Coffee in Central America: Different Realities

While producers in El Salvador predict that the local crop could be extinct in the next two years because of falling international prices, other countries in the region place grain at more favorable prices.

Wednesday, May 29, 2019

Each country's realities are different, as there are several differences that are reflected in the amounts exported and in the average prices at which the grain sells abroad.

According to the "Crop Monitoring" prepared by CentralAmericaData, during 2018 Honduras was the country leading Central American exports with $1.174 million, followed by Nicaragua with $366 million, Guatemala with $641 million, Costa Rica with $304 million, El Salvador with $115 million, and Panama with $10 million.

See "Crops: Main Figures in Central America"

Regarding the prices that were traded in 2018, the information platform states that on average the kg of coffee sold from Panama was the most expensive, reaching $5.23 per kilo, followed by that exported from Costa Rica at $4.10 per kilo, and the grain produced in Guatemala and El Salvador was sold $3.23 per kilo.

Last year the price of Nicaraguan coffee sold an average of $3.09 per kilo, and the grain exported from Honduras was traded at $2.74 per kilo.

Omar Flores, president of the Coffee Association of El Salvador (ACAFESAL), explained to that "... the functioning of the market is not fair for producers because the reference price, Contract C of New York, is established according to the interactions of investors 'the only thing that matters to them is that their money produces more.

The situation reported in El Salvador is drastic. reports that according to businessmen "... The cost of production of a quintal is estimated at $150, which includes paying for transforming coffee from grape to exportable gold, harvesting, agricultural management and taxes. However, between $35 and $40 per quintal are obtained after handing over to the mill, which transforms the coffee, the cost of this process can be around $60 per quintal, but it varies according to the mill or the cooperative. However, according to the union, 92% of the producers are in this situation because they depend on the price of the bag and do not sell specialty coffees."

In this context, businessmen predict that the crop could reach "extinction" in El Salvador in the next two years, if prices remain below $100 per quintal.

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