Peru: Coffee On The Rise
6 May 2008 Peru’s coffee production is forecast to be up 9% for the 2009 marketing year, according to the US Dept. of Agriculture’s Foreign Agriculture Service (USDA-FAS), for a total of 4.3 million 60-kilogram bags. Improved production practices and solid international prices are expected to drive the increase. These factors will most likely continue in upcoming years.
Industry Structure
Coffee in Peru is mostly grown by very small producer operations; an average producer has 2 to 3 hectares (Ha) under production, and most are grouped in associations or cooperatives that allow them to negotiate prices and improve post harvest handling. The larger associations have up to 2,000 members and over 7,000 Ha under management, and the most sophisticated ones have financial branches that provide funds to producers to increase or improve their crop.
Average yields are around 750 kilograms per Ha, but reach up to 2,300 kilograms per Ha among the most efficient producers. Low yields are typically due to poor cultivation practices. Due to the costs involved, plant replacement and fertilization are rare among coffee growers. The average cost of production is about US $62 per Ha, of which about 80% is labor.
Coffee is grown throughout the eastern slopes of the Andes, but is concentrated in three principal growing areas. The most important area in terms of both volume and quality is the central eastern slopes of the Andes in Chanchamayo with 30% of Peru’s production. The other two areas are the northern Andes and Cusco regions, with 21% and 18%, respectively.
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