El Salvador Leverages Online Coffee Platform to Avert Impact of Coffee Price Crisis

A strategic partnership with online trading platform algrano and the El Salvador Coffee Council is gathering momentum after coffee prices have plummeted to a twelve year low on the future exchange market in New York.

The agreement between Swiss tech startup algrano, and Consejo Salvadoreño del Café (CSC) – the country’s national body representing more than 20,000 smallholder producers – aims to provide growers with direct access to markets in Europe.

Signed at World of Coffee in Amsterdam earlier this year, the collaboration is already coming to fruition with the first workshop involving a group of Coffee Council trainers conducted last month.

Technical advice and training on how producers can effectively market their coffee to specialty coffee roasters is now being disseminated to its members. The Council will be rolling out the training through online support and targeted events to producers before this year’s coffee harvest begins in November.

Key account manager at algrano, Peter Lerch, says: “The bottom line is that smallholder producers are being hit the hardest by these extremely low market prices. Growers are now facing the reality where they are in negative income and cannot even cover the cost of production. It’s already a critical situation and the true impact will only be seen in two years.

Although more than seventy percent of El Salvador’s coffee exports currently reach specialty markets worldwide and include high-quality certificated coffees such as Organic, Fair Trade, Rainforest Alliance amongst others, the country is also still recovering from the coffee leaf rust crisis that swept across Central America in 2012.

Peter adds: “Amongst the many structural and climatic challenges that producers face, one of the main barriers to farmer profitability is that they remain largely dependent on the stock market price mechanism to negotiate their coffee price before it leaves the farm gate”.

El Salvador’s coffee exports are crucial to the country’s economy and the Ministry of Agriculture is now taking ambitious steps to revive the sector back to previous levels when coffee was once a primary source of revenue for the country.

Executive Director of the Council, Hugo Hernández, says: “One of our priorities is to help reduce the dependence on the market price as producers take advantage of the digital tools available that facilitate the direct marketing of their product to new markets. Our alliance with algrano helps producers to directly negotiate their coffee in a fully traceable and transparent way. The platform represents a more sustainable market option for Salvadoran producers, and takes into account the excellent quality of their coffee that is widely recognized by specialty markets around the world”.

The CSC will present their partnership with algrano to the International Coffee Organisation (ICO) when the world’s coffee producers meet in London on 19th and 20thSeptember to discuss the current market price crisis.

As part of the strategic alliance, a field trip by some of Europe’s leading coffee roasteries is currently being planned for early 2019 as algrano and the Council seek to strengthen direct business  relationships with producers and buyers over the coming years.

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