April 4, 2018 / 9:15 PM / in 9 months

No aid for Colombia coffee growers due to budget constraints: federation

FILE PHOTO: Chief Executive Roberto Velez of the National Federation of Coffee Growers of Colombia (FNC), speaks during a Reuters interview in Bogota, Colombia February 22, 2018. REUTERS/Jaime Saldarriaga

BOGOTA (Reuters) - Colombia’s government will not supply immediate aid to coffee farmers, who are struggling amid low prices and heavy rains, due to budget constraints, the head of the growers’ federation said on Wednesday.

The federation had appealed to the government for direct help for growers amid lower prices - both international and domestic - and a strengthening peso currency that has reduced export income. Colombia is the world’s top producer of washed arabica coffee.

“We proposed to the government the possibility of direct aid,” federation head Roberto Velez told journalists after meeting with Finance Minister Mauricio Cardenas. “And truthfully, the government told us it does not have the fiscal space for it.”

Velez added, however: “We have a very complicated situation and the government expressed its willingness to see how they can help us.”

The federation says domestic prices fell 13.7 percent in the first quarter of this year compared with the same period in 2017. Arabica coffee futures rebounded from a nine-month low on Wednesday, to $1.169 per pound. [SOF/L]

The peso COP=RR, meanwhile, strengthened 6.8 percent between December and March, leading to lower export profits, and heavy rains caused a 6 percent fall in output in the first quarter compared with the same period a year ago.

Cardenas called for a meeting of coffee-producing countries including Brazil, Vietnam and others to “analyze the current demand situation and look for mechanisms to put it in order, to regulate demand and avoid a bigger fall in the international price.”

The government has previously given out subsidies and helped growers get often-expensive fertilizers.

Reporting by Luis Jaime Acosta and Carlos Vargas; writing by Julia Symmes Cobb, editing by G Crosse

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