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Peru: Coffee Production Looks Strong for 2016

We’re hearing anecdotally that Peru’s coffee production is going to be strong this year, maybe even returning to levels not seen since 2011 before the dreaded coffee rust came.

It’s not just coffee though, other export crops are fairing well in Peru:

 

Peru to double its exports by 2021

According to the Exporters Association (Adex), despite the stagnation experienced in 2015, Peruvian agricultural exporters expect to double exports to USD $10 billion dollars in 2021.

The union’s goal for 2016 is to surpass the USD $6 billion dollars in exports, thus overcoming the USD $5.093 billion dollars and 0.06 percent drop over 2014 achieved in 2015.

According to data from Adex, 85 percent of the non-traditional agricultural exports abroad are of fresh grapes, coffee, asparagus, avocado, quinoa, fresh mangoes, organic bananas, and paprika.

Worldwide, Peru is the number one exporter of asparagus (fresh, frozen and canned), quinoa, and maca; the second biggest exporter of asparagus and artichokes; the third biggest exporter of organic bananas and dried paprika, and the fourth largest exporter of table grapes and paprika powder.” Read more

Is Peru Firing Shots in the Currency Wars?

The Peruvian Sol

In today’s Gestion is an article regarding comments by Eduardo Amorrortu of Peru’s Association of Exporters, who says the Peruvian Sol needs to fall further in order to remain competitive.

While Brazil and Columbia currencies have fallen considerably more than Peru (Brazil 2.66 vs dollar at the beginning of the year- now 3.51, Columbia then 2377.50 – now 2960.89, both had fallen double digits before as well.)

The Peruvian Sol started the year at 2.985 vs the dollar (at this writing 3.23, having fallen even more since the China devaluation.)

As each exporting nation seeks to gain an advantage (which ultimately no one can,) China has fired the latest salvo in the recent devaluation, but already there are calls to respond:
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Peruvian Coffee Exports Down in April

 From an article in Gestion Peru: (Via Google Translate & authors correction)

Peruvian coffee exports totaled 40,371 bags in April, down 9.7% from the 44.685 bags of the same month last year, according to the Peruvian Chamber of Coffee and Cacao.

In the first four months of the year, exports fell 64% to 160,584 from 443,481 bags in the same period of 2014, said Luis Navarro, president of the group based in Lima. Each bag weighs 60 kg or 132 lbs.

According to figures from the Chamber, shipments in 2015 showed the slowest pace since at least 2005.

They (exports) experienced a drop amid low stocks remaining from the previous season, while the rains delayed the harvest that began last month and usually reaches its peak in July.

Peru is the third largest coffee producer in South America, after Brazil and Colombia.

Source: Exportaciones peruanas de café (Gestion via Google Translate) 

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First Coffee Workshops for Curibamba Growers This Week

This week we travel to Chanchamayo for the first in a series of workshops for the coffee growers there. This year world coffee prices are low, so our focus will be on coffee quality above all else. Our direct market philosophy doesn’t pay any attention to the bulk wholesale price of coffee, but to a sustainable, equitable pricing that allows for the growers to receive a just price for their coffee. Rather than have some good years, and then years of low prices and economic stagnation for the farmers, we pay a higher, consistent price every year. When prices are low like now, we can insist on better quality and attention to care of the new crop because we’re the best option that actually pays an ethical price. When prices are high though, we’re still able to get great coffee because we’ve built an actual relationship rather than just being another buyer.
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Peru News Roundup

Peru News

Fresh Peruvian Asparagus & Blueberries will be exported to the US according to a recent article in El Comercio. Both countries are developing systems to mitigate the risk of pests such as the fruit fly and allow more a more open process for exports to the US.
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More Uncertainty for the Peruvian Economy

 

Depending on who you talk to or read these days, the Peruvian economy is robust, or slowing. While officials remain upbeat & expect economic growth to be close to 5%, they missed the mark by nearly half last year. (see Why the Peruvian Economy Matters to the World) While the continued decline of the Sol vs the USD is supportive of export growth, the fact that 50% of all debt in Peru is denominated in dollars will offset any gains from a lower national currency.

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Real People, Really Good Coffee (Update February 2015)

It’s an exciting time for wanna be coffee importers. After successfully overcoming myriad obstacles, Yrma & I managed to get our coffee from the central rainforest of Peru to the Port of Callao in Lima, Peru, then on to Long Beach (where we encountered first hand what happens when there’s a longshoreman work slowdown,) from there to northwest Arizona & to select coffee shops in Kingman, Las Vegas, and Phoenix.
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Real People, Really Good Coffee (Update January 2015)

 

Back in the US

You may have noticed that it’s been a bit quieter on the site lately. We arrived back in the US late on January 11th, and have been running ever since.

Our coffee had been awaiting our arrival in the warehouse for East Bay Logistics in Rancho Dominguez, California just a few miles east of the Port of Long Beach. After searching for a reasonable LTL (less than truckload) carrier to bring our coffee to us, we ended up going to pick it up ourselves. The lower gas prices certainly helped this time. We were particularly blessed on this trip, as about 10 miles out of Needles. California, going down the steep hill into the Colorado River valley, we lost about a third of the tread on one of the trailer tires. It started to vibrate & we limped it into Needles and to a tire shop. We were surprised to see how bad it was & were grateful for the miracle of the day.

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