The Coffee Crisis
We live in a global village so like neurons in the brain everything is interconnected and if
one misfires then the whole network is vulnerable to harm. Today this impact is felt by a
choking of production and access to global resources, sending trader prices crashing.
It is not just Europeans who have been impacted by the sanctions but now even Latin
American Coffee farmers. Industrial farming requires fertiliser and lots of it, but as prices are
soaring, this has led to insecurity over declining harvests this year.
Bloomberg reports coffee farmers in Brazil, Nicaragua, Guatemala, and Costa Rica are
being hit hardest. Many farmers are now substituting organic waste as a low-cost solution to
nitrogen and phosphorus fertilisers. The move, however, will result in significantly reduced
harvests of the bean.
Story on the ground
Brazil, the world’s top coffee producer, imports more than 85% of its fertiliser demand.
Russia is the key supplier, and Belarus provides 28% of the total. High prices for the nutrient
and reduced shipments because of sanctions will only jeopardise the world’s coffee harvest
“The situation represents a mega emergency for our members,” said Fatima Ismael, general
manager of the Nicaraguan coffee cooperative Soppexcca in Jinotega.
In Costa Rica, Rodrigo Vargas, president of Doka Estate, said his farm needs 1,400 tons
of fertiliser to produce 40,000 bags of coffee each harvest. Due to the crisis less fertiliser will
be spread on the soil and therefore yields will be reduced.
Arabica coffee prices have already risen 86% over the last two years due to adverse
weather conditions affecting Brazilian harvests and clogged supply chains during COVID
creating logistical havoc and soaring freight costs.
So far the impact is not being felt so much on the street, but these are just the birthing
pangs, a precursor to a significant crisis? As such prices for arabica in New York are flat on
the year. However, in all likelihood prices will soon soar as fuel and fertiliser prices skyrocket.
With prices for crude oil up over 50% this is further exacerbating the problem.
Weapons do not just maim and scar their victims’ lives for generations to come. War in turn
indirectly impacts on transport, fuel prices and exposes our co-dependency on specific
suppliers for essential goods. In a world dividing production of cash crops into specific zones
for the benefit of a few, any short circuit can quickly become a systematic disaster reaping
suffering of course first and foremost on the world’s most desperate and impoverished.
Do we truly believe such economic modelling works for the betterment of the common
people? If not, why are they still putting forward the same ideas that have failed
generations? Do we demand change, or are we waiting until we are facing rationing and
starvation before we wake up?