CODIV 19: IMPACT ON THE COLOMBIAN COFFEE SECTOR
Mayors and Governors of the municipalities and departments began to limit mobility, applied curfew and even enforced lockdowns on their territories which restricted the coffee operation in many cities of the country, these measures impact the Economy but are necessary to ensure activities supporting food security could continue. Due to situation presented by the COVID-19, the Colombian national government has been force to implement centralized measures and mechanisms that allow the country to face the current situation in the best way, containing the spread of the virus and reducing its impact on the economy as much as possible.
The measures taken include the mandatory preventive isolation until April 13, which was later postponed until May 11, but allowed 34 exceptions, one of those being the guarantee of supplies and staple foods such as coffee. The processes of purchase, threshing and roasting of coffee are allowed, not only from the cooperatives, but also from the supply chains of private exporters that represent more than 75% of the volume marketed in Colombia.
However, to date there have been restrictions on some processes for purchasing and processing coffee due to local regulations of mayors and governors that have affected normal operations, especially related to availability and uptime of threshing agents and purchase points as well as the restriction of the mobility of producers and even worse: limiting availability of coffee pickers to regions on harvest season.
The measures deemed that the transport of both import and export foreign trade cargoes was exempt from the quarantine measure; despite the regulations and their clarifications, to date there are still some drawbacks.
Decrease in the supply of transport service to move cargo to and from Colombian ports: This decrease is mainly due to a complaint from transporters on issues of safety and difficulty in accessing food services, parking lots, lodging, among others, both on transit routes as in port cities.
Cargo and transporter safety: due to the decrease in vehicles traveling on the roads, drivers and exporters have expressed concern about the possible increase in claims or theft of cargo in transit from production or processing sites to port. These two aspects have hampered availability of trucks to transport coffee, even though the police have already announced control and security measures.
Overcharges for delays in the return of containers: The situation described above is generating an accumulation of empty containers that are not returning to the ports in the absence of drivers who agree to travel, generating overruns for delays in the return of these to the container yards and additional costs for warehousing in ports. It’s necessary to clarify that the return of containers from the interior of the country to the port is necessary for the export of coffee. However, the shipping companies that have been consulted on the subject show sufficient availability of containers on inventory. We will have to wait and assess how this return mechanism works once the operating volume of coffee increases.
Given the difficulties in transporting cargo within the national territory, decree 482 was issued, which dictates measures on the provision of the public transport service and its infrastructure. This is created with the aim of unifying and coordinating the command of the different portfolios involved in cargo mobilization such as the Ministry of Agriculture and Rural Development, the Ministry of Commerce, Industry and Tourism, and the Ministry of Transport, the latter with all its attached entities.
The country's port operation has never been restricted, because the government has sought to shield the supply chain and food security for Colombians. The impact on this aspect has been generated for the most part by the cancellation of shipping services, especially those coming from or destined to Asia.
In conclusion, coffee is considered an exempt sector as it is a basic good for the food security of Colombians, from the point of view of foreign trade allowing its transport logistics and port operations. However, there are restrictions on the operation such as regional decrees that have been being solved, difficulty in obtaining vehicles, security in transportation within the country, cancellations of some shipping services and, in general, all the controls that must be carried out by the purchase and processing points to help prevent the virus from spreading in our country.