Recently, reports have surfaced of a devastating strain of Roya, or coffee leaf rust, emerging on farms all over Guatemala. Roya is a constant challenge for farmers, particularly those using little or no chemical agents, but this current manifestation is purportedly the most virulent to date. Some anecdotal reports have said 40% Guatemala's coffee trees could be infested. All of the rain in the wintertime, which had already caused a lot of damage (including the destruction of ASOBAGRI's facilities due to mudslides), provided an ideal crucible for the rust to develop. Roya generally is more of a problem at lower altitudes, where warmer weather allows it to thrive, but this recent strain is more suited to higher elevations, where the better coffees grow. Obviously, producers in the other Central American countries are quite nervous about the strain spreading and wreaking further havoc.

In addition to the potential supply disruptions and concomitant global market volatility, there is a challenge here for the specialty industry as well. High altitude Central America coffees are among the best in the world, and many farms there are pioneering efforts to develop more sustainable production. If Roya is an enduring challenge, many of these farmers will be forced to apply chemical pesticides or risk losing their crop. This will result in lower volumes of certified coffee, higher prices due to increased cost of production, and most worrisome, an even further tightening of the supply of top quality coffee.

What does this mean for the small and medium sized roaster?

Now more than ever, roasters should put a premium on great cupping coffees which are available on the SPOT. At this time of year a buyer may feel spoilt for choice; however, in truth the availability of truly great coffees is exceedingly limited. When you find a coffee that you love and that works for your business, pull the trigger. It is also crucial to maintain flexibility in your offerings and have the ability to switch out coffees as needed in case supply disruptions do occur. Having some coffee booked forward, if you are in a financial position to do so, is certainly something to consider as well. In the face of the market rally last year, many roasters went into survival mode. As prices have come off in the first half of 2012, a palpable relaxation has taken place across the industry. Now is the time for everyone to get their ducks in a row, because it is only a matter of time before the next wave hits. It remains to be seen whether this comes in the form of a "C" market rally, differentials going up, or simply a lack of great coffee available for purchase. As we all know, the wolf is never far from the door.

Max Nicholas-Fulmer