In the highlands of Ethiopia, coffee farmers are seriously thinking about calling time on an industry that has sustained families for a generation.
Over the past year, the amount farmers like Yoseph Lima get for a kilogram of coffee beans has fallen a third to 29 cents, reducing his income from a cappuccino sold in the West for US$3 to US$4 to under a cent.
Unlike producers of commodities such as oil and natural gas, coffee farmers have long suffered from being at the wrong end of the value chain.
“The price of coffee has certainly gone down. However, we cannot stop growing coffee just because the price has gone down. We are not going to be lazy. Even the price of gold fluctuates on the international market let alone coffee,” Lima said.
The industry has also seen a wave of acquisitions as companies such as Nestle, JAB Holding and Coca-Cola spend billions to boost their market share.
On Sept. 18, a kilogram of arabica fell to just 95.10 cents a lb, or US$2.09 per kg, a level not seen since December 2005 and less than a third of the peak in 2011.
A slump in global coffee prices to their lowest in nearly 13 years is raising questions about whether it’s worth growing beans at all in some of the traditional coffee heartlands of Central America, Colombia, and Ethiopia.
“If the price of coffee continues to fall like this, the situation will force the farmer to consider changing to growing other crops. So far they have not done that because the government is subsidizing them by making different contributions such as supplying coffee trees and providing training,” said head of Shebedino Agricultural Bureau, Tesfaye Dora.