Annual report on Nicaraguan Coffee 2017
Preface
Nicaragua's coffee production was estimated at a record 2.3 million bags in 2016 and 2017, up 7 per cent from the previous year. The rainy season is responsible for the increase in production, causing coffee trees to blossom earlier and begin to bear fruit. For 2017 / 2018, assuming good weather conditions, the forecast for the coffee sector will be very close to this year's production. Coffee is the most important crop in Nicaragua due to a series of economic, social and environmental impacts. In 2015 / 2016, its export volume reached 1.9 million bags, and the export volume reached 400 million US dollars.
Abstract
The coffee industry employs about 332000 people, equivalent to 15 per cent of the labour market and 54 per cent of the agricultural sector. Coffee plantations are also conducive to the protection of the natural environment because of the diversified growth characteristics of medium and large trees, the soil is further protected and can help retain soil moisture during the rainy season. According to the Nicaraguan Ministry of Agriculture, there are about 44000 coffee producers in Nicaragua, of which about 97 per cent are small (farms range from less than 1 hectare to 14 hectares) and the rest are considered medium (14 to 30 hectares). Most of Nicaragua produces Arabica coffee beans, concentrated in the northern and central regions of countries such as the city of Jintoga, Matagalba and Nova Segovia. There is also small-scale production of Robusta in the southern part of the southern Caribbean coast (RACS). At present, Robusta produces nearly 30000 bags (less than 2 per cent of total production), all of which are circulated in the domestic market.
Production
Nicaragua's coffee production was estimated at a record 2.3 million bags in 2016 and 2017, up 7 per cent from the previous year. The rainy season is responsible for the increase in production, causing coffee trees to blossom earlier and begin to bear fruit. In 2012, during the coffee rust outbreak in 2012, through different coffee associations in Nicaragua, some farmers decided to transplant adult coffee trees, planting more than 2000 hectares. The cultivation of the Robusta variety is also becoming more and more popular in Nicaragua, even if it accounts for less than 2% of total production. In 2016 and 2017, Robusta is expected to produce more than 30, 000 bags with a total area of 2100 hectares, of which 935 hectares will be harvested. In December 2016, the Government of Nicaragua issued a ministerial decree permitting the planting of Robusta in some areas along the Pacific coast, the Atlantic coast being the only area that approved the planting of Robusta. The private sector sees this as an opportunity to expand the Robusta plantation. Their long-term plan is to build a 7000-hectare Robusta plantation with an annual output of 500000 bags. Some farmers believe that the main problem affecting the industry in 2016 and 2017 is the lack of labor, especially in December and early January, which caused logging losses on some farms to reach 15%. For 2017 and 2018, assuming good weather conditions, the forecast for the coffee sector is bound to be very close to this year's production.
Crop area
According to the Nicaraguan Ministry of Agriculture, Nicaragua has a total planting area of nearly 1.26 million hectares, 95 per cent of which is in the harvest period. Most of Nicaragua's production is Arabica. Relatively speaking, Robusta's cultivation (about 2100 hectares) is also limited in the domestic market. The common variety Caturra accounted for 72% of Borbons, Maragogype and Pacamara accounted for 28%. Coffee is mainly produced in the northern and central regions of Nicaragua. According to the 2011 Nicaraguan agricultural census, 35 per cent of coffee plantations are located in Jintoga, 28 per cent in Matagalba, 24 per cent in Las Vegas and 13 per cent in other cities. The plantation in the central north is located in Segovia, Latvia, with elevations between 365m and 1500 m above sea level, and between 420m and 933m along the Pacific coast.
Output
Nicaragua has the lowest average yield in Central America, with an average yield of 11 bags per hectare. According to the local Foundation for Economic and Social Development (FUNIDES), the Nicaraguan coffee industry faces a series of negative problems, including the inability to obtain long-term credit to maintain coffee plantations (most of which are old), lack of good agricultural research and technical support, and frequent fluctuations in international prices in recent years. In 2013 and 2014, Nicaragua faced an outbreak of coffee rust, a fungal disease that affects the growth of coffee leaves, reducing coffee production by about 25%. In order to address this problem, the Government of Nicaragua, in coordination with the private sector, adopted a law (Law No. 853) in December 2013 to establish a fund to transform the Nicaraguan coffee industry, to finance the renovation and maintenance of coffee plantations in the coming years. One of the long-term goals of the Nicaraguan coffee sector is to double coffee production over the next decade by renovating old coffee plantations.
Input
Nicaragua has a wide range of suppliers of agricultural inputs due to low international coffee prices, limited credit channels and relatively low spending by producers on chemical fertilizers.
Consumption
Although Nicaragua has a long history of coffee production, its consumption is not as high as that of other countries in the region. On 27 March 2006, MaussieK ü hl, Co-Chairman of the Selva Negra Estate Coffee Farm, stated: "Nicaraguans have a culture of producing coffee, but they do not have a culture of consuming coffee". According to the report, the per capita coffee consumption in recent years is only close to 2 kilograms. In addition to the low cultural preference for coffee, Nicaraguan consumers do not buy more expensive types of coffee.
Trade
In 2015, coffee exports exceeded 1913292 bags, an increase of 8 per cent over the previous year. Trade data Coffee exports peaked in April and May of that year, according to historical statistics for the coffee year (October to September).
20152016 Coffee Exporting countries:
Country
Quantity (bag)
America
1107319
Canada
135259
Belgium
118992
Germany
94613
Italy
57825
Japan
56325
Costa Rica
43184
Taiwan
36574
The United Kingdom
35631
Sweden
30615
Australia
29353
Finland
28347
France
17060
Other regions
122195
Total
1913292
Policy
Nicaragua has two main regulations to regulate coffee production. The Coffee Lafa or Coffee Act, published in December 2000, provides a series of financial relief for investment in coffee production, and the Nicaraguan Coffee Commission (CONACAFE) is responsible for implementing this law. The second law, the Reform and Development of Coffee growth Act (Law No. 853), was adopted in December 2013, which aims to obtain the funds needed to renovate old coffee plantations through the creation of the Nicaraguan coffee sector.
According to international coffee prices, the fees charged from farmers for each export trade range from US $1.00 to US $4.00. When the price of coffee is close to $140.00, farmers pay $2.00. when the price is $140,165, farmers pay $3.00. when the price is $165to $185, farmers pay $4.00. when the price is higher than $185.00, farmers pay $1.00. The National Coffee sector Transformation and Development Commission (CONATRADEC), composed of the Nicaraguan Government, coffee producers and exporters, manages the fund.
Robusta: in August 2013, the Government of Nicaragua issued a ministerial decree (012-2013) authorizing the cultivation of robusta coffee beans in the region, given that there is no production of Arabica coffee beans on the Caribbean coast. However, in December 2016, the Government of Nigeria adopted a new ministerial decree (187-2016) to expand the approved areas to six new regions along the Pacific coast. The main standard is that the Robusta plantation needs to be established at least 30 kilometres from the Arabica plantation and must not be planted at an altitude of 400 metres. The private sector expects production to increase by 30 per cent in 2017 / 2018, reaching more than 7000 hectares within a decade, with a total output of 500000 bags.
Production, supply and demand data statistics:
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