European import restrictions loom over Peruvian coffee

Peru’s National Coffee Board (JNC) has warned that, as of May, the country risks losing its status as a preferred supplier to the European market due to its failure to comply with European regulations.

The JNC stated that the crux of the problem is that over 60% of Peruvian coffee farms do not have property titles, which are needed in order to certify that their beans are not cultivated on recently deforested lands. It said that efforts to implement georeferencing, which would allow for forestry monitoring, have made very limited progress.

Lorenzo Castillo, the manager of the JNC, blamed the Peruvian government for the industry’s predicament, criticizing the Ministry of Agriculture (MIDAGRI) for failing to address the legal status and georeferencing of coffee farms. According to Castillo, the government’s lack of action risks creating social upheaval among small-scale farmers who depend on coffee exports for their livelihoods.

The JNC said that, in an attempt to resolve the problem, representatives of JDE Peets, one of Europe’s largest coffee importers, have contacted both the Peruvian foreign ministry and MIDAGRI to offer assistance in expediting the virtual accreditation of deforestation-free production zones.

According to Castillo, however, although MIDAGRI has set aside the necessary resources to accredit farms, operational and logistical challenges persist due to the fact that local municipalities and coffee agricultural agencies lack the right technical support.

The JNC anticipates a modest increase in coffee production for 2024, estimating a harvest of 260,000 tonnes, a 4% rise from 2023’s output of 251,000 tonnes. This improvement is attributed to enhanced fertilization practices and favorable biennial crop cycles, although concerns about rust disease in several regions remain.

Export projections for 2024 remain optimistic, with anticipated volumes and revenues potentially mirroring the previous year’s figures of $834mn from 4 million 527,000 quintals of coffee. Castillo expresses hope for reaching sales of $900mn, contingent on stable market prices and the resolution of current legal and operational hurdles facing Peruvian coffee exports to Europe.