Venezuela, a One-time Coffee Exporter Turns Importer

Venezuela’s dismal harvest in 2008-09 has placed one of the coffee-dependent nations in terms of production and consumption to look out for supplies from outside for the first time after independence. In fact, the forecast for the likely imports was by next year but the current coffee inventories indicate stocks including reserves would be entirely exhausted by end of August this year.

Both producers and government are blaming each other for the shortfall. Producers claimed production troubles including shortage of labourers and rising cost and government’s low fixed price for the produce that triggered smuggling have played a critical role in pushing the industry to such a situation. On the contrary, the government argued a slew of issues such as lack of co-ordination among the sector, speculation by the growers and roasters and climatic conditions have rather played spoilsport to the industry.

According to sources, large scale smuggling is taking place across Columbian borders due higher prices. Though Venezuela produces very high quality Arabica coffee, but Colombia offers a quintal of green coffee beans at about $475, whereas the same in Venezuela fetched less than $220.

Venezuela has seen dwindling production for the last two decades with some green shoots for few years. In 2007-08, the harvest production was 996,000 bags (46kg/bag) and the same in this fiscal was 845,000 bags despite significant rise in domestic demand and consumption. Nelson Moreno, head of the small and medium-sized roasters told Reuters that the most likely place for fulfilling the domestic need with similar beans would be Brazil.

Pedro Vicente Perez, coffee director with the national agricultural federation, Fedeagro confirmed to Reuters that this would be the first time coffee to be imported by Venezuela. The Venezuelan coffee market is largely domestic; moreover, no significant legitimate exports have been recorded since 2004 even though smuggling is on the rise.

By Jose Roy