Coffee farmers in Colombia, the world’s No. 2 arabica producer, have failed to deliver up to 1 million bags of beans this year or nearly 10% of the country’s crop, leaving exporters, traders and roasters facing steep losses, industry sources told Reuters.
World coffee prices have soared 55% this year, mainly due to adverse weather in top producer Brazil, prompting Colombian farmers to default on sales clinched when prices were much lower in order to re-sell the coffee at higher rates.
“Traders are getting defaulted on, it’s a mess. If drought continues (in Brazil), 300 cents (per lb of coffee) is possible. It’s going to be mayhem,” said a dealer at a global agricultural commodities trade house.
He said leading global roasters are planning to change the branding on their ‘single origin Colombia’ coffees due to sourcing problems.