Coffee growing is becoming unprofitable for farmers like Mr Adan Rojas. Like thousands of small Colombian farmers, the Covid-19 pandemic forced him to use out-of-work locals to harvest his beans, as travel restrictions kept out experienced seasonal pickers.

His 6.9ha spread in the foothills of the Andes relies on speciality markets for much of its earnings, and beans used in US$4 (S$5.60) lattes in New York have a much smaller harvesting window. Without access to professionals who can pick five times faster, the cherries that encase the beans over-ripened and fell off the trees.

“You can still sell that coffee, but once it hits the ground, it’s contaminated,” said Mr Rojas, who expects to break even this season. “There’s no way you can sell it as speciality.”

The skilled labour squeeze is the latest pandemic-era blow for growers like Mr Rojas. With many cafes and restaurants still shut, fewer Starbucks lattes are being sold. Futures of smooth-tasting Arabica beans have lost 27 per cent this year, closing the gap with the more bitter Robusta. People are still drinking at home, but it is typically more standard brews and instant coffee.

The alarm bells are also ringing in Central America, where harvests rely on migrant labour. Weakening currencies help cushion the blow for growers in the region, but the Brazilian real has tumbled even more, making the top coffee nation even more competitive. Brazil’s more mechanised industry is also less exposed to labour disruptions.

While tapping pools of local labour has allowed smaller growers to deal with regional lockdowns and maintain output, hidden behind that success are some worrying signs.

The industry is counting on an easing of restrictions to allow seasonal workers back in. But letting in more outsiders increases the risk of spreading the disease in areas that so far have contained it much better than big cities.

“I’m very worried about the impact on the harvest in the second half,” said Mr Oscar Reyes, who heads Colombian Agricultural Dignity, which advocates for better prices for growers. “Although we are loosening restrictions, we still don’t know when the peak of this virus will be in Colombia. It’s an incredibly complex situation for farmers.”

Like Colombia, Costa Rica is looking to use pools of locals who have lost their jobs to harvest its mainly premium beans. Nicaraguan labour probably will not be available this season amid fears of a second wave, said Costa Rican Coffee Institute head Xinia Chaves.

While bumper crops in coffee heavyweight Brazil mean there is plenty of supply, exports from Colombia, Guatemala, El Salvador, Costa Rica and Honduras are all down amid lower demand and logistical delays. Honduras, Central America’s top exporter, relies on workers from Guatemala and Nicaragua for the harvest that begins in September in some areas.

With borders shut, Mr Enrique Salazar, general manager of speciality exporter Bicafe, is worried the industry will not be able to find enough people. He is also anxious that roasters and importers will be unable to make their usual trips to inspect beans in-situ.

In Ethiopia, Africa’s top producer, speciality exports are up this year. Rather than labour, Covid-19 disruptions there are more focused on inputs to farmers, the impact of which probably will be felt in future production, according to the Ethiopian Coffee and Tea Authority.

As surging rates of Covid-19 in poorer countries threaten harvests, the prospect of supply disruptions is raising concerns downstream.

Olam International, one of the world’s largest coffee traders, has started a fund to help some of its suppliers weather the crisis.

“We want to ensure maintenance of the supply chains to ensure harvest of beans happens as soon as possible without spreading the virus,” said Mr Vivek Verma, head of Olam’s coffee business.

“Coffee prices have already been so low that many farming communities are already on their knees. And then on top of that, with Covid-19, they are scared for their health.”

For growers like Mr Ruber Bustos, it is the pandemic-driven weakness in demand for exotic coffees that has kept them focused on the standard market, where margins are tighter. Last year, speciality coffee made up about 30 per cent of Mr Bustos’ harvest. In the first half of this year, he will not produce any. He is hoping coffee houses will start to reopen and restrictions on seasonal workers will ease soon.

A reduction in demand for speciality coffees can have a lasting impact on farms, according to Specialty Coffee Association chief sustainability officer Kim Ionescu.

She said: “It results in an inability to reinvest, which makes coffee trees weaker and more prone to diseases and ultimately less productive,” she said. “One thing leads to another and then it becomes a problem too large to solve at the farm level.”

BLOOMBERG

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