As of writing this, the price of Arabica coffee on the C-market is $.97 per pound, back under a dollar. Yet again. This isn’t news. The price has been hovering more or less around a dollar for two and a half years now; it hasn’t reach $1.50 since 2016. The price crisis has been a constant threat to the livelihoods of producers approaching a decade now. And now, Guatemala has announced its plans to leave the International Coffee Organization due to its inaction in the face of the crisis.
As reported by Reuters, the Central American country has “begun the process of leaving the International Coffee Organization” citing “concerns over the falling prices of the commodity.” Comprised of 43 producing countries and 33 importing countries—notably absent from this list is the United States—the ICO represent 99% of the world’s coffee production and 67% of its consumption, per their website, with a goal of “[strengthening] the global coffee sector and [promoting] its sustainable expansion in a market-based environment for the betterment of all participants in the coffee sector.” Some Guatemalan officials believe the ICO has not done enough to this end.
“The ICO had lost its way,” states Ricardo Arenas, head of the board of directors for Anacafe, Guatemala’s National Coffee Association. “It has needed to be restructured.”
According to Reuters, many of the country’s smallholder farmers, which comprise roughly 97% of all Guatemalan producers, “sustained losses in the current harvest,” this coming despite premium price points being paid for their coffees.
Though no official declaration of withdrawal has been given by Guatemala, the ICO expressed their desire for Guatemala to remain and instead to “work with other members to develop a new pact.” The ICO went on to note that they are unable to regulate the C-market, thus having no real control over the price at which coffee sells on it.
The next steps for Guatemala, should they choose to move forward with their plans to exit the ICO, remain unclear. Could this be the first step in the country removing their coffee from being traded on the C-market entirely?
Top image © Adobe Stock/DOC RABE Media