September 30, 2019

Pricing Coffee: Why Do Yemeni Beans Cost More?

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Yemeni coffees can make headlines for their prices. And understandably so: they often sell for upwards of US $60 per kilo green. But why does Yemeni coffee cost so much? How much really goes to the producer? And why does it still offer value to roasters?

Let’s explore these questions, beginning on the terraced growing fields in Yemen’s mountains and going all the way to the roaster’s door. 

Lee este artículo en español Precio Del Café: ¿Por Qué Los Granos de Yemen Cuestan Más?

Yemeni coffee dries on raised beds in Shaia'an Farm, Al Qafr.

Coffee dries on raised beds in Shaia’an Farm, Al Qafr, Yemen. Credit: Sabcomeed

The Scarcity of Quality Coffee Cherries 

Many Yemeni coffee producers have small farms. “Some farmers have as little as 20 trees [whereas] our biggest farmer has, for example, 1,000 trees,” explains Abdulrahman Saeed, CEO of Sabcomeed, a direct trade partner for Yemeni producers.

A kilo of wet red coffee cherries might earn a producer US $1.50 to US $2.50, if they are working with specialty partners such as Sabcomeed. (Abdulrahman tells me that on the local market, they would typically earn US $0.35 to US $0.83.) 

It doesn’t sound like much, and the wild fluctuations of the Yemeni Rial can make it even harder to measure how much a coffee crop is worth. But for farmers, this can be the best way they have to support their extended family. Years of conflict have shrunk the country’s GDP by 38% since 2014. Abdulrahman tells me that producers often have limited work opportunities outside of coffee as a result. They might also produce fruit and vegetables, but it is mostly subsistence farming.

You might also like Tracing Coffee’s Roots Back to Al-Mokha, Yemen

Ripe cherries dry on a raised bed at a farm in Yemen

Ripe cherries dry on a raised bed at a farm in Yemen. Credit: Sabcomeed

Lost Coffee in Milling 

Abdulrahman tells me that the next step is processing at the mill. But this presents a challenge because “the best yield you can get is 10%. So, for every 10 kg of red cherries, after processing, you will get one kilo of dried beans green.” A standard ratio in other countries, he explains, would be 7:1 or 6:1.

That US $1.50/kilo of red cherries becomes US $15/kilo green going directly to the coffee producer. Milling and transportation costs then need to be added to the price.

But why does it take so many more red cherries to create a kilo of green? “The hulling machine is breaking a lot of green beans,” explains Gerardo Diaz, a Research and Development Consultant for Sabcomeed

“Also, our lots are really, really small. Between one lot and another, you’re supposed to clean the machine. You have a lot of coffee that might stay in the machine, in the elevators, for example. That’s a lot of waste.”

Simple fixes found in Latin America also won’t work due to Yemen’s unique geography. “I tried to implement a system where we measured the floaters of each lot we receive,” explains Gerardo. Defective coffee cherries are often hollow, meaning they float when placed in water. In Latin America, producers targeting the specialty coffee market often do this at the farm. 

“But due to the scarcity of water in the Yemeni mountains, it’s almost impossible to do it,” Gerardo continues. “Water, it’s so precious, that they don’t want to waste water to measure how much coffee floats.”

Coffee beans are hand sorted to ensure quality. Credit: Sabcomeed

The Cost of Infrastructure

“It’s been half a century or decades of neglect in agriculture,” emphasises Abdulrahman. This means that helping Yemen’s farmers produce high-quality specialty coffee requires a lot of hands-on attention. 

Low incomes place agricultural inputs and infrastructure, from fertilisers to dryers, beyond the reach of farmers. Abdulrahman points out that this means that Yemeni coffees are still produced in an organic and ecologically sustainable manner, as they have been for centuries. 

Gerardo, for example, is working with coffee producers on organic composting. This should increase the yield per tree and also decrease the percentage of defective cherries. Improved yield should boost incomes, helping producers to make more money without purchasing additional trees or land.

However, there are other types of equipment that are essential for producing specialty coffee. Abdulrahman tells me, “We have the costs of the [raised] beds as well… They need moisture devices, we need people with expertise to go to [the farms to] scan.”

Raised beds will allow the coffee to dry evenly, helping to prevent defects and contamination. Moisture metres facilitate the monitoring of the drying period, ensuring that coffees are only removed from the beds when they are dry enough.

In many producing countries, these costs are paid for by farmers, either out of their profits or through loans. In Yemen, however, many farmers do not earn enough to do this, nor do they have access to credit. Abdulrahman tells me, “The concept of microloans or loans or putting any risk on the farmer is zero. I don’t accept that at all.” Sabcomeed provides the infrastructure, further increasing the cost per kilo of the green coffee.

Coffee dries on raised beds in Yemen. Credit: Sabcomeed

Getting The Coffee to Port

Poor yields mean that some Yemeni farmers only produce 1 kg of green coffee. But this 1 kg requires a lot of support before it’s ready for export. 

“Sabcomeed have 14 full-time employees in four drying centres,” explains Abdulrahman, telling me about Operation Managers, Production Managers, and assistants. Because volumes are low, this means eight tonnes of exportable green coffee needs to support a staff of at least 15 full-time personnel. This quickly adds up to a high price tag. 

Then there are in-country transportation costs. Fuel costs US $12 per gallon, double what an average European pays and four times the average in the US. Yet transportation is required for everything from visiting coffee farms to getting the coffee to port. “You’re talking about multiple cars… sometimes 12, to be going in and out from the regions to deliver the [drying] beds,” says Abdulrahman. 

And because Yemen is in a geopolitical conflict, Abdulrahman says that there could be up to 60 checkpoints from a regional warehouse to the port. These could be anything from official checkpoints to ones manned by what he calls “thugs”.

He tells me that many checkpoints also expect some form of payment to pass through, not to mention the time spent explaining who you are and why you should be allowed to pass.

The Haraz Mountains in Yemen. Credit: Sabcomeed

Shipping Partially Empty Containers

Finally, the green coffee arrives in the port of Aden, ready for export. But costs begin to rise quickly here, too. 

Yemen’s civil war has crippled investment in shipping infrastructure, so coffee exporters invest considerable time finding a suitable container. “We have to find our own container… a clean container that is not rusty or salty from the inside,” explains Abdulrahman. His team are often the ones cleaning the container and adding insulators. 

Exporters must then handle the fact that they’re spreading high transport costs across small green coffee volumes. “You’ll laugh!” Abdulrahman tells me. “If we [were to wait to export a full 20-tonne] container, that’s going to take us a couple of years”. 

To get this shipping container to Dubai, “someone would quote us, let’s say US $3000 or $2000,” Abdulrahman tells me. “When it arrives in Dubai, then you have custom clearance, which will cost, let’s say, another US $3000.” 

But the costs ramp significantly when it comes to expediting green coffee to coffee roasters in Europe and the USA. Because roasters typically purchase micro-lots from specific individuals and communities of 25–50 kg, transportation costs alone can add up to US $10 per kilo from Yemen to the roaster’s door. 

Farmers inspect drying coffees at Shaia’an Farm, Al Qafr Region, Yemen. Credit: Sabcomeed

How Do You Value a Country’s Coffee?

Coffee prices are under scrutiny, no matter the origin. Today’s commodity C price is less than US $1/lb or US $2.20/kilo. This is a price that is causing many smallholder farmers across the world to consider abandoning their farms, even in the richest of producing nations, where infrastructure is sound and yields are relatively high. With Yemeni coffee, the cost of production is considerably higher.

By the time a Yemeni specialty coffee reaches the roaster, the costs have easily reached US $60 per kilo of green – if not more. US $15–25 of that would go to the coffee producers, not including the cost of infrastructure and milling. 

Damien Blackburn, Director of UK-based roastery Dark Woods Coffee, believes it’s important that coffee producers continue receiving a high percentage of the price. “The person taking the most risks deserves probably the highest benefit and income from [the high cost of Yemeni coffee],” he tells me. “If we can all work to actually pay higher prices for the coffee so that that value is passed back down the supply chain, that has to be a positive thing.”

Still, there is no denying that Yemeni coffee costs more than that of many other origins. Mohamed Ali Al Madfai, CEO of Emirati Coffee Co in Abu Dhabi, buys green coffee from producers in Al-Qafr, Yemen. For him, this matters more than maximising profits by selecting cheap origins. “Our main value is that we do believe that everybody deserves to drink delicious coffee,” he says, “and Yemeni is delicious coffee.” 

Vincent Ballot, Manager of SAS BVB la Grange in France, also sees the value in putting this origin on his menu. “It was obvious to propose Yemeni coffee in our range due to the central place of Yemen in the story of coffee.” He purchases green beans from Yemeni producer Mohamed Ahmed Al-Herwi in the Shaia’an region, via Sabcomeed. 

He adds, “And at the end, in the cup, 8 g of coffee represents less than €1!”

Enjoyed this? Read Tracing Coffee’s Roots Back to Al-Mokha, Yemen

Please note: This article has been sponsored by Sabcomeed

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