Lending per region

Latin America

In Latin America, coffee producers are navigating a delicate recovery. Previous disruptions, such as logistical delays and global price fluctuations, have continued to impact the coffee sector. Farmers are still grappling with challenges such as unpredictable weather conditions and the impacts of climate change, which have affected yields. Co-operatives are also facing increasing difficulty in securing contracts, as many buyers are gravitating towards lower-cost, non-Fairtrade conventional coffee options.

The region’s cocoa sector shows greater stability, benefitting from the growing interest in high-quality, specialty cocoa, including fine-flavour varieties. However, producers contend with market access constraints, escalating input costs and continued supply chain challenges which have kept profit margins tight. As a result, producers have focused on sustainable production practices, to tap into the growing global demand for ethically sourced cocoa.

Africa

African cocoa production, particularly in Ghana and Ivory Coast, faces significant challenges from erratic weather patterns and crop diseases affecting harvest volumes. Global supply constraints have driven price increases, creating complex market dynamics. The Living Income Differential (LID) continues to play a critical role, aiming to ensure that farmers receive a fair price for their crops. However, some international buyers have been reluctant to absorb the additional costs, leading to a preference for lower-premium contracts, creating market friction and reduced purchases of Fairtrade cocoa.

In the coffee sector, East African countries such as Rwanda, Uganda and Kenya continue to perform well, with demand for specialty and high-quality coffee beans remaining robust.

Smallholder farmers face ongoing challenges accessing finance and building farm resilience against market and climate fluctuations. The region’s producers are increasingly focusing on enhancing value-added processes and certification, to remain competitive in a global market that prizes traceability and quality.

The evolving regulatory landscape, particularly EUDR requirements, adds complexity across both regions, requiring enhanced traceability and documentation systems. These developments, while necessary for sustainable practice, create additional operational pressures for producers already managing tight margins and market uncertainties.