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USDA: Guatemala

USDA Attache: Guatemala 2018-2019 Coffee Crop Pegged at 3.3 Million Bags

CoffeeNetwork (New York) – According to the latest USDA Attache report, coffee production for Marketing Year (MY) 2019 (Oct. 2018-Sept. 2019) is forecast at 3.3 million 60- kilogram bags. Coffee production in Guatemala decreased six percent from MY2017 to MY2018. Exports for MY2018 are stable at 3.1million bags. Planted area is revised up 9 percent, from 277,000 Ha to 305,000 Ha. Coffee producers are struggling, as depressed prices do not cover costs, especially for small farmers. The United States, Japan, and Canada continue to be the top export markets.

Guatemalan coffee production is slowly recovering from the rust outbreak of 2012, and planted area is revised up 9 percent as new rust tolerant varieties are planted. Production for MY2017 closed at 3.3 million bags, down six percent from the previous estimate. MY2018 coffee production is estimated at 3.3 million bags, down two percent from the previous forecast and is forecast to maintain stable in MY2019. Farmers are struggling to remain in the market due to low prices. Guatemala is forecast to export 3.1 million bags in MY2019, the same as this year’s estimate. Estimates for exports in MY2018 are unchanged at 3.1 million bags. The United States, Japan, and Canada continue to be the top export markets.

Production

Coffee production for MY2019 is forecast at 3.3 million bags. MY2018 coffee production is estimated at 3.3 million bags, down two percent from the previous estimate, due to reduced moisture of the coffee bean resulting from higher temperatures at the drying patios and warehouses.

Production for MY2017 closed at 3.3 million bags, down six percent from the previous estimate, due to a drought during the harvest season. Guatemalan coffee production is recovering from the rust epidemic of 2012, when 20 percent of the coffee production was lost to the disease, but the recovery and growth of the sector has been slow. In MY2017, the area planted increased after 5 years of decreases, and is revised 9 percent up to 305,000 hectares. This is mainly due to new areas being planted with more rust tolerant plants.

Coffee production represents two percent of GDP (down from a high of 5 percent), with 300,000 families depending on coffee as a livelihood (down from 600,000 in year 2000). Coffee is the major economic catalyst for economic growth in rural areas, as 20 out of the 22 departments produce coffee. Coffee rust is not the only culprit for Guatemala’s lack of competitiveness in coffee: low international prices, a relatively strong quetzal compared to the dollar, and salary minimum wage that is high for the region are important variables affecting coffee production prices. The small farmers represent 97 percent of the producers and 47 percent of the total coffee production. The medium farmers produce 31 percent of the total production and the big farmers produce 22 percent, representing both 3 percent of the total coffee producers in Guatemala.

Consumption:

Consumption of local coffee represents 13 percent of the country’s production. Roughly 70 percent of the consumption is roasted ground coffee and 30 percent is soluble. Most soluble coffee is imported from Mexico. Imports represent around 5 percent of the total distribution. Consumption for MY2019 is forecast at 440,000 bags. Consumption for MY2018 is estimated at 440,000 bags, 8 percent down from the previous USDA estimate, per updated calculations from the industry. Annual consumption in Guatemala is estimated at 1.6 Kg per capita, second highest in Central America.

Trade:

Guatemala is forecast to export 3.1 million bags in MY2019, the same as previous year. Exports for MY2018 are estimated unchanged at 3.1 million bags. Table 2 shows exports for MY2017, up 1.2 percent from MY2016.

Stocks:

Ending stocks are forecast at 40,000 bags for MY2019. Stocks are estimated to slightly increase for MY2018. Stocks correspond to inventories on September 30, at private exporting facilities.

Alexis Rubinstein