The Asdrúbal López Coffee Processor, in Guantánamo, is on the brink of bankruptcy. The company, which used to be “one of the most efficient and prosperous in the province,” according to the local press, reported losses of up to 300 million pesos this Friday. The causes: selling coffee for national consumption at a price lower than that paid to producers and receiving unfair compensation for their exports.
Osmel de la Cruz Cala, general director of the state company, assured the newspaper overcome that Your company is among the twenty organizations reporting alarming losses at Guantanamo. The most critical point, he says, was in 2021, when a ton of Robusta coffee was bought for 96,000 pesos and sold for only 46,000. This imbalance, which reached 50,000 pesos, had to be covered with the company’s profits.
The situation experienced a slight improvement in 2022, with the increase in the sale price –70,000 pesos– to the roasters, but also increased the amount that was delivered to the producers, some 102,000 pesos per ton. The total loss, not as severe as in 2021, was 32,000.
However, De la Cruz points out that the money lost is not reduced only to the payment to the producers: adding the operating costs, the deficit easily reaches 52,000 pesos. The coffee, he explained, leaves Yateras for Havana and that transportation is paid by his company. To the process “you have to add another 20,000 pesos for processing costs, transportation and salary,” he explained.
De la Cruz pointed out that 497 tons of the 2,300 that they processed in the last harvest were destined for export, where they did achieve prices higher than those planned.”
Asdrúbal López suppliers work in the Nipe-Sagua-Baracoa massif, the mountainous area between Guantánamo and Holguín, as well as in the Holguin municipality of Sagua de Tánamo. More than half of the coffee it receives is of the robust variety (a more bitter taste) which is mainly used for the preparation of the product, mixed with peas, of the Hola brand, popularly called “cafetín”, for sale in the market. rationed. While the Alto Serra, Serrano and Caracolillo brand are for export.
De la Cruz pointed out that 497 tons of the 2,300 processed in the last harvest were destined for export, where prices were higher than planned and “the country won.”
The processor bought a ton of Arabica coffee for 228,000 pesos (of more fruity notes and more valued in the international market) and managed to sell it for up to 5,000 dollars. But in this they also encountered problems due to the devaluation of the Cuban currency, since at the official exchange rate of one dollar for 24 pesos the result was 120,000 pesos for each ton.
The manager assured the provincial newspaper that at the end of last year a “saving table” arrived, which allowed them to place their products at a differentiated price in shops in freely convertible currency (MLC). “We negotiated a ton of coffee at 250,000 pesos so as not to lose for the first time since the start of the Ordinance Task and earn 4 million pesos, which was not enough, but they still managed to reduce losses to 118 million,” he explained.
The company should earn enough from the sale by agreement to offset the losses, De la Cruz said. Also “we must equate what we dedicate to national consumption with what we sell at the border,” he said, without going into details in proposals if the option is to reduce the price per ton purchased from the producer or raise the price to the final consumer.
De la Cruz proposes that in order to reduce the deficit, the exchange rate should be improved from 1 dollar for 24 pesos (official rate for companies) to 1 for 120 (rate for individuals).
Despite its losses, Asdrúbal López is the main exporter in the sector. In 2020, the Cuban government assured that Its “regular” clients are Europe, Asia and Oceania, and that it even had certifications on the quality of its grain to make its way into specialized markets, where the price of the aromatic is higher than that quoted on the stock market through Contract C (a special international mechanism to buy coffee from 19 producing countries).
De la Cruz proposes that to reduce the deficit the exchange rate should be improved from 1 dollar for 24 pesos (official rate for companies) to 1 for 120 (rate for individuals). With this modification, the company would have charged 600,000 pesos for the 5,000 dollars of export sales, instead of the 120,000 it received. This would have made it possible to offset the losses in the domestic market, which are unavoidable due to the price imposed by the Government.
Consulted by the local newspaper, Yunier Oliva Batista, provincial director of Economy and Planning, considered that a solution is to establish a floating exchange rate of one for 85, to increase the profitability of exports, three times above the proposal of the company.
De la Cruz Cala considered that the “greatest suffering” will be in the long term and that the company’s financial crisis “is already taking its toll on us.” He explained that investors in three foreign capital projects first check the financial statements before becoming partners. “They don’t understand design losses,” she lamented.
The bank also tightens the rope on them, he added, because since they cannot honor their debts until Finance deposits the money, it penalizes them with higher installments. Until last January they paid 1.1 million pesos only in interest.
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