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USDA: Ecuador

USDA Attache: Ecuador's 2018/19 Coffee Crop Seen 24.4% Up

Belfast (CoffeeNetwork) The latest USDA attache report for Ecuador states that during market year (MY) 2017/18 (April/March), Ecuador's domestic bean production increased due to better than expected results in the recovery of old plantations and the addition of new cultivars. Production will increase further in MY 2018/19 to 255,000 bags, which would be 24.4% up on the 205,000 bags in 2017/18. The 2017/18 crop had previously been projected at 195,000 bags.

Executive Summary:

Ecuador’s coffee production in marketing year (MY) 2018/19 (April/March) is forecast at 255,000 bags (60-kilograms per bag) on a Green Bean Equivalent (GBE) basis, up 50,000 bags from the MY 2017/18 estimate. FAS Quito is revising upward its MY 2017/18 coffee production estimate to 205,000 bags, reflecting a production increase of 21 percent compared to MY 2016/17 levels.

Production has increased due to better than expected results in the recovery of old plantations and the addition of new cultivars starting to bear fruit. This development is expected to expand through MY 2018/19.

Ecuador’s total domestic coffee consumption in MY 2018/19 is forecast at 217,000 bags GBE, up 5,000 bags or 2.4 percent higher than the MY 2017/18 (revised) estimate of 212,000 bags. Total domestic consumption is recovering from the slowdown in the Ecuadorian economy. FAS Quito understands that Ecuador maintains coffee stocks of about 100,000 to 200,000 bags GBE. The government does not manage or warehouse these stocks. Local soluble coffee manufacturers, and smaller bean exporters storing beans while reaching a shipment size, are the entities responsible for these coffee stocks.

Ecuador’s coffee exports in MY 2018/19 are forecast at 742,000 bags GBE, up 37,000 bags or 5 percent higher compared to the MY 2017/18 (revised) estimate of 705,000 bags. FAS Quito is revising upward its MY 2017/18 coffee export estimate to 131,000 bags GBE or 23 percent higher than MY 2016/17 levels. In MY 2017/18 Ecuador exported an estimated 132,000 bags of coffee (Arabica and Robusta) beans, 572,000 bags of soluble coffee (about 81 percent of total exports), and some 1,000 bags of roasted-ground coffee. Germany and Russia were Ecuador’s top two markets for its exports of coffee products in CY 2017.

Imports in MY 2018/19 are forecast at 714,000 bags, up 26,000 bags or 4 percent higher compared to the MY 2017/18 (revised) estimate of 688,000 bags. The relevance of Ecuador’s coffee sector remains tied to its soluble-coffee processing capabilities. Thus, it continues to import nearly as much coffee as it then converts it into soluble coffee to be delivered to foreign markets.

Crop Area:

Total area planted has remained constant at about 200,000 hectares. The area harvested—137,000 hectares in MY 2018/19—is forecast upward from the previous marketing year due to increasingly new and pruned plots coming into production. Most of the coffee-cultivated area is in the hands of smallholders who rely on family labor for maintaining the crops and harvesting. As the younger generations migrate to urban centers and rural labor costs continue to increase, with rising coffee prices and a growing appetite for specialty coffees in the world market, there has been an inflow of new entrants of varied sizes. Intercropping and poly-culture are still common, occurring on at least 50 percent of total planted area.

Production:

Ecuador’s coffee production in marketing year (MY) 2018/19 (April/March) is forecast at 255,000 bags (60-kilograms per bag) on a Green Bean Equivalent (GBE) basis, up 50,000 bags or 24 percent higher Coffee, Green from the MY 2017/18 (revised) estimate. FAS Quito is revising upward its MY 2017/18 coffee production estimate to 205,000 bags due to a better than expected results in the recovery of old plantations and the addition of new cultivars. The expectation was for production improvements becoming evident in MY 2017/18. Production had been suffering for many years due to a lack of investment in rejuvenating plantations and new cultivars. Often, current cultivars are in need of complete renewals. At the beginning of CY 2018, farmers reported low presence of pests and diseases and favorable weather conditions.

Prices:

Farmers in calendar year (CY) 2017 were paid on average $289 per 60-kg bag of Arabica coffee, $46 or 19 percent more than in 2016. Robusta coffee prices averaged $91.66 per 60-kg bag in 2017. Farmers benefited from better prices in CY 2017 mainly due to increases in quality.

Full report can be viewed at
https://gain.fas.usda.gov/Recent%20GAIN%20Publications/Coffee%20Annual_Quito_Ecuador_5-8-2018.pdf

Andrea Thompson