Mexico Calls for Intergovernmental Body to Influence Coffee Prices

The 17th summit of the Tuxtla Mechanism in Honduras. Mexican federal government press photo.

The Mexican government is taking a lead role in encouraging fellow Mesoamerican countries to band together to devise solutions to the ongoing coffee price crisis.

At the recently concluded 17th Summit of the Tuxtla Mechanism (Cumbre de Tuxtla) in San Pedro Sula, Honduras, Mexico Agriculture Secretary Víctor Villalobos called on the creation of a formal intergovernmental body to influence coffee prices.

Representing Mexican President Andrés Manuel López Obrador, Villalobos made his proposal in front of numerous heads of state and other top officials from the 10 countries participating in the summit — including Belize, Colombia, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama — all of which actively export arabica coffee.

Villalobos argued that “the Mesoamerican nations are major producers of quality coffee that is consumed worldwide, but at a low cost that does not correspond to the work done by the coffee producers, who are mostly small-scale coffee farmers,” according to a report from the office of Mexico’s Secretary of the Exterior.

The office added that the proposal would lead to the creation of a body that would “participate in and influence the process of setting the international price of coffee, given that currently its quality and characteristics are not being fairly compensated in the world markets.”

As of this writing, the International Coffee Exchange futures contracts base price for arabica coffee — often referred to as the C price, or C market price — was USD$0.965 per pound. It has been exactly one year and seven days since the C price for coffee dipped below $1 per pound, representing an important psychological marker, although even with prices above $1, coffee remains an unprofitable pursuit for many millions of smallholder coffee farmers, according to dozens of sources DCN has spoken with over the past year.

NGOs, private enterprises and government entities representing coffee producers all over the globe have been calling for immediate remediation for low prices, with some suggesting that farmers are abandoning the coffee sector en masse in favor of growing illicit crops, or in search of better opportunities through migration.

Mexican leaders plan to revisit the issue at the next meeting of the Central American Agricultural Council (CAC), to be held in Mexico on September 5-6.

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