Anyone working in commodities right now will know that these are tricky times for producers and supply chains the world over. In coffee, we have seen suppliers hit with a double whammy. On one hand, the coffee shops and micro roasters struggle to survive and buyers become unable to honour their forward contracts – and on the other hand, at origin, co-operatives struggle to secure the crop from smallholder producers.
This was the case in Mexico in May, where coffee communities closed their roads to people and vehicles in an attempt to keep themselves safe. In a very few days, it may be that our growers will struggle to access food, never mind take their product to market. If the co-operatives do not have access to finance, local middlemen will step in and provide it instead. We have seen this around the world, where the local welfare frameworks are weakest and smallholders are the most vulnerable. The price of food has risen considerably and producers will take any price or even barter their coffee for a sack of food in order to ensure that they are able to eat. For many of smallholders the world over, the saying ‘a bird in the hand is worth two in the bush’, rings very true.
Access to pre-finance is possibly one of the most powerful tools buyers can have right now as they try to plan their way through the Covid-19 emergency. It will not only help companies in Europe in the long term, but also help to secure supply chains going forward. Now more than ever it is essential that we are able to provide co-operatives with much needed finance to keep their businesses sustainable, while ensuring the well-being of our colleagues in the UK, Africa and Latin America.
Read more about Cristina, and meet another new Board member, Yvonne Gale, here.