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The perfect coffee storm

Per 1st March we increased the prices of our coffees from Ecuador, as you may have noticed. We received the new harvest in late January this year and as always we had to first run some test roasts before we could offer the coffees to you in March. And I can tell you: we are in love with the tastes of this new harvest. However, as we were testing and tasting, we were also doing the math to be able to keep the prices for our dear costumers as low as possible while still having paid the farmers the prices they asked for since for this new harvest we paid the farmers in Ecuador considerably more for their coffees compared to previous years. But why did the farmers increased their prices?

As you may know, Brazil is the world’s largest coffee producer. In 2020 Brazil first suffered the worst drought in nearly a century, which significantly reduced the coffee yield. Following this, certain regions of Brazil were hit by a cold snap with sub-zero temperatures and this was really bad as frost completely kills coffee plants. As a result the yield was reduced again. With less coffee produced by Brazil there was more demand than offer in the coffee world which lead to the first increase in prices in 2021.

Then Colombia, the third largest coffee producer also had problems. Starting at the end of 2019 for a period of 4 months there were protests and a national strike that prevented part of the harvest to be collected, transported and sold. Even though Colombia has 2 coffee harvests per year, the strike from November to February coincided with the main harvest for most coffee regions which is from September to December.  And similar to Brazil, it leads to a shortage of coffee on offer which leads to an increase of prices. One year later, Colombia experienced the effect of the climate phenomena called La Niña, which is not favourable for coffee growing as it comes with rain and cold weather. The consequence was that the latest harvest from Colombia was 11% lower than the harvest of the year before.

Landslides in coffee farms in Colombia after La Niña

Additionally, Brazil, Colombia, Ecuador and other coffee producing countries suffered with the implications from the Covid-19 pandemic in terms of sick workers and limitations to hire workforce due to travel restrictions. Additionally, there were increased cargo costs and a shipping bottleneck due to reduced shipping container availability, port strikes and restrictions. This all translated into another increase of prices for green coffee.   

And finally, since we pay both our farmers and all transport costs in dollars we had to take into account the fact that by late 2021 the dollar was stronger against the euro than the year before.

So all together it is a combination of several unfavourable price increasing effects coming together at the same time that makes the price of coffee increase quite suddenly. One could say it’s the perfect coffee storm, and there is not much we can do about it apart from appreciating our daily cup of coffee even more.

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The Emperor of Galapagos

Coffee arrived at the Galapagos Islands in 1866 thanks to the “Emperor of Galapagos”, Manuel J. Cobos; who happens to be my great great grandfather, that is the grandfather of my grandmother Renee Alvarado Cobos.

Manuel J. Cobos was an entrepreneur who, together with his business partner Jose Monroy, in 1866 started extracting Orchella weed from Chatham Island, nowadays better known as San Cristobal. Orchella weed is a type of lichen from which red coloured dye is extracted.

In that year they started a company based on Chatham Island for the extraction of this lichen. They built houses for workers and a port and continued extraction until in 1869 the government gave the exclusive rights for extraction of this lichen on all the islands in Galapagos to another company. And so the partners left to go to Baja California, Mexico to continue there business with the extraction of Orchella. When commerce of Orchella declined to do the development of new chemical dyes, their business returned to Chatham Island in about 1879. This time Cobos lived on the island at his farm called “El Progreso” (the progress) while his partner stayed in Guayaquil to receive and commercialize all the products they intended to grow on the Galapagos Islands. They started by growing sugar cane and raising cattle and by 1889, 200 ha of sugarcane fields were planted while the resident population had almost doubled to 287. In the mean time Cobos made sure that his “hacienda” had enough infrastructure to sustain the growth and so it had a road; five workshops; separate facilities for sugar and alcohol production; two stores, a warehouse, an abattoir; two water reservoirs and field irrigation; three pastures and 17 garden sites; the hacienda main house and 60, mainly thatched, homes for government employees and labourers; and, three sloops, two smaller boats, a barge, and four scows in the bay at Puerto Chico. This year was a turning point in El Progreso’s transformation from agricultural farm into industrial center and sugar plantation by importing state of the art machinery for sugar production from as far away as Scotland, and acquiring technicians for its installation on San Cristóbal. Through a lot of work, effort and determination the farm “El Progreso” developed into an real island empire.

Manuel J Cobos (center) at the hacienda El Progreso

As a coffee aficionado Cobos had already experimented with coffee in 1866 with about 30 plants. He imported seeds from Arabica coffee varietal Bourbon from French colonies in the Caribbean under the assumption that the weather and soil conditions in Chatham Island where similar.  And indeed, the first experiments succeeded since the plants grew well. Then, upon his return to the island in 1879, more coffee was planted.  Reports said in 1891 about 40,000 coffee plants grew at “El Progreso” where each plant produced about a kilo of coffee seeds with 2 harvests per year. By 1905 the amount of coffee being cultivated had grown to an estimated 100,000 plants.  

My ancestor was known as “The Emperor of Galapagos” because of the great progress that his sugar cane plantation and later sugar mill brought, but also for the extension of his farm and everything he produced there: besides sugar cane, coffee and cattle also cassava, potatoes, corn and vegetables. But he also received that nick name because he ruled over his land and employees with firm hand.

At the end of the XIX century the Galapagos Islands were still pretty inhabited. Another entrepreneur Jose Valdizan settled on the island Floreana, also to extract Orchella. Both Cobos and Valdizan faced the same problem: lack of manpower. The islands were distant from the continent: about three days by boat. Even though the land was generous and crops grew easily in the islands, there was no infrastructure so people had no interest to neither live nor work there. One way, possibly the only way, to have manpower was to employ criminals recruited by Monroy and sent to work to “El Progreso” as part of their sentence. Due to the nature and character of the employees both Valdizan on Floreana Island and Cobos at Chatham Island had to rule with strict hand. This detail in history has led to plenty of controversy: were the punishments necessary, where they too strict? Fact remains that after turbulent periods both entrepreneurs were killed by rebels among their employees: Valdizan in 1878 and Cobos in 1904.

After the death of Manuel J Cobos, my great grand father Rogerio Alvarado, husband to Cobos’ daughter and principal heir, Josefina, assumed control of the hacienda in 1909. He was an ambitious man but he didnt have the character to succeed under difficult conditions. His plans failed to materialize, plunging the hacienda into debt with mainland banks and Guayaquil businessman Lorenzo Tous. Over the next eight years, equipment was sold and the hacienda receded into decay, the plantations were abandoned and the land turned into an inaccessible forest.  In 1990 the Gonzalez-Duche family bought the land from the government and renamed it “El Cafetal”.