Crop evaluation after completion of harvesting period and before the start of export period.
Evaluating new crop in Burundi by Antoine
BIF local currency is now valued about 3’100 for one USD on the black market, while the official rate is still BIF1’860 for USD1. This is about 30% devaluation in one year, while official statistics paint a rather ok inflation with about 7% in 2019, this is below the average for Burundi sitting at 10% or so. Given the devaluation of the currency we don’t really understand where such ‘low’ inflation statistics are produced … indeed Burundi doesn’t produce much and imports most consumer goods.
Coffee farmers who receive BIF500/kg of Cherry are actually not content anymore with such a price, even if that is correlated with a 140 market level … Indeed their purchase power is decreasing every day, due to devaluation, not to speak of the drop in revenue due to the very low crop cycle ...
Exporter licence is granted on a yearly basis, to date no Exporters have been granted with it .. hopefully by 26th of July the government clarifies its intentions… we can’t expect any export within July.
The official closure of the Fully Washed season is the 20st of July - then only can Semi Washed be traded in the country. This measure is designed to promote Fully Washed process production which generates better quality and supposedly improved revenue for the farmer community, certainly does the job for tax collectors …
To move from one district to another goods need to be authorized by a district administrator, basically collecting taxes off transiting goods. This came to our knowledge this year in particular as most coffees are blocked up country as District administrators are not being paid by local millers or Sogestal whom have no cash. A discussion is going on with Minister of Agriculture so millers can be relieved from immediate payments and summoned to pay on payment of exports
No exporter has been granted export licence as of yet for 19/20 season - yet to be authorized by the government … It is yet to be communicated what is needed to be done by exporters to be granted with Export license this year …
Huge backlog from last crop still unsold and stored uphill in Burundi, talk about 20% of crop or some 65’000 bags! Mainly FW15+ coffees, the loss in value for the coffee sector is big, yet another stress factor for local millers who are yet to show this loss in accounting…
New crop comes in extremely low, probably 55% lower than last crop or about 165’000 bags of FW coffee. Reasons for such a low crop are not factually identified, it is an off cycle yet usually accounts for 20% drop max. Predominant view is that past crop was really big and trees are really old, really tired hence not in capacity to grow much fruit on next cycle.
Northern provinces are the most affected with down to ⅙ of the 18/19 crop cycle produced, it favors the consensus that old trees are worn out, Kayanza is the province where tree population is reputedly the oldest in the country. Central province is probably the less affected with about 35% loss in production. Mumirwa where Succam operates reports 55 to 65% drop in production. Kirundo about 60% loss etc …
We expected Semi Washed production to be higher this year, we shall know in a couple of weeks but seems that it might not even be the case, probably even lower than 18/19 2’500MT … And what is to be produced will be exported to Uganda as Stocklots, avoiding much taxes versus export as Semi Washed ABC.
In cup, we can expect the coffee to be better than past crop cycle where resurgence of potato has been high, due to higher volume production cycle in unfavorable conditions for post harvest with steady rainfall. This year conditions have been more favorable and we don’t expect much potato occurrence. What is really important is to make sure there is no mixing of past crop with new crop at dry mill level.
We have cupped already a number of lots from Mumirwa, Gitega and Eastern Provinces and cup profile is very engaging at this stage, despite being quite fresh still. Coffee will benefit from a month rest or so. September is perfect freshness shipment time FOB Dar or Mombasa.
Next crop 2020/21
Next crop cycle 20/21 is yet to kick started with flowering hopefully not too soon, ideally during August. For now the trees look rather ok for their age and we should expect a crop recovery toward 300’000 bags production if no adverse climate conditions.