well.

He said in order for this to happen there must be an increase in productivity levels from farmers and, by extension, processors in order to move productivity from the current 20 boxes per acre to 80 boxes per acre.

Along with the diversification of the coffee markets, other initiatives identified included the allotment of $80 million from the ministry's Productivity Incentive Programme towards the purchase of inputs such as fertilisers and fungicides, as well as the provision of capacity building and training programmes.

He added that the ministry, under the soon to be realised Jamaica Agricultural Commodities Regulatory Authority, will impose a cess on imported roasted coffee beans and discontinue the importation of green beans.

“The objective will be to ensure the coffee produced here, blended or pure, is born of Jamaican soil. This business of being dependent on imported, cheap coffee beans, which are then blended with our rich Blue Mountain coffee, has to come to an end… we must work towards that objective,” Samuda said.

He also called on exporters to search and identify new markets in order to reduce dependency on a single market.