Tropical fruits and coffee are two of the products with opportunities in a market with great potential for growth, but challenging at the same time for Central American entrepreneurs.
Former Costa Rican ambassador to China, Marco Vinicio Ruiz, shared his experience with a group of Panamanian entrepreneurs in a forum organized by the National Council of Private Enterprise.
The European country is a mature market in the production, marketing and consumption of coffee, and despite its developed roasting industry, it is a major importer of roasted coffee.
From the market study "Roasted coffee in Germany" by Procomer:
The traditional commercial dynamic of coffee in Europe is to import fresh produce from Latin America and roast it in the markets with a developed roasting industry such as Holland, Italy, and Germany, among others.For this reason Latin American roasted coffee has a minimal share, representing in Germany for example, 0.1% of their imports.
Exports in the first eleven months of the 2016/17 harvest totaled $17.6 million, 53% more than anything sold to the Asian country in the 2015/16 cycle.
One of the main benefits of exporting grain to Japan is that the average price paid for coffee is higher than the amount paid in other markets.According to figures from the Center for Exports, "...
In August, the international coffee price index recorded the highest value in the last four months, but rapidly declined again, in light of the high inventory reported by importing countries.
From the report "Monthly Coffee Market Report - August 2017":
Coffee prices climb to a 4‐month high but subsequently fall in view of a well‐supplied market
A study by the Smithsonian Institute predicts that by 2050 the areas suitable for coffee cultivation in Latin America will have been reduced by 73-88%.
From a report by the Smithsonian Institute:
Areas in Latin America suitable for growing coffee face predicted declines of 73-88 percent by 2050. However, diversity in bee species may save the day, even if many species in cool highland regions are lost as the climate warms.
In the first ten months of the 2016/17 harvest, coffee sales abroad totaled $423 million, 22% more than in the same period of the previous harvest.
The Center for Exports (Cetrex) also reported an 18% increase in volume in the period in question.As for the value exported between October last year and July of this year, the reported figure was $423 million, 21.6% more than in the same period of the 2015/16 cycle, when $348 million was exported.
In the last five years, the average price of coffee exported by countries in the region fell by 33%, going from $226 to $151.
Figures from the information system on thethe Coffee market in Central America, compiled by the Business Intelligence Unit atCentralAmericaData: [GRAFICA caption = "Click to interact with the graph"]
The ICO composite indicator price rose above 130 US cents/lb for the first time since April as reports emerged from Brazil about lower yields and quality issues related to the 2017/18 crop.
From the monthly report by the International Coffee Organization (ICO):
The ICO composite indicator price rose above 130 US cents/lb for the first time since April as reports emerged from Brazil about lower yields and quality issues related to the 2017/18 crop. Coffee exports have stabilized in the last two months but cumulative exports remain well above the levels reached in the previous year and leave consumer stocks well supplied. The production estimate for 2016/17 has been revised up to 153.9 million bags, which constitutes an all‐time record. The output of Arabica and Robusta is estimated to be 10.2% higher and 10.6% lower compared to coffee year 2015/16, respectively.
In June Arabica prices fell and then recovered, while robusta prices closed the month at higher levels.
From the Coffee Market Report June 2017, by the International Coffee Organization:
The coffee market was volatile with Arabica prices tumbling and subsequently recovering to previous levels while Robusta closed higher. Exports in June remained strong at 10.9 million bags, 8.8% higher than last year, leading to large inventories in importing countries. Hence, the coffee market is well supplied going into the critical month of July when frosts remain possible in Brazil.
Malaysia, India, the Dominican Republic, Israel, Georgia and Syria are the six countries that for the first time imported Nicaraguan coffee during the 2016/17 harvest.
At a value of almost $10 million, Nicaragua exported 65,000 hundredweight of coffee to these six countries during the 2016/17 harvest.Although only small amounts were sold in each of these markets, the grain exporters' association believes that the opening of new destinations for Nicaraguan coffee is positive.
Of the total exported by the Central American countries to Mexico in 2016, 24% corresponded to palm oil, totalling $187 million, equivalent to 393 thousand tons.
Figures from the CentralAmericaData's information system on Trade between Central America and Mexico compiled by the Business Intelligence Unit: [GRAPHIC caption = "Click to interact with the graph"]
International prices continued to decline in May, in the context of optimistic outlooks on global grain supply for the coming months.
From the Monthly Coffee Market Report, by the International Coffee Organization:
Coffee prices continued to fall as the market remains well supplied and inventories in consuming countries are high as a result of strong exports in the first seven months of the coffee year.
A sample of the grain from a farm in Jinotega obtained the highest price in the Coffee Cup of Excellence auction in Nicaragua.
Elnuevodiario.com.ni reports that "...This gourmet coffee is of the malacaturra variety and is being produced in the estate El Esfuerzo in Jinotega, owned by Ignacio Estrada Burgos.The same farm managed to place another lot of the same quality and category at a price of US $3,790 per hundredweight, a bid made from the wallet of Wataru for Shrub Coffee."