Coffee exporters are seeking some $150 million per annum from the Ministry of Industry, Commerce, Agriculture and Fisheries’ (MICAF) budget to finance a recovery effort for the coffee industry.

According to chairman of the Jamaica Coffee Exporters Association (JCEA), Norman Grant, the recovery is necessary to stem the precipitous decline of coffee exports and the funds would be needed over a period of years.

Grant made the call in his address to the Inaugural JCEA Awards Banquet at the Jamaica Pegasus hotel, recently.

He said that in recent years there has been significant volatility in the pricing of coffee, due to demand/supply imbalances. Most recently, there was a run-up in the export price of Jamaica Blue Mountain coffee, resulting in a 100 per cent increase in price between 2015 and 2017.

“The Japanese importers took the volumes they had previously committed to, but the unexpected happened: Japanese consumers shunned the 100 per cent increase in price, and demand plummeted. The importers were left holding overpriced stock that they could not sell. Many of them incurred significant losses on the inventory they held, and the JBM (Jamaica Blue Mountain) brand took a beating, both with importers and consumers,” Grant explained.

He said that to repair the damage done in late 2017, the producers/traders in Jamaica had to accept prices from the market for coffee reduced by approximately 50 per cent, to help them recoup some of their losses and to rekindle the demand from Japanese consumers.

“This also resulted in a steep reduction in the cherry price to coffee farmers. The impact was not immediate, as the Japanese importers had to offload existing high priced inventory. However, that inventory is now finished and, since early 2019, the export demand has slowly started to return and we are actually seeing a slow but steady recovery of prices to farmers, as the market is now recovering,” he stated.

He noted that the Japanese market has been increasing their orders, but the current export price for green coffee (average US$26 per kilogram, a drop from US$60 per kilogram when the weighted average price to the farmers was around $9,000 per box) is not at a level that would allow for a sustainable price to be paid to farmers.

“The export prices need to gradually increase by 23-25 per cent over the next few years, to get to a point where it becomes sustainable for farmers to continue growing coffee,” Grant said, urging the Minister to seek the budgetary support which he sees as necessary to ensure a full recovery in the sector.

“In order to get there, the JCEA will be working closely with the partners in Japan, USA and Europe and, of course, the rest of the world to find not only the right price, but also the right pace of increase that works for the consumers, as well as for the Jamaican farmer/producer,” Grant added.

In his address to the meeting, Minister of Industry, Commerce, Agriculture and Fisheries Audley Shaw gave no assurance of a specific allocation to the coffee industry in the 2020/21 budget. However, he informed those present that the Government was discussing a possible US$100-million grant from China to redevelop the sector’s infrastructure.

“Jamaica’s coffee industry has seen quite a few jitters lately but, as with any other industry, that has productive and caring stakeholders, it has surmounted and is surmounting the obstacles,” he pointed out.

“The value and pride of place held by this industry cannot be overstated. Jamaica is known the world over for its unique and flavoured blends. It is for this reason that we must do all that is in our power to not just sustain, but improve the production and viability of our coffee,” he said.

“As we speak, the demand for Jamaica coffee in our traditional markets such as Japan, and emerging markets such as China, is growing at a pace faster than we can supply,” he argued.

Shaw produced figures showing that in 2017/18 Jamaica exported 536,840 kilograms of coffee valued at US$15.1 million. However, for 2018/19, so far, production is 235, 505 kilograms valued at US$6.7 million.

He said that production for those same years fell below what Jamaica has proven it can do from the halcyon years. In 2017/18 236,513 boxes of Blue Mountain coffee and 27,988 boxes of High Mountain coffee were produced. A total of 264, 500 boxes. Production so far for in 2018/19 shows that 192,959 boxes of Blue Mountain coffee and just 13,975 boxes of High Mountain coffee have been produced.

Shaw also announced a number of initiatives being pursued by his ministry to stimulate growth in the sector, including through a productivity incentive programme providing assistance in terms of supplies and training for the farmers, as well as a project to increase (coffee) trees density from 600-650 to 800 plants per acre.

Lifetime Achievement Awards were handed out by the minister to, John Oliver “Jackie” Minott, St Clair Shirley, Dr Charles Lyn, Richard Anthony Sharp, and Norman Grant. Host at the function was broadcaster Dervan Malcolm.

Also in attendance were: Diane Edwards, president of Jampro, and Dennis Boothe, and chairman of the Jamaica Agricultural Commodities Regulatory Authorities (JACRA).