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Colombia’s Coffee Cooperatives Reported COP37.27 Billion In Losses in 2021

By: Diana Delgado, Contractor

Colombia’s Coffee Cooperatives Reported COP37.27 Billion In Losses in 2021

 
Diana Delgado
Latin American correspondent
diana.delgado@stonex.com

Colombia’s Coffee Cooperatives Reported COP37.27 Billion In Losses in 2021

Coffee Network (Bogota)- Coffee cooperatives in Colombia recorded combined net losses of COP37.275 billion Colombian pesos ( around US$10 million) in 2021 as coffee growers failed to fulfill with the delivery of beans in the futures contracts.

A total of 59 coffee cooperatives that reported their financial statements to the  the country’s Superintendency of the Solidarity Economy (Supersolidaria), recorded combined losses of almost US$10 million, Supersolidaria told Coffee Network.

The 56 coffee cooperatives that sent information as of December 31, 2021, they had Ps286.2 billion among accounts receivable. In addition, they had COP353 billion in debts to be paid.

The 59 coffee cooperatives had net assets worth COP1.24 trillion and liabilities worth COP868 billion. Their net worth was COP373.23 billion. The cooperatives employee 2,125 people and have 71,269 associates or coffee growers who sell to them.

The sharp losses of the coffee cooperatives, the risks of the disappearance of additional cooperatives and the liquidation of the country’s second-largest De los Andes cooperatives, prompted lawmakers to convoke a hearing at the senate.

The hearing at the senate is expected to take place on May 3 at 10:00 a.m. Senators Juan Felipe Lemons, Juan Samy Merherg, Aida Avella and Wilson Neber have convoked the hearing.

The Minister of Agriculture, Rodolfo Zea, the director of the coffee growers federation and the director of Supersolidaria have been convened to attend the hearing.

“We hereby request the members of the fourth commission to join us in holding a debate on political control of the crisis caused by the coopertaives, especially that of Los Andes in Antioquia,” reads the letter.

DE Los Andes cooperative will be liquidated due to low coffee volume of sales and the non-compliance with future coffee deliveries, which derailed earlier plans to save the cooperative.

The superintendence accepted a report from the intervening agent, Alejandro Revollo, who considered the future of this solidarity organization unfeasible, given the deterioration of its economic variables and the impossibility of signing agreements with creditors.

The coffee cooperative, the country’s second-largest coffee cooperative in terms of coffee purchases, was heavily impacted by the low volume of bean sales by the associates and by the non-compliance with future coffee deliveries.

"Coffee sales fell from 28 million kilos in 2020 to 11 million in 2021, that is, a decrease of more than 50%, which disarmed all the projections and the principles of agreement that we had elaborated with the creditors," Revollo told the local newspaper EL Colombiano.

According to the resolution of the superintendency, at the end of 2021, the percentage of unfulfilled futures coffee contract sells was 84%.

“The evolution of the cooperative has moved away from initial expectations and its current situation is precarious and, above all, worsens an already challenging scenario in which a debt restructuring had been negotiated,” Supersolidaria said.

To execute the liquidation of the cooperative, a period of one year was determined. José William Valencia was appointed as liquidator.

The intervention of De los Andes cooperative happened at times the cooperative which buys coffee in the southeast of Antioquia—Colombia’s second-largest coffee producing province, booked losses of around COP23 billion Colombian pesos (US$27.7 million) in August last year. In January 2020, losses grew from COP6 billion, while it continued to report losses each month until August 2021, according to information obtained by Coffee Network from Supersolidaria .

In a statement, the National Federation of Coffee Growers and the Committee of Coffee Growers of Antioquia said  they will accompany the intervention process, and declared themselves awaiting a meeting with the designated liquidator, to learn the details of the decision adopted by the Superintendency.

The situation of the cooperative, which was intervened by the regulator in 2019, worsened last year when coffee prices started to skyrocket prompting associates to breach contracts of coffee sales. The cooperative was intervened three years ago because of extended losses and poor management.

By Diana Delgado  

 

 
  • Coffee

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