You’ve worked hard all year, carefully pruning, fertilizing, harvesting, processing, and drying your coffee. But the work doesn’t stop here: now you need to prepare your crop for export.
Whether you’re exporting it yourself and selling it direct to the roasters, or whether an importer has bought your coffee, following best practices can result in better coffee quality, better business relationships, and better prices paid.
And following bad practices? You might see cup scores dropping dramatically – and your profits with them.
So, let’s take a look at how to prepare your coffee for export.
Lee este artículo en español Guía Del Productor: Cómo Preparar El Café Para La Exportación
Coffee is stored, awaiting export, in a warehouse in Brazil.
How Much Responsibility Do You Have?
Some producers sell their coffee to an exporter, allowing them to take care of the actual transportation of the coffee. Others work with a direct trade roaster, which in theory (but not always) should result in higher prices paid, or with an importer. In this case, they may need to arrange for coffee to reach the port themselves. And some producers branch out, becoming producer, miller, and exporter.
Which path you choose depends on your goals for your business, your customers, your marketing, the contracts you sign… and more.
Matti Foncha manages Cameroon Boyo, a Cameroon-based farming collective that exports its own coffee. He tells me, “It is important for producers to have a clear vision of their trade objectives, as well as the options that they will or are likely to face at important points as their coffee travels to the end market.”
You might also like: How to Ensure Green Coffee Quality in Transit & Storage
A coffee grower picks the ripe cherries off coffee trees in Chiapas, Mexico. Credit: CONACYT
Understand Your Contract
Even if you’re not exporting your coffee yourself, you will probably still have a certain level of responsibility for it during the exporting process. How much depends on the INCOTERMS in your contract.
If you’re not familiar with INCOTERMS, they can seem like a different language. But really, they’re just a set of terms that define the point up to which you stop being responsible for the coffee – for its quality, for its transportation, for its paperwork, and more
And as Matti reminds me, “the point of delivery is not always the same as the location or point where legal ownership changes from producer to buyer.”
As an experienced exporter, Matti agreed to explain some of the most common INCOTERMS to me:
- FOB – Free On Board: “The producer adheres to all export regulations and fees until coffee is loaded onboard the transporting vessel; buyer pays for ocean freight and insurance.”
- EXW – Ex Works: “The buyer takes ownership and assumes the movement and storage risk from [the moment that they take ownership].” This normally refers to overland shipping from a warehouse.
- CFR – Cost and Freight: “Producer/exporter delivers coffee, typically to its port of discharge; buyer pays for insurance (the producer may be responsible for any spoilage and shortage arising from transportation if coffee is not properly packaged).”
- CIF – Cost Insurance Freight: “Producer/exporter pays for the product up to the port of discharge, including insurance; the buyer is responsible for importation charges.”
Discover more INCOTERMS! Read A Coffee Buyer’s Glossary of Contract Terms
Producers, before you sign a contract or agree to a price, make sure you know exactly what INCOTERM is being discussed and what it means for you. CIF can be much costlier, and much riskier, than FOB.
Exporting Yourself: The Risk vs The Opportunity
So, should you export yourself? Sell to an in-country buyer? Negotiate FOB contracts with direct trade roasters or specialty importers?
This is a big decision. The more responsibility you take for exporting, the greater the risk, the greater the cost, and the greater the opportunity for profit.
In theory, exporting coffee should lead to a greater income. So too should FOB compared to selling to an in-country buyer. But this depends on your systems.
Transporting coffee in poor conditions can see you operating at a loss (in certain packaging, even if stored correctly, coffee can lose as much as 10 cupping points in a year). Inefficiency can see costs rise faster than income. And bad luck can hit even the most organised and cautious of producers.
Find out more! Read How to Ensure Green Coffee Quality in Transit & Storage
You also need to consider your:
- Cash flow – do you need to be paid straight away or can you wait until you’ve exported the coffee to the destination country and then sold it?
- Coffee quality – certain lots will be more worth the greater investment
- Destination and transportation options
And remember, the decision will also depend on what your business partner wants – and on your contacts and marketing. After all, deciding to work with a direct trade roaster is easy. Finding one and signing a business contract can be a lot harder.
Bags of green coffee are stored in a warehouse until it’s time for export. Credit: Matti Foncha
Practical Points You Need to Consider
Newerley Gutierrez, a producer and exporter from Monteverde Coffee Farm, Tolima, Colombia has over 15 years of coffee experience. She tells me, “If you want to export directly, you must learn how to do so appropriately. None of us was born knowing how to export, but it is something you must learn, and you must be prepared to meet the requirements to which you’ve committed yourself to.”
But this is true whether you’re exporting or merely selling your coffee to an in-country buyer or coyote. There are many practical points you should consider, in order to maintain your coffee quality, ensure timely delivery, and ultimately satisfy your business partners.
Because after so much hard work, you don’t want to lose a sale or be forced to refund buyers because the coffee was delayed in transit, damaged, or simply not in line with expectations.
So, let’s take a look at some of the things you should be considering:
Coffee cherries, freshly picked and ready for processing, in Colombia. Credit: Angie Molina
Negotiating & Pricing
A successful coffee sale must begin with a buyer. It’s time to adopt a more commercial mindset.
In a sale, you must always be aware of the real price of the coffee. This means knowing the fluctuations of the international market, the quality and value of your coffee, how much it costs to produce that coffee, and how much a certain offer actually represents.
Newerley explains, “An important aspect of selling is that producers must become aware of managing simple things like the conversion from US dollars to pesos, American pounds to kilos, or the conversion from parchment to green.”
Bags of Brazilian coffee. Credit: Ana Valencia
As Chris Kornman wrote on PDG, “Tasting and approving samples prior to purchase is a critical stage in the coffee-buying process… Contracts and expectations should take into account when and where the coffee is sampled, and who is responsible for its quality preservation at any given time.”
If you’re selling directly to roasters, they will want to see samples. It’s a matter of agreeing with your roaster about what samples, when they will arrive, and what each party is responsible for. Then, just make sure you stick to the set schedule.
This has a huge impact on both coffee quality and successful business deals.
Matti believes the ideal time frame “from harvest to the port of export should be within three to six months.” Why the variation? Because coffee is harvested and dried in different batches but later exported together. Make sure that all coffee within a lot falls within this three-month range.
This may dictate your processing schedule, too. Matti says, “Pulping, fermenting, washing, and cherry drying should take place within hours of harvesting, not days. [But] dried cherries and parchment could be stored for some months. Dry milling should only be initiated when the full volume of coffee to be exported is ready and beans should be protected and sent to port as soon as possible after dry milling.”
Lirios de Belén coffee mill in Atitlán, Guatemala. Credit: Ana Valencia
Between harvesting/processing and exporting, your coffee will wait in your warehouse. And the conditions there can have a huge impact on the coffee quality. Poor conditions can quickly fade your coffee, leading to reduced flavours, aromas, and ultimately cup scores. Make sure to:
- Keep the humidity level, temperature, and oxygen levels stable and relatively low.
- Keep coffee out of direct sunlight.
- Choose the right packaging. Burlap bags are cheaper but they won’t protect your coffee from moisture or oxygen.
Learn more! Read Green Bean Storage: What Factors Do You Need to Control?
On the topic of packaging, you should consider this both in the warehouse and during exportation/transportation. Good-quality packaging will minimize the risk of a loss of coffee quality – although it will often come at a higher price. This should be discussed with the buyer beforehand, and the contract should state what packaging will be used and who will pay for it.
Bags of green coffee. Credit: Ana Valencia
Remember that transportation can be delayed due to unexpected traffic, accidents, poor organization, and many other factors. This is another reason why good packaging is so important: you can never be completely sure how long it will take the coffee to arrive.
However, you want to minimize delays. Try to keep to your own schedule. According to Newerley, the most common reasons for a delayed export include “unexpected delays in the processing of coffee in the dry mill” which in turn causes a “delay in leaving for port, and in turn a late arrival.”
Local & International Regulations
Do you know the legal requirements for exporting coffee from your country? What about importing coffee into the destination country?
Matti tells me, “Since many of the processes are regulated by governments, the producer/exporter must be fully familiar with them or must hire the services of export agents to ensure success.”
Your coffee will also no doubt need to be accompanied by paperwork. Make sure to have multiple copies of it.
Matti suggests, “Producers wishing to directly export their coffee should ideally prepare a checklist and a flow chart indicating the governmental and port logistics authority requirements – documentation, drayage of container within the port, payments, etc.”
These provide a visual representation of what will be expected of you (and the buyer) at every stage, meaning your delivery is less likely to be delayed because you didn’t get the right signature on a form or nobody purchased insurance.
Kwang Jung Ahn, left, and Ho Jung Kang, right, inspect drying coffee on a visit to Cameroon Boyo. Credit: Matti Foncha
Preparing coffees for export: it isn’t easy, but it’s worth all the effort. Paying attention to packaging, paperwork, the export schedule, and more can protect your coffee quality, ensure buyers remain satisfied, and ultimately result in better prices and longer-lasting business relationships.
Enjoyed this? Check out: How to Ensure Green Coffee Quality in Transit & Storage
Written by Isabela Minondo.
Perfect Daily Grind
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