Coffee production in Honduras during the 2008/2009 growing season will decline to 3.5 million (60-kg) bags, a 7 percent decrease from the previous year, a US Agriculture Department attache in Tegucigalpa said on Friday.
Honduras, the second biggest coffee producer in Central America, produced an estimated 3.8 million bags in 2007/08. Production will decline in 2008/09 "due to the off-year of the biennial cycle." Total exports in 2008/2009 are forecast at 3.3 million bags, down from 3.7 million bags in the prior year. The crop year begins in October.
Attache reports are not official USDA data. To read the full documents, please go to: http://www.fas.usda.gov/scriptsw/attacherep/attache_lout.asp "Production IHCAFE data indicate that the 2008/2009 harvest is expected to reach 3.5 million 60 kg bags, a 7 percent decrease from the previous year.
The decrease is due to the off-year of the biennial cycle. Production for the 2007/2008 harvest is forecast at 3.7 million bags. The success of the 2006/2007 harvest was due to the work that IHCAFE and the coffee producer organizations did on increasing production through the renewal of plantations, the provision of fertilizers, and through the implementation of a national integrated pest management program.
Through a trust fund, IHCAFE bought fertilizers and sold them at a discount and on credit, with payment not due for one year. Coffee producers did not expand the area planted.
Instead, they invested in their plantations. The application of the fertilizer, the provision of new seeds, the improvement of planting density, soil conservation and the incentive of higher coffee prices have motivated producers to pay better attention to their farms and to increase productivity. Production of value-added coffee is also increasing.
About 230,000 60 kg bags were produced under programs managed by Utz Kapeh Certified, Rain Forest Alliance, Fair Coffee and Organic Coffee. During 2006/2007, exports of specialty and certified coffee increased 189 percent from the previous year. Consumption According to IHCAFE, about 7 percent of the production remains in the country. Domestic consumption generally increases about 3 percent annually.
However, in 2008/2009 it is forecast to increase by 4 percent due to the proliferation of coffee bars. The coffee bars are located in shopping malls, supermarkets, hospitals and main business streets.
This trend should continue growing since Honduran youth are consuming more coffee. In addition, these coffee bars specialize in providing customers with free wireless internet service, which attracts high school, university students, and others. Trade Coffee exports for 2007/2008 are estimated at 3.7 million 60 kg. bags. Exports in 2008/2009 are forecast at 3.2 million 60 kg. bags due to the off-year of the biennial cycle. Exports during the 2006/2007 harvest reached US $470 million, which is 17 percent higher than those from the 2005/2006 harvest.
Exports to Germany, the US, Belgium, Holland, Italy, South Korea, Spain, Sweden and France represented 86 percent of total shipments. The greatest volume (31 percent) was exported to Germany, and the US was the number two destination accounting for 21 percent of total exports.
The average export price in the 2006/2007 harvest was US $112 compared to US $105 for 2005/2006. According to latest data from the Honduran Central Bank, imports of roasted and soluble coffee for domestic consumption came mainly from the United States. During 2007, there was an increase of 28 percent in volume and a decrease of 16 percent in value compared to 2006.
In 2007, imports totaled 624,710 kg. valued at US $1,14 million. Other coffee exporters to Honduras are Mexico, Guatemala, and Nicaragua to a lesser degree. Post expects that competition to US-supplied coffee will be greater as Central American companies sell their soluble coffee in machines located at commercial centers and office buildings.
For the fourth year running, IHCAFE organized the "Cup of Excellence" competition. This promotional event brings together the best Honduran coffees, which are sold worldwide via electronic auction. Through this competition, Honduras finds niche markets for its coffee. In 2006/2007, a coffee producer sold its coffee for a record price of US $1,870 per 100 pounds.
About 230,000 60 kg. bags were produced under the programs of Utz Kapeh Certified, Rain Forest Alliance, Fair Coffee and Organic Coffee. During 2006/2007, exports of specialty and certified coffee increased 189% from those of 2005/2006.
The flow of unregistered coffee going to Guatemala and El Salvador is estimated at 50,000 and 35,000 bags, respectively. This unregistered flow is stimulated by the need of some growers to receive cash rapidly for their unprocessed product.
Intermediaries help in the commercialization by taking the harvest out to the road. Some intermediaries live in the same area of production and provide funds to the producers for personal expenses or for basic needs such as food. Another reason for the illegal trade is the captive market that the exporters have, since according to law, they are the only ones that can export.
Additionally, in Guatemala there is a higher capacity to negotiate futures markets. In Honduras, neither the producer nor the exporter has developed the means for futures trading. Subsequently, the only way to expedite a sale is through intermediaries.
Guatemalan buyers can afford to pay higher prices for quality Honduran coffee. Then they mix it with Guatemalan beans, since Guatemalan coffee is often sold at a premium in the international market, while Honduran coffee is typically sold at a discount."
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