Daily Coffee Report 8/11/26
Daily coffee report
StoneX Coffee Team
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Colombia Allocates Funds to Subsidize Insurance for Farmers, Including Coffee, Cocoa Growers Ahead El Nino
By: Diana Delgado, Contractor
Colombia Allocates Funds to Subsidize Insurance for Farmers, Including Coffee, Cocoa Growers Ahead El Nino
Bogota (Coffee Network)- As Colombia braces for the arrival of the El Niño weather phenomenon in the coming months, the Ministry of Agriculture and Rural Development announced Thursday that it will allocate COP 67.272 billion Colombian pesos ($18.18 million) through the Agricultural Sector Financing Fund (Finagro) to subsidize agricultural insurance for farmers.
The initiative, known as the Agricultural Insurance Incentive (ISA), will cover up to 85% of insurance premiums for small-scale producers. The program is part of the government’s broader strategy to strengthen risk management and protect Family, Ethnic, and Community Farming (ACFEC).
To date, the incentive has benefited 19,467 farmers and agricultural producers, supporting 41,073 productive projects valued at COP368.585 billion pesos. Insured sectors include coffee, rice, plantain, potatoes, cassava, cocoa, corn, and diversified farming systems.
In parallel, pilot insurance programs are protecting 6,183 coffee growers against both drought and excessive rainfall, representing a total insured value of COP55.371 billion pesos. Another 3,308 producers across six departments are expected to join the program, adding a potential insured value of 15.329 billion pesos.
Financial protection against climate risks
The government said the subsidy is intended to shield farmers from the severe impacts of El Niño, which brings water shortages and drought conditions that threaten agricultural production and food security.
Under the program, low-income small farmers will receive subsidies covering up to 85% of their insurance premiums, while medium-sized producers may receive up to 35 %.
For example, if a farmer purchases an insurance policy worth 1 million pesos, the government would cover as much as 850,000 pesos of the premium. The producer would only pay the remaining 150,000 pesos, plus a 5 percent Value-Added-Tax.
Agriculture Minister Martha Carvajalino said the initiative seeks to help producers prepare for climate-related disruptions before they escalate.
“With this agricultural insurance incentive, we are ensuring that farmers and producers do not face the challenges posed by the El Niño phenomenon alone. We are implementing a comprehensive strategy with stronger guarantees, greater resilience, and practical tools that allow them to continue planting, producing, and safeguarding Colombia’s food security,” she said.
Jimena Ruiz, president of Finagro, said the subsidies are designed to prevent climate events from financially devastating rural producers.
“These incentives aim to ensure that a year impacted by El Niño does not mean bankruptcy for a producer, but instead provides the support needed to recover and plant again after any emergency,” Ruiz said.
Additional measures to support the agricultural sector
The Colombian government has also introduced other financial instruments to encourage investment and help producers adapt to increasingly adverse climate conditions.
One of them is the Capitalization Incentive for Agricultural Risk Management (ICGR), which seeks to reduce producers’ vulnerability to droughts and flooding. Through this program, farmers can receive up to 40% of their loan balance as a credit payment if they invest in irrigation systems or water infrastructure — measures considered essential during periods of drought.
Another initiative, the Comprehensive Incentive for Agricultural Risk Management (IIGRA), promotes financial inclusion among farming associations while providing protection against financial and market risks. The program offers access to loans with low, fixed interest rates, along with investment incentives of up to 40% applied directly toward outstanding debt balances. It also includes subsidies covering up to 80 percent of agricultural insurance costs.
In addition, the government launched a Special Credit Line for Productive Development, which subsidizes interest rates for low-income small farmers, with monthly rates starting at 0.5 percent.
Farmers interested in accessing these incentives can apply through Banco Agrario and other participating banks and cooperatives.
El Niño is likely to emerge soon (82% chance in May-July 2026) and continue through Northern Hemisphere winter 2026-27 (96% chance in December 2026 – February 2027), the National Oceanic and Atmospheric Administration, NOAA said.
According to latest diagnostics call for a transition to ENSO-neutral conditions continued, as indicated by near-average sea surface temperatures (SSTs) in the east-central equatorial Pacific Ocean. The latest weekly Niño-3.4 index value was +0.4°C, with the westernmost (Niño-4) and easternmost (Niño-1+2) indices at +0.5°C and +1.0°C, respectively.
In Colombia, the El Niño phenomenon is typically associated with severe drought conditions that often trigger forest fires. Historically, these dry periods have also created the water stress needed to stimulate the critical flowering stage of coffee crops, ultimately boosting coffee production.
However, government agencies and agricultural associations have expressed growing concern that the upcoming El Niño could be among the most intense seen in the past 120 years, raising fears about its potentially severe impact on rural communities, food production, and water availability.
By Diana Delgado
Source. Ministry of Agriculture
- Coffee
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Perspective: Morning Commentary for August 11
August 11 – It was generally a quiet night for the markets until early this morning when a headline hit that Iran and Oman were close to reaching a deal. Stock futures rallied, while the dollar index followed Treasury yields lower, along with active selling in the energy- and food-based commodities. The headline had limited impact though in a world that has become skeptical of promises of peace. Stock futures remain steady to firmer at this hour, while the VIX trades near 16 – just above 2026 lows. The dollar index is trading near 99.8 this morning, after recovering from its early morning selloff over the following hour of trade. Yields on 10-year Treasuries are trading near 4.69%, while yields on 2-year Treasuries trade near 4.22%. WTI crude oil is trading near $82 per barrel at this hour, while Brent trades near $88. The grain and oilseed markets are mostly weaker, after failing to recover from this morning’s early selloff that started in the crude oil market.
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Daily Coffee Report 8/10/26
Daily coffee report
StoneX Coffee Team
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