Peruvian coffee grown under Fair Trade (FT) standards by producers organized in cooperatives located in regions of poverty and extreme poverty in our country is first among consumers in the US market, having sold 162 thousand quintals last year, or 25 percent of the 647 thousand quintals purchased from 24 countries of Africa, Asia and Latin America. These sales were worth 21 million 451 thousand dollars.

Peru’s leading position in this market niche dates back to 2004, when it overtook Mexico, which had till then led the world market of FT for many years. Our exports increased tenfold over the last 5 years, going from 15,400 quintals in 2002 to 162 thousand in 2006.

The average price for this kind of Peruvian coffee was 132 dollars per quintal, 32% above the national average for exports last year, according to a report by Transfair USA, an association that promotes fair trade by small-scale farmers in the United States as part of a strategy for combating poverty.

 “We’ve increased our sales of specialty coffees, including FT coffees, after several years of persistent efforts to achieve a high quality coffee. We’ve faced many difficulties before we were able to win over the trust of our US buyers, in addition to complying with social and environmental standards,” César Rivas Peña, president of the National Coffee Board, remarked. The National Coffee Board participated with a colorful and widely visited booth in the recent 19^th Fair of the Specialty Coffee Association of America (SCAA).

Rivas Peña informed that the Peruvian delegation included more than 40 coffee growers and exporters, many of which belong to 18 cooperatives registered as specialty coffee producers. “The US market has a growing annual demand of 15% for specialty coffees, which we could easily cover if we had the necessary infrastructure facilities for coffee production,” the coffee leader added.

“The cooperatives have made new trade contacts and have consolidated their relationships with old clients. In addition, we’ve build up great expectations over participation in the next fair, which will be held in April 2008 in Indianapolis,” Rivas noted.

Expectations with new Minister

Peru has 85 thousand hectares of certified specialty coffee crops -Rivas reported-, with an estimated production of 1.2 million quintals, of which some 900 thousand were sold in 2006. He explained that this extension includes the 75 thousand hectares or organic coffee crops, whose certification by internationally accredited companies is mandatory.

He confirmed that in 2007 exports will be reduced by 20 percent due to a low harvest in the coffee regions, specially in Central Forest, Cuzco, Puno, and the Amazon, where the harvests are likely to finish early.

The president of the National Coffee Board noted that the lack of financial resources for reconditioning or renovating 70 percent of the coffee production park has prevented the industry from taking advantage of the opportunity afforded by the good prices this year, and most families suffered economic distress due to the low harvest.

He said he hoped that the new Minister of Agriculture, Engineer Ismael Benavides, will back the agreements negotiated with former Minister Salazar, aimed at creating a fund of 20 million soles (about 6.1 million dollars) for reconditioning some 12 thousand hectares of old plantations located in areas of extreme poverty.

“We made it clear that we’re not asking for these funds as donations; our aim is rather that through credits channeled to commercially organized producers, these funds will return to the public sector as an intangible fund,” Rivas explained.

“As the experienced banker that he is, Engineer Benavides knows that loans are given to those who can repay them. We only want the opportunity to obtain a capitalization loan, and we are going to repay it with the harvest increase, both the principal and the interests,” he added.

Exports of Fair Trade Coffee to the US

Source: TRANS FAIR USA

Prepared by: National Coffee Board

National Coffee Board (JNC)

June 6, 2007

* 1 Quintal (QQ): 46 kg

National Coffee Board - JNC - Peru