Coffee Value Chain Cost Logistic Analysis in Chanchamayo Peru

Abstract

Coffee is one of the three most consumed drinks and one of the most traded products globally. In 2019, it represented 9% of the total agricultural exports of Peru, ranking fourth with US$ 637 million. In addition, the coffee sector has been an essential source of income for more than 200 thousand Peruvian families, 34% of which have been in a situation of poverty or extreme poverty, aggravated by the COVID-19 pandemic. Unfortunately, during the last years, the coffee industry in Peru has faced a severe crisis due to low international prices, the low productivity per hectare intensified by the plague in the 2014–2015 period, and the high logistic costs within its value chain. In general terms, the Peruvian logistics performance is very deficient and directly impacts the profitability of the coffee sector; for this reason, this research presents the more relevant components of logistics cost. This research identified the shipping from the farms to the storage facilities and then to the processing plants in Lima, and the post-harvesting treatment generates more than 88.68% of the total cost. Afterwards, we proposed scenarios to minimize the overall logistic costs. As a result, 2.10%, 2.71%, and 3.94% of improvement were obtained, impacting their profitability and the sector’s survival. The results show a logistics costs reduction from 25.24% to 15.76%.