Daily Coffee Report 8/11/26
Daily coffee report
StoneX Coffee Team
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Colombian Coffee Faces High Costs Pushed by Fertilizers and Minimum Wage; Low Productivity Prices
By: Diana Delgado, Contractor
Colombian Coffee Faces High Costs Pushed by Fertilizers and Minimum Wage; Low Productivity Prices
Coffee Network (Bogota)- The coffee business in Colombia faces a “very difficult” year in 2026 owing to high costs, low productivity and low coffee prices, the general manager of the coffee growers federation, German Bahamon said.
Colombia, the world’s third-largest coffee producer, faces increased costs hit the unprecedented policy of the incumbent administration to do not explore or produce natural gas, the basic input for manufacturing nitrogen fertilizers, which has also impacted costs, Bahamon noted
In a load of coffee, between 18% and 20% of production costs correspond directly to fertilization. A coffee farm in optimal condition requires 1.3 tons of fertilizer per year, and urea represents about 50% of that volume.
Unlike other nations in Latin America, Colombia today imports gas and pays the consequences in inflation and agricultural prices. Meanwhile, Argentina produces one million tons of urea per year. Venezuela, with obsolete plants, reaches 2.2 million. Bolivia inaugurated a plant in 2013 with a capacity of 54,000 tons per month. All of them used their gas to build fertilizer self-sufficiency, Bahamon said.
“Colombia, which has gas, chose not to use it. The question is legitimate: how do we expect to feed the world if we do not guarantee access to the inputs that make production possible?, “ he said in editorial published at the financial newspaper La Republica.
In addition, the price of urea rose from $414 to $750 per ton on the market—an increase of 81% because of tensions between the United States and Iran, and uncertainty surrounding the Strait of Hormuz.
“When fertilizer prices rise, bread rises, rice rises, and coffee production costs rise. There is no possible food supply without accessible inputs,” he added.
Production costs have also rise because of the increase of the minimum wage by 23.7% authorized by the country’s first leftist president Gustavo Petro. In addition, inflation rose 5.1% last year, the third highest in Latin America.
The second front is fiscal. The new property tax scheme, derived from the accelerated updating of cadastral valuations, ignores a fundamental reality: agricultural land is not a speculative asset, but a productive one. Its value cannot be measured by market references disconnected from agricultural cycles, price volatility, and climate risks, Bahamon noted. By disconnecting taxation from real profitability, it ends up taxing wealth above actual activity. Far from strengthening rural development, this system may suffocate producers, discourage staying in the countryside, and, in extreme cases, jeopardize the country’s agricultural production, he added.
The third front is the market. Speculative pressure in commodity markets has pushed coffee prices down by $0.70 so far in 2026, anticipating a large harvest in Brazil that does not yet exist. As if eight million additional bags in one country could sustainably correct the structural imbalance of the global market. Heat waves in Vietnam, relentless rains in Colombia, and increasingly frequent frosts in Brazil are not temporary anomalies—they are the new climate normal.
Consumers demand more coffee; financial markets bet against it. Added to this imbalance is the revaluation of the peso: the dollar has gone from COP 3,671 today. Each load of coffee represents about COP500,000 pesos less for the coffee grower solely due to the exchange rate.
"The math is unforgiving: production costs are rising faster than income,” Bahamon added.
By Diana Delgado
Source: German Bahamon, general manager of the coffee growers federation in an editorial.
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Daily Coffee Report 8/10/26
Daily coffee report
StoneX Coffee Team
- Coffee
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