Honduras coffee exports decrease! Foreign exchange earnings decreased by $100 million

Honduras is the largest producer and exporter of washed Arabica coffee in Central America, but recently, the chairman of the Honduran National Coffee Council said that the Honduran coffee industry is currently in trouble, mainly in terms of coffee production and exports.

Due to low coffee exports, foreign exchange earnings fell by nearly US$100 million in the first four months of this year. If this trend continues, foreign exchange earnings this year are forecast to fall by about US$300 million. According to statistics, coffee planting revenue in 2022/23 will be US$1.45 billion, but coffee planting revenue in 2023/24 will be approximately US$1.05 billion to US$1.1 billion, a decrease of 27% in comparison.

The decline in coffee exports is mainly due to the decrease in coffee production. Earlier, the U.S. Department of Agriculture released a report on Honduras 'coffee industry, which pointed out that due to weather changes, high incidence of coffee leaf rust and continued labor shortages, Honduras' coffee production in 2023/24 is expected to fall by 24% to 5.5 million bags.

In terms of weather, due to the influence of El Niño, Honduras 'temperatures hit a new high. It experienced the hottest and driest year since 1992, with the highest temperature reaching 38-40℃. In June, Honduras entered the rainy season, but there were heavy rains and disasters.

According to the National Risk and Emergency Management Secretariat of Honduras, floods and mudslides caused by heavy rains have led to road damage and river flooding. Emergency action is needed to deal with floods and mudslides caused by heavy rains.

In addition, it has been previously reported that a threshold of 5-20% for brown leaf rust indicates a moderate incidence, while the average incidence of leaf rust in several coffee-producing areas in Honduras is 5.8%. However, coffee rust spores will be spread through rain and wind, which may further increase the incidence and ultimately continue to affect the yield of the new season.

In addition, due to the resumption of coffee production in Brazil, international prices in Arabica have begun to decline. For Honduras, falling prices and the high competitiveness of other coffee-producing countries have always threatened the Honduran coffee industry.

However, according to the ICO report, coffee exports from many coffee-producing countries in Central America have declined since the beginning of this year. In May, coffee exports fell by 12.6% to 1.66 million bags. Some industry insiders believe that this is mainly because it is currently in the off-season and local farmers intend to keep stocks, hoping to sell coffee until the price of coffee rises further, which will have a negative impact on exports.

To this end, the chairman of the National Coffee Council of Honduras warned of the need to review variables that affect producer income. If urgent measures are not taken to increase coffee production, harvests will continue to decline, affecting producers and the country as a whole. It also called on the government, coffee institutions and producers to perform their respective duties and work together to respond to the crisis.