Colombian earthquake disrupts vital coffee export route

Colombia’s earthquake has disrupted a road carrying about 60 per cent of the country’s coffee exports and interrupted operations at a key Pacific port in the world’s third largest coffee producer.

The epicentre of the 7.4 magnitude earthquake, which as of Tuesday had killed at least 181 people and injured thousands, was close to the country’s coffee-growing heartland.

Colombia provides about a fifth of US coffee imports and plays an outsized global role as the top producer of high-quality mild-washed Arabica, used by Starbucks and other major roasters.

The earthquake deepens concerns for the industry as growers brace for the impact of El Niño.

The road linking the coffee region to the Pacific port of Buenaventura, which handles most of Colombia’s coffee exports, was affected by the earthquake, according to Oliver Broster, senior manager for coffee analysis at Expana, adding that the impact is still being assessed.

Colombia’s National Federation of Coffee Growers said terminals at Buenaventura had temporarily paused operations for infrastructure inspections and landslides had blocked access roads. It added that exports were continuing through the Caribbean coast.

 Arabica futures, which have risen about 30 per cent since early June on concerns over El Niño, rose to multi-week highs of $3.26 a pound on Tuesday before falling as traders weighed the earthquake’s potential impact on Colombian supplies.

Arabica stocks held in the warehouses of the Intercontinental Exchange “are perilously low and Colombian coffee is a key producer of mild washed coffees, so markets will be quite sensitive to any supply disruption out of this key origin”, said Kona Haque, an agricultural commodities specialist and former head of research at trader ED&F Man.

It is still too early to assess much of the damage to roads, mills and other key infrastructure, Haque said. Coffee producers are already bracing for a strengthening El Niño, which can bring damaging shifts in temperature and rainfall to coffee growing regions around the world and has helped drive price volatility in recent weeks.

Mild-washed Arabica is prized for its acidity and flavour profile by the likes of Starbucks, which says Colombian beans are a key component of its Espresso Roast.

Germán Bahamón, head of the coffee federation, told the FT last month that Colombia had deliberately focused on quality rather than trying to compete with Brazil on volume, taking advantage of its high-altitude growing regions to produce speciality Arabica.

Bahamón warned in late July that, while a short and moderate El Niño could actually benefit coffee production, a prolonged and very strong event could significantly affect crops in Colombia, Brazil and Vietnam and put pressure on global supply.

He said the federation expected to begin assessing the impact on Colombia’s 2027 harvest from August. Colombia is already expecting a smaller harvest this year.

Bahamón said production was forecast at about 12.8mn 60kg bags, down from 14.8mn last year, which he said was the country’s biggest crop in 33 years.