Optimism and hope for 2023 after tough challenges in 2022

Optimism and hope for 2023, as the effects of the pandemic still brought up challenges to coffee farmers and Cooxupé in 2022.

Specially for the co-op, there were challenges regarding logistics for shipments, which demanded flexibility to minimize impacts in exports.

Furthermore, the key points of attention for coffee farmers were market downturn, climate issues, lower harvest and risk propensity to indebtedness.

On the other hand, the co-op did not stop investments. Most of them were carried out according to the Strategic Planning guidelines.

2023 is here. And, when we look to the future, we have a mix of feelings. That’s why Cooxupé’s Board of Directors believes that hope and optimism will be present in next months.

Hub do Café brings a 2022 review, and 2023 prospect from Carlos Augusto Rodrigues de Melo, Cooxupé’s President Director, and Osvaldo Bachião Filho, Vice-President.

Hub do Café: WHAT WERE THE MAIN CHALLENGES EXPERIENCED BY THE CO-OP AND ITS MEMBERS IN 2022? WHAT IS THE BALANCE?

Carlos Augusto: Similar to previous years, 2022 was full of challenges. Some of them came from 2021. In this regard, we cannot forget about the pandemic period.

In addition, the war in East Europe has brought upheaval, specially to logistics.

Thus, by the beginning of 2022 we had serious problems related to coffee shipments to international market.

Yet we could successfully work it out. Then we’ve seen some significant improvement in this matter, and we could ship great volume of coffee.

We are also very close to meet our goals. Some alternatives, like unusual methods of shipping have been part of our strategy.

Therefore, logistics have been a major defiance, assuming that exporting is the co-op’s greatest challenge. Not by warehousing infrastructure, but mostly by cash flow.

If coffee doesn’t meet the international buyer, Cooxupé doesn’t receive the funds. This kind of issue affects, specially, the producers’ needs.

Hub do Café: WHAT ABOUT THE ACHIEVEMENTS? WHICH WERE THE MAIN ONES IN 2022?

Osvaldo: The co-op’s greatest achievement, in short, is reaching the end of the year with the capacity to support and help the members to settle their distresses. For instance, issues caused by the weather, as frost, drought, high temperatures and, recently, hailstorms.

Another key point concerns production and retraction in prices of commodities. Even in face of all these obstacles, our results will allow the co-op to return resources to members according to their participation in 2022.

In addition, the co-op has accurately accomplished the investment proposal for the year, according to its Strategic Planning.

Hub do Café: HOW WERE THE INVESTMENTS APPPLIED? AND, WHAT ARE THE PROJECTIONS FOR 2023?

Carlos Augusto: Obviously, the investments were applied by area. Amidst which, structure and IT to keep Cooxupé in good conditions to give satisfactory support to members. In this case there were more than BRL 100 mln in investments.

At Japy Industrial Complex, for instance, more than BRL 55 mln were invested. It is worth mentioning that the investments in 2022 amounted the highest value in Cooxupé’s history.

And we are hopeful in 2023 for good production, and for the return to previous higher levels in the near future.

We hope, above all, that our members may have the same mind: to go to 2023 hopefully; to recover higher productivity and reach better production.

Also, we want them to always be sure that Cooxupé is ready to receive their production and offer them the liquidity they need.

Hub do café: ABOUT PRODUCTION AND PRODUCTIVITY, HOW DOES COOXUPÉ EVALUATES THE INBOUND COFFEE IN 2022?

Osvaldo: The entire year was full of challenges before such a small harvest. Expectations were, primarily, that 2022 harvest was going to be a little bit smaller, similar to 2021. However, we had an issue with a break in production, which caused 2022 harvest to be even smaller than expected.

In addition, we also saw dropping prices by the end of the year. As a consequence, the harms were more severe to those producers that couldn’t participate in the market when prices were higher.

So, coffee farmers experienced record BRL price in February, and a drop at the end of the 2022.

Not least, there was also the question of interest rates in Brazil, which are too high as a consequence of global issues. By the way, the rates are alarming.

Hub do Café: IN THIS SCENARIO, HOW DO YOU SEE THE PARTICIPATION OF MEMBERS IN COFFEE MARKET?

Carlos Augusto: The co-op states to members that they’d better participate in the market when the opportunity is favorable. Therefore, the market is sovereign.

It’s worth mentioning that, however, the producers need to be always attentive to take part in moments of good opportunities. Such participation has evolved a lot in recent years.

Although, I remark the participation of the co-op members in Cooxupé’s Especialíssimo, our specialty coffees program. The participation of farmer families in 2022 was substantially higher. Also, the level of quality of coffees was surprisingly and highly competitive.

Either with higher or lower harvest, definitely, the producers will always seek better productivity and quality for their coffees.

These figures meet the global demands received by Cooxupé. The world currently searches for sustainably sourced coffees, which strengthens ESG-related questions. And coffee farmers have already walked great strides in this direction.

In 2022 we had coffees with very high quality, and we hope it will be the same in 2023. I’m pretty sure that producers won’t give up searching for that quality.

Hub do café: STILL TALKING ABOUT MEMBERS, HOW DID THEY BEHAVE IN 2022?

Osvaldo: Despite challenges were great, the participation of members was remarkably good.

They’ve been highly loyal to the co-op, especially regarding ag inputs.

Cooxupé has been able to deliver the products producers need in the right time, and for a good market price.

Concerning coffee, we see great challenges for production, as mentioned before. But the overall participation of our members in the business of coffee was satisfactory in 2022.

Hub do café: WHAT KEY POINTS DOES COOXUPÉ CALL MEMBER FAMILIES’ ATTENTION TO?

Osvaldo Bachião: When looking at all scenarios, in this moment, we see downward coffee prices.

Global scenario is still impacted by the war and other factors, as well as high interest rates.

Therefore, to relieve families in this moment, we must take great care with indebtedness.

Hub do café: IN 2022, COOXUPÉ GAVE IMPORTANT STEPS FOR SUSTAINABILITY AND ESG AGENDA IN 2022. HOW IS “GERAÇÕES PROTOCOL” GOING TO BENEFIT MEMBER FAMILIES?

Carlos Augusto: “Gerações”, Cooxupé’s sustainability protocol, enables great opportunities for members to be included in the universe of sustainability.

The protocol is meant to be an easy-access portal for our producers, so they can experience and venture the world of sustainability, succession and progressively better management inside the farm, and inside the co-op.

The protocol is distinguishable for being inclusive and for congregating either small or big producers.

It is also worth mentioning that Gerações does not apply any kind of “punishment” to producers.

On the other hand, the Protocol is thoroughly designed and adapted to the member producers’ reality. The objective is to enable the farmers to advance in sustainability and, thus, grow up in competitiveness in face of consumers and market’s demands.

In advance, our co-op has been working out sustainability matters for years. We see that being in the vanguard is necessary.

By means of “Gerações”, in addition, all members can prepare, adequate and advance in sustainability levels proposed by the Protocol, no matter the size of farmer’s production.

The distinguishing point is that we’ll always be side-by-side with the producers. And sensitive to each one’s reality. Therefore, every family will have the opportunity to evolve in an inclusive and sustainable way.

Hub do café: AFTER THE CHALLENGES IN 2022, WHAT IS THE MESSAGE FOR THE MEMBER FAMILIES FOR THE NEW YEAR?

Carlos Augusto: The members, first and foremost, have to be aware of good opportunities for participating in the coffee market, avoiding indebtedness.

The harvest will be smaller again, though, there are factors that drive our optimism. Firstly, and clearly: nobody will stop drinking coffee.

Secondly: Brazilian coffee is quite important to the world, and will continue to be.

And finally, coffee overcame all obstacles we lived with the pandemic. There are climate factors, the war, and political and administrative changes ahead in Brazil.

Therefore, we will keep doing our homework as we’ve always been. I’m full of hope that we will experience a 2023 equivalent, or even better than 2022. We have lots of reasons to keep being optimistic.

Osvaldo: An important highlight is that Cooxupé is going to resume presential events in 2023. Including, for instance, Femagri, Feira do Cerrado and Dias de Conhecimento.

We will be waiting for our members in all of the events, as we’ve been waiting for the opportunity to be together again.

Also, we want to strengthen our relationship with the families. They will have the possibility to closely see all that’s been developed during the period we’ve been physically separated.

It’s a great moment! And, conclusively, we are anxious to live all of this again. We’re sure we’re strong to overcome challenges, especially moved by the passion we feel for coffee.