Colombian Coffee Industry 2021 Recap and 2022 Outlook

In 2021, coffee production in Colombia decreased by 9%. In 2020 production reached 13.9 million 60 kilogram bags and decreased to 12.6 million bags in 2021. There was a 19% production decrease in the 2021 coffee production year that runs from October to December, reaching a production of only 3.5 million bags compared to 4.3 million produced in 2020. 

Source: National Federation of Colombian Coffee Producers.

Colombia is still positioned as the third global producer of coffee, even though the 2021 production was the smallest since 2014. Colombia mainly produces Arabian soft coffee, also known as Arabica coffee, which is known for its premium quality. Coffee production has become extremely important for the Colombian economy as it represents 1% of the GDP. It also supports 560,000 families due to the high demand for plantation workers.

The decline in coffee production during 2021 was surprising because production had been on an upward trend since 2014. This decline is mainly attributed to the "La Niña" phenomenon that occurred during the second semester of 2021. This weather phenomenon produces cold and rainy weather that is unfavorable for coffee harvesting. Another factor that contributed to the production decline was the increase in the price of fertilizers. According to Tridge's industry specialist Gabriel Mejia Gutierrez, the price of fertilizers in Colombia doubled during 2021 which led to cease its use.

The Colombian economy was not greatly affected despite the decrease in coffee production. This can be attributed to the 130% price increase of Colombian coffee during 2021. In the international market, the 120-kilogram bag of Colombian coffee was being sold at the beginning of 2021 at USD 247 and reached a selling price of USD 570 in December. There was a global shortage of coffee, which contributed to the price increase, which generated a significant income for the country and the producers. 

Stable Colombian Coffee exports in 2021 despite production decrease

Despite the 9% decrease in production during 2021, Colombian coffee exports only decreased by 1%, going from 12.5 million 60 kilogram bags in 2020 to 12.4 million in 2021. During the coffee production year, coffee exports faced a larger decline of 9%, going from 3.6 million exported coffee bags in 2020 to 3.3 million in 2021.

 Source: National Federation of Colombian Coffee Producers.

In 2021 there was a National Strike in Colombia that led to blockades on roads and highways and affected coffee exports. As part of the strike, containers were imprisoned in the main ports and could not leave the country.

2022 Colombian coffee outlook

It is projected that Colombia will increase its production by 6%, and harvest about 13 to 13.5 million 60 kg bags of coffee in 2022. This will represent 1% of the Colombian GDP and 15% of the agricultural GDP. Additionally, It is projected that exports will reach 12.5 million bags.

Tridge's expert Gabriel Mejia Gutierrez, states that 2022 will present a great opportunity for Colombian producers. In 2021, Brazil faced unfavorable weather conditions for coffee production and it is predicted crops will take about two years to recover. The production decrease of Brazilian coffee will create a market opportunity for Colombian exporters. Colombian coffee will be in high demand which will maintain the high price per bag in the international market.

Tridge’s expert also reports that many producers have decided to expand their plantation areas to increase supply. Due to the increase in the fertilizer price many producers have decided to decrease its use for the 2022 harvest. The area expansion will increase supply, but the reduction in fertilizer will cause a smaller production output per hectare.

The producer's desire to increase production aligns with the president´s Ivan Duque goal to reach a production of 15 million bags of coffee in 2022, which is greater than the current projection. President Duque also announced that the Government and the National Federation of Coffee Producers established an agreement to help sustain the coffee industry with a roadmap till 2030. The objectives of this agreement are to promote access to productive assets to increase productivity and reduce production costs, increase infrastructure for post-harvest management to improve the efficiency of resource use, stabilize the income of coffee producers to reduce the impact of external factors on price and production, and promote internal and external commercialization of green and processed coffee.

2022 looks promising for the Colombian coffee industry, and we can expect production and export recovery. The increase in demand and decrease in supply will create a major opportunity for producers to introduce their products in new markets. 

Sources:

Forbes. Colombia expects to export 12.5 million bags of coffee in 2022.

France 24. Colombia produced 12.6 million bags of coffee in 2021, the lowest harvest in 7 years.

El Nuevo Siglo. Colombian coffee production fell 9% in 2021 compared to 2020.

Portafolio. Colombia's goal, export 12.5 million bags of coffee in 2022.

Sputnik. Colombian coffee production drops 9% in 2021.

Infobae. Red numbers: Colombian coffee production and exports fell in 2021.

Kienyke. Colombian coffee projections for 2022.

National Federation of Colombian Producers. Colombian coffee production closes 2021 at 12.6 million bags.