When reporting prices paid for individual coffee lots, we have kept the price paid to the producer in the local currency and according to the local unit of measurement for delivery, in this case the quintal which is 55.2kg of parchment.
The reason we have not converted this price to USD for each lot is because we risk misrepresenting the price paid to the individual producer.
As simple as it may seem, it is very difficult to track the exact day the farmer was paid. Some farmers receive part of their payment early in the harvest as pre-financing. Some farmers may receive a payment the day they deliver parchment, and another payment when the coffee has been cupped. Some farmers may have to wait until the coffee is cupped, and sold to an international buyer, before they receive their second payment. Some farmers may have delivered multiple times throughout the season. You can see how this gets complicated pretty quickly.
Regardless of the day they were paid, or the exchange rate on that day, the local value of that payment remains the same in the short period of time we are sourcing and buying coffees. That is to say, 700 PEN buys more or less the same amount of food in September as it does in November, regardless of its value compared to the USD.
We are aware that for your own reporting you might need to convert this price to USD per kilogram or pound, equivalent to green coffee, so you can compare the price paid to the farmer to the FOB. So here are some instructions on how to do that.
As an example, here is a breakdown for lot PE-2019-040, La Higuera #2 by Segundo Mondragon, using the average exchange rate for October 2019, which was the month we were making our selections.
