Crisis in Venezuela: impact on the coffee market

In recent months, international news has brought growing geopolitical instability in several areas of Central and South America back to the center of the debate. In particular, the crisis that has recently affected Venezuela – with the concrete risk of tensions spreading to other countries in the region such as Colombia and Mexico – is raising significant questions about the possible economic, social and commercial effects at a global level.

Our company – Il Caffè Manaresi – is part of the fabric of Italian SMEs, the Small and Medium-sized Enterprises. So valuable and distinctive for Italian identity and authentic Made in Italy. Global and macroeconomic events have a significant impact on companies like ours which, with a production capacity that is still artisanal in nature, have fewer tools than large industry players to deal with unpredictable events that can alter the balance of prices and raw material supply, in our case coffee.
This is why the stability of an area as important for coffee as Latin America is also in our interest and in the interest of the final consumer, who accompanies their day with an irreplaceable cup of coffee.

Latin America, the beating heart of global coffee production

For decades, Latin America has played a central role in global coffee production, particularly when it comes to high-quality Arabica varieties. A large share of the coffee used by Italian and European roasters comes from Central and South America, with countries such as Brazil, Colombia, Honduras, Guatemala and Mexico representing long-standing benchmarks in terms of volume, quality and production know-how.

The political, economic and social stability of these regions is therefore a key factor in ensuring continuity of supply, consistent quality standards and reliable planning of imports to Europe.

Political instability and repercussions on coffee agricultural production

Geopolitical tensions and internal crises can affect coffee production both directly and indirectly.

In unstable contexts, producers may be forced to:

• face a reduction in investment in plantations;
• difficulties in access to credit;
• an increase in production costs;
• uncertainty about the future.

These challenges are compounded by operational issues related to coffee harvesting and processing, which require seasonal labor, efficient infrastructure and adequate safety conditions.

In many cases, the difficulties do not concern cultivation alone, but involve the entire local supply chain, from the maintenance of rural roads to the operation of ports and export hubs.

Logistics, transport and trade routes under pressure

Another element of fragility concerns international logistics. Green coffee travels mainly by sea and depends on stable trade routes, sustainable transport costs and reliable insurance systems.

Rising geopolitical tensions can result in:

• delays in shipments;
• an increase in insurance premiums;
• greater complexity in customs operations;
• the need to reorganize traditional routes.

All of these factors have a direct impact on delivery times and procurement costs for European roasters, who must adapt to an increasingly uncertain scenario.

Prices, financial markets and volatility of coffee quotations

Coffee is a globally traded commodity and is particularly sensitive to market expectations. Even the simple fear of possible disruptions in the supply chain can fuel speculative phenomena and contribute to greater price volatility.

In recent years, these geopolitical factors have been compounded by extreme weather events linked to climate change and global inflationary dynamics, making the coffee market increasingly complex, unpredictable and difficult to interpret. In this regard, we invite you to read our previous article Increase in green coffee prices and procurement costs.

Challenges for the European and Italian market

For the European market, and particularly for the Italian one, these dynamics translate into the need for an increasingly careful and strategic management of supply.

Diversifying origins, building direct and long-lasting relationships with producers, gaining in-depth knowledge of supply chains and paying attention to social and environmental aspects become essential tools to ensure continuity, quality and transparency.

In a complex international context, the ability to anticipate risks and adapt quickly to change represents a decisive competitive advantage.

A supply chain that requires vision, responsibility and awareness

For a historic roastery like ours – Il Caffè Manaresi – closely observing international current affairs means fully understanding the value and fragility of the coffee supply chain.

Every cup is the result of a journey that begins far away, in the countries of origin, and passes through economic, social and political contexts that are often complex.

Addressing these challenges with awareness, responsibility and a long-term vision is an integral part of a constant commitment to quality, respect for the work of producers and the continuity over time of a tradition that looks to the future.