Coffee production seen to increase by 14%

The country’s coffee production is projected to increase by 14 percent to 32,000 metric tons (MT) in the 2004-2005 cropyear (CY) as more farmers take advantage of high coffee prices both in the domestic and global markets.

Nestle Philippines Inc. assistant vice president for agricultural services Glicerio Joel Y. Lumagbas said this year’s projected production is 4,000 MT higher than the 28,000 MT produced in the 2003-2004 CY.

The Department of Agriculture and the private sector led National Coffee Development Board (NCDB) are initiating measures to boost local coffee production which reached its lowest level of 23,000 MT in the 2002-2003 CY as a great number of farmers skipped planting when international coffee prices went down. The coffee crop year begins July 1 and ends on June 30 of the following year.

Lumagbas said the projected increase in local coffee production could be attributed to improving prices of coffee which encouraged farmers to rehabilitate their coffee farms.

NCDB chairperson Pacita U. Juan of the Figaro Coffee chain and co-chairman Nicholas A. Matti of Negros Coffee and Grains, are leading efforts to revive the country’s coffee industry, bring production up to self-sufficient levels and eventually, produce special coffee varieties for export.

Juan said the country is spending about P1.5 billion annually on coffee imports as local production is inadequate to meet the estimated national consumption of 55,000 MT.

"There is a need to produce more because more Filipinos have taken to drinking coffee and consumption is growing at a clip of two percent annually," said Juan.

Lumagbas said that based on data from the Department of Trade and Industry, the national demand could go up to 64,000 MT yearly, if the raw materials of coffee shops in the country are to be factored in.

The country imports about 30,000 MT annually.

The country started importing coffee in 1997 when local production could not meet demand. Most of the country’s coffee imports come from Vietnam and Indonesia.

Lumagbas said the country produced 68,000 MT in 1985 but production went downhill in subsequent years as coffee farms dwindled from 160,000 hectares in the 1980s to only about 80,000 hectares at present.

Local coffee farmers abandoned their farms in the late 1990s when coffee prices in the international market collapsed due to overproduction in Vietnam and Brazil. Prices of the lower-priced, lower-quality Robusta beans, the raw material for instant coffee, plunged to $370 in 2002 from $3,700 in 1997.

Local coffee exporters, including Lumagbas, are confident that domestic production will continue to pick up in the coming years due to improved coffee prices. From P26 a kilo in 2002, the buying price of Robusta coffee beans rose to P45 a kilo in July 2004.

Robusta is just one of the four coffee varieties produced in the Philippines. The others are Excelsa, Arabica and Liberica.