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El Salvador leverages online platform to avert impact of price crisis

From the September 2018 issue.

A strategic partnership between Algrano and the El Salvador Coffee Council is gathering momentum after coffee prices plummeted to a 12-year-low on the future exchange market in New York.

“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,”says Peter Lerch, Key Account Manager at Algrano.

The agreement between the Swiss tech start-up and the council, known in Spanish as Consejo Salvadoreño del Café (CSC) aims to provide growers with direct access to markets in Europe.

“Our alliance with Algrano helps producers to directly negotiate their coffee in a fully traceable and transparent way,” CSC Executive Director Hugo Hernández says.

“The platform represents a more sustainable market option for Salvadoran producers, and takes into account the excellent quality of their coffee that is widely recognised by specialty markets around the world.”

Announced at World of Coffee in Amsterdam earlier this year, the collaboration held its first workshop involving a group of CSC trainers conducted last month.

Technical advice and training on how producers can effectively market their coffee to specialty coffee roasters is now being disseminated to its members. The CSC will be rolling out the training through online support and targeted events to producers before this year’s coffee harvest begins in November.

“The bottom line is that smallholder producers are being hit the hardest by these extremely low market prices. Growers are now facing the reality where they are in negative income and cannot even cover the cost of production. It’s already a critical situation and the true impact will only be seen in two years,” Lerch says.

Although more than 70 per cent of El Salvador’s coffee exports currently reach specialty markets worldwide, the country is still recovering from the coffee leaf rust crisis that swept across Central America in 2012.

El Salvador’s coffee exports are crucial to the country’s economy and the Ministry of Agriculture is taking steps to revive the sector back to previous levels when coffee was once a primary source of revenue for the country.

The CSC will present its partnership with Algrano to the International Coffee Organization when the world’s coffee producers meet in London from 19 – 20 September to discuss the current market price crisis.

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