Very good harvests in Vietnam and Brazil, and a drop in European demand are the factors affecting prices, which continue to decline.
Added to a persistent decline in the international prices, is the extensive affect on Central American harvests of the "Roya" blight, that is affecting an estimated 80% of plantations. The effects of the pest will be felt not only in the present harvest, but in the next.
When there aren’t sufficient assets to use as collateral for bank financing, producers are registering their crops in the "Registro de Garantías Mobiliarias" (Movable Collateral Registry - RGM).
Prensalibre.com reports that "Of the 400 entries of movable items from January to November in the RGM, at the Ministry of Economy (Mineco), more than 150 correspond to crops of gold and pergamine coffee.”'
The price of a quintal has fallen below $200 due to a Brazilian "superharvest", with industry leaders recommending caution.
On Tuesday March 6th a quintal of coffee traded at $192.95 on the New York Stock Exchange, down 4.24%, lower again than at the beginning of the week when it was recorded at $201.5.
A report by the National Coffee Association (Anacafe) of Guatemala said, "This fall began in London, due to liquidation by speculators and domestic sales."
The price of a quintal of coffee reached the highest level in the last 30 years on the Intercontinental Exchange in NY.
Coffee prices, since surpassing the $200 barrier on 20 October 2010, have continued to climb, trading on 28 April at $305 per quintal, said Gerardo de Leon, Manager of Marketing of the Federation of Coffee Cooperatives of Guatemala (Fedecocagua).
According Anacafé, international grain buyers are delaying their purchases, waiting for prices to fall.
The international price of coffee is at record levels above $ 210 per bag. Directors of the National Coffee Association (Anacafe) explained that international buyers are expecting prices to fall and added that producers are finding it difficult to sell the product at these prices in the global market.
A number of coffee associations have reacted to the sector’s losses by requesting the activation of a $71 million Coffee Trust.
The National Coffee Association (Anacafé) agrees with the Federation of Coffee Cooperatives (Fedecocagua) that this is the optimal time for the government to activate this trust, after the eruption of Pacaya Volcano and Agatha tropical storm damaged plantations.
The decision by Starbucks to close 600 of its stores will not affect its purchases of Guatemalan coffee, said William Hempstead, director of the National Coffee Association (Anacafé).
Guatemala sells some 25 percent of its coffee to Starbucks, which is also supplied by Costa Rica.