With commodity coffee prices at historic lows in terms of real dollars, coffee sector leaders in El Salvador have turned to tech in an attempt to provide increased specialty market access for many thousands of producers.
The Consejo Salvadoreño del Café (El Salvador Coffee Council, or CSC) earlier this summer signed a strategic partnership agreement with the Swiss online green coffee trading platform provider Algrano. The three-year-old company works directly with producer organizations and exporters to facilitate traceability and transactions for green coffees online in 60-kilo bags to roasters throughout Europe.
Algrano and the CSC estimate that approximately 70 percent of El Salvador’s coffee exports do currently already reach specialty markets throughout the world — primarily in the United States and Europe — yet the country’s coffee producers are collectively still struggling to rebound from losses sustained during the widespread leaf rust epidemic that began in 2012.
In an announcement yesterday, Algrano and the CSC suggested that even if 100 percent of Salvadoran Arabica coffees were to reach the traditional specialty market, that still might not be enough to sustain farmer livelihoods amidst the current global price crisis.
“Amongst the many structural and climatic challenges that producers face, one of the main barriers to farmer profitability is that they remain largely dependent on the stock market price mechanism to negotiate their coffee price before it leaves the farm gate,” said Algrano’s Peter Lerch.
The CSC plans to outline the partnership at the biannual Session of the International Coffee Organization (ICO) in London next week. For the CSC, which represents more than 20,000 of the country’s approximately 45,000 smallholder farmers, the Algrano partnership is not merely about premium market access; it’s also about premium marketing.
“One of our priorities is to help reduce the dependence on the market price as producers take advantage of the digital tools available that facilitate the direct marketing of their product to new markets,” said CSC Executive Director Hugo Hernández. “Our alliance with Algrano helps producers to directly negotiate their coffee in a fully traceable and transparent way. The platform represents a more sustainable market option for Salvadoran producers, and takes into account the excellent quality of their coffee that is widely recognized by specialty markets around the world.”