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A trip through the costa rican
coffee industry
STC: who are we?
STC has been set up to bring a transparent trading platform
for local coops and producers.
STC brings pre...
STC: who we de?
STC brings pre financing, traffic, hedging, marketing and
commercial solutions to our key suppliers.
We ac...
STC: from who do we trade?
STC: from who do we trade?
STC: from who do we trade?
STC: from who do we trade?
Basic facts
2,483
2,111
1,939
2,103
2,316
2,162
1,945
1,894
2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
Production...
2,007,775
1,758,581
1,600,632
1,455,455
309,090
403,784
282,459 214,175
2011/12 2012/13 2013/14 2014/15
Export vs Local co...
60,483
46,803
2003/04 2013/14
Growers
95
210
2003/04 2013/14
Millers
2014/15 production per grower: 46.5 qq
Average size o...
2009/10 2010/11 2011/12 2012/13 2013/14
Independent 128 139 153 173 180
Coop 23 23 22 20 20
Multinational 10 10 9 10 10
Mi...
764,273
597,149
441,226
642,014
1,618,691 1,648,395
1,505,487
1,252,945
2011/12 2012/13 2013/14 2014/15
Grade breakdown
Hb...
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
Coto Brus Los Santos Perez Zeledon Turrialba Valle Centra...
The processing chain
Harvest: nov./march
Nov. Jan.Dec. Feb.
Low areas High areas
Dec. Jan.May. July.
Coffee delivery
Coffee delivery
Coffee delivery
Wet process
Wet process
Dry process
Sorting
Export
Pricing policy
Icafe
‘Adelanto’
El ‘adelanto’ is a portion of the final (unknown) that
millers pays to get the cherry.
Main components for gett...
‘Adelanto’
‘Adelanto’
How final price to farmers is
set
Each and every export contract fixed must be
immediately reported to Icafe.
Icafe will r...
From FOB to ‘Rieles’
FOB price is paid to the exporter.
According to the law, the Exporter will pay the
Mill based on a ‘R...
Laws
Social welfare
Every employees must be reported to the
Costa Rican social welfare.
Mills pay social security for their emp...
Water treatment
The Ministry of Environment controls the
quality of treated water from the mills.
By-product treatment mus...
Working condition
The Ministry of Work control if the right of
employees is fully respected, wages paid and
minimum wage r...
Micro lots
Suppliers
We work mainly with:
- Micro mills / Estate coffee
- Association of farmers
Micro mills: supply their own coffee...
Traceability
Each and every lot comes from a specific
farm.
Coffee is identified since the delivery of the
cherry and will...
Quality
Cupper generally select coffees up to 86 points
based on the SCAA cupping scale.
STC does a pre selection, identif...
Transparency and price
discovery
Price is negotiated directly with the
Association or Growers (Estate / Micro mills).
The ...
Packing
Packing is mainly done in 69 kgs bags with
GrainPro.
However, smaller amount (35 kgs) or vacuum
are also available.
Challenges
San Jose City
San Jose has grown where the former coffee
park.
Central Valley has grown substantially,
replacing coffee tr...
Generation
Young people lost faith and desire in growing
coffee. Most of the farms that are passing
through the new genera...
Profitability
In Tres Rios the price of square meter is
$300:
- Real estate: 1,000 m2 x $300 = $300,000
gross
- Farm: 25 q...
A trip through the Costa Rican coffee industry
A trip through the Costa Rican coffee industry
A trip through the Costa Rican coffee industry
A trip through the Costa Rican coffee industry
A trip through the Costa Rican coffee industry
A trip through the Costa Rican coffee industry
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A trip through the Costa Rican coffee industry

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STC has been set up to bring a transparent trading platform for local coops and producers.

STC brings pre financing, traffic, hedging, marketing and commercial solutions to our key suppliers.

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A trip through the Costa Rican coffee industry

  1. 1. A trip through the costa rican coffee industry
  2. 2. STC: who are we? STC has been set up to bring a transparent trading platform for local coops and producers. STC brings pre financing, traffic, hedging, marketing and commercial solutions to our key suppliers. We promote transparency and traceability thanks to our contract model. STC has strategic partnership based on long term relation with suppliers located in the main producing areas as well as international coffee buyers. Five employees oversee Trading, Traffic, Administration and Cupping tasks.
  3. 3. STC: who we de? STC brings pre financing, traffic, hedging, marketing and commercial solutions to our key suppliers. We act mainly as broker so as to bring a full transparency and traceability. We support our suppliers, submitting export service if needed. Coffee is milled, sorted and shipped directly from our supplier facilities. We work with fully integrated supplier, from cherry to container. More: www.stc-coffee.com
  4. 4. STC: from who do we trade?
  5. 5. STC: from who do we trade?
  6. 6. STC: from who do we trade?
  7. 7. STC: from who do we trade?
  8. 8. Basic facts
  9. 9. 2,483 2,111 1,939 2,103 2,316 2,162 1,945 1,894 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 Production - '000 46 kgs - 2014/15 productivity: 21 qq/hect.
  10. 10. 2,007,775 1,758,581 1,600,632 1,455,455 309,090 403,784 282,459 214,175 2011/12 2012/13 2013/14 2014/15 Export vs Local consumption – 46 kgs Exportation Local consumption 86.6% 81.3% 82.2% 76.8%
  11. 11. 60,483 46,803 2003/04 2013/14 Growers 95 210 2003/04 2013/14 Millers 2014/15 production per grower: 46.5 qq Average size of farm per grower: 1.9 hect.
  12. 12. 2009/10 2010/11 2011/12 2012/13 2013/14 Independent 128 139 153 173 180 Coop 23 23 22 20 20 Multinational 10 10 9 10 10 Millers:
  13. 13. 764,273 597,149 441,226 642,014 1,618,691 1,648,395 1,505,487 1,252,945 2011/12 2012/13 2013/14 2014/15 Grade breakdown Hb Shb 68% 73.4% 77.3% 66.2%
  14. 14. 0 100000 200000 300000 400000 500000 600000 700000 800000 900000 Coto Brus Los Santos Perez Zeledon Turrialba Valle Central Valle Occidental Guanacaste Productionper46kgs Production trend per area Coto Brus 10% Los Santos 27% Perez Zeledon 16% Turrialba 7% Valle Central 14% Valle Occidenta l 25% Guanaca ste 1% Production breakdown per region
  15. 15. The processing chain
  16. 16. Harvest: nov./march Nov. Jan.Dec. Feb. Low areas High areas Dec. Jan.May. July.
  17. 17. Coffee delivery
  18. 18. Coffee delivery
  19. 19. Coffee delivery
  20. 20. Wet process
  21. 21. Wet process
  22. 22. Dry process
  23. 23. Sorting
  24. 24. Export
  25. 25. Pricing policy
  26. 26. Icafe
  27. 27. ‘Adelanto’ El ‘adelanto’ is a portion of the final (unknown) that millers pays to get the cherry. Main components for getting cherry are function of the competitive position of each mill in their respective area, post/pre harvest services, harvest volume and international prices/differentials, short/long position of the mill, etc… By law, mills cannot buy the coffee at a firm price and must give the chance to the growers about better levels if the market rally. On the other side, they are responsible to guarantee the ‘adelanto’ as a minimum price, even if the market drops…..
  28. 28. ‘Adelanto’
  29. 29. ‘Adelanto’
  30. 30. How final price to farmers is set Each and every export contract fixed must be immediately reported to Icafe. Icafe will register and publish each and every contract declared by millers and calculate the average price. At the same time, Icafe will control that export volume is in line with the harvest reported. Export cuota depends on the 2 previous harvest size. Mills will have to declare their costs, exchange rate that will be deduced from the final payment to farmers. Such costs must be approved by Icafe before having the final and official ‘liquidacion’.
  31. 31. From FOB to ‘Rieles’ FOB price is paid to the exporter. According to the law, the Exporter will pay the Mill based on a ‘Rieles’ price, that means a net price discounted by: • 1.5%: Icafe fee • $2.79/46 kgs as export costs
  32. 32. Laws
  33. 33. Social welfare Every employees must be reported to the Costa Rican social welfare. Mills pay social security for their employees and must apply the costa rica law.
  34. 34. Water treatment The Ministry of Environment controls the quality of treated water from the mills. By-product treatment must also respect the law. Each and every mill have a system of water and pulp treatment in place.
  35. 35. Working condition The Ministry of Work control if the right of employees is fully respected, wages paid and minimum wage respected.
  36. 36. Micro lots
  37. 37. Suppliers We work mainly with: - Micro mills / Estate coffee - Association of farmers Micro mills: supply their own coffee, coffee that have been bought from neighboors or are used as processing plant for individual farmers. Association are used as processing center and process coffee from their own members.
  38. 38. Traceability Each and every lot comes from a specific farm. Coffee is identified since the delivery of the cherry and will be processed, dried and store separately. A technical sheet will be designed and coffee marked with the name of the farm and producer. A GPS point allows the buyer to locate his
  39. 39. Quality Cupper generally select coffees up to 86 points based on the SCAA cupping scale. STC does a pre selection, identifying the best lots. For ‘repeated’ coffee, STC locked the coffee with the owner so as to give the buyer the ‘first priority’. For new coffee, STC send samples or host cupping events at the office, combined with field
  40. 40. Transparency and price discovery Price is negotiated directly with the Association or Growers (Estate / Micro mills). The price is the result of: - Quality - Process - Varietal - Demand - Long term comitment
  41. 41. Packing Packing is mainly done in 69 kgs bags with GrainPro. However, smaller amount (35 kgs) or vacuum are also available.
  42. 42. Challenges
  43. 43. San Jose City San Jose has grown where the former coffee park. Central Valley has grown substantially, replacing coffee trees by offices, houses, plants… The all Tres Rios, Curridabat, Heredia area is almost ‘gone’.
  44. 44. Generation Young people lost faith and desire in growing coffee. Most of the farms that are passing through the new generation are sold. Price level and uncertainty, combined with other alternatives explain such choice. The micro lot trend impact positively however.
  45. 45. Profitability In Tres Rios the price of square meter is $300: - Real estate: 1,000 m2 x $300 = $300,000 gross - Farm: 25 qq x $200 = $5,000 gross

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