Coffee Production, Consumption and Trade

An Expert's View about Food , Beverages and Tobacco in Costa Rica

Last updated: 23 May 2011

According to industry sources, Costa Rica’s coffee production has declined by about 37 percent since the 2000/2001 crop year. The sharp decline is attributed to the age of the plantations.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 5/15/2011 GAIN Report Number: Costa Rica Coffee Annual Coffee Production, Consumption and Trade Approved By: Kelly Stange, Agricultural Attaché Prepared By: Victor Gonzalez, Agricultural Specialist Report Highlights: Even with an 8.7 percent increase in production imports are needed to meet local demand. Executive Summary: According to industry sources, Costa Rica?s coffee production has declined by about 37 percent since the 2000/2001 crop year. The sharp decline is attributed to the age of the plantations. According to the Costa Rican Coffee Institute (ICAFE), 40% of the plantations are over 20 years old and need renovation. The replanting process under the best scenario would take several years to show results. Therefore, we expect coffee production to remain at comparatively depressed levels at least in the short to medium term. ICAFE?s replanting program is underway but it has faced obstacles including the fact that producers are reluctant to start replanting their farms during a period of high coffee prices. Commodities: Coffee, Green Production: Coffee production increased 8.7 percent to 1,573,492 60 kg bags in 2010/2011 (Note: for the purpose of this report bags refers to 60 kg bags) from 1,477,322 bags in 2009/2010. Although lower production was previously expected, improved fertilization may have resulted in higher production. Also, higher production was achieved in spite of the very wet and humid conditions experienced during 2010, which caused a much higher incidence of fungal diseases as well as direct damage in certain production areas. The 2011/2012 crop is forecast to increase to 1,640,000 bags or about 4.2 percent. Higher production is expected at this point based on normal flowering and rainfall volume during the initial period of the production process. Also, some sources indicate that as a result of the higher prices received by producers, they are investing profits in better fertilization which may result in higher production. Coffee production continues to face competition for land area, primarily from urbanization. Also, even though there are no academic or formal studies on this issue, it is believed that the sector faces a generational period of change, where many producers are becoming older and the new generations are not interested in remaining in the coffee business. Consumption: Coffee consumption numbers have been revised upwards to reflect the fact that Costa Rica has been importing green coffee to be used in local consumption. Coffee roasters have complained recently about a shortage of local coffee in the market. Given the high international prices and the high quality of the Costa Rican coffee, most of the local coffee is being exported, according to roasters. They argue that real local consumption ranges from 340,000 to 360,000 bags. To respond to the perceived lack of coffee for domestic consumption, roasters imported green coffee in 2009/2010 and have continued to do so during this marketing year. Roasters are importing lower cost coffee mostly from El Salvador and Guatemala. Trade: Costa Rica exported 1,142,849 bags of coffee in 2009/2010 (13.3% less than in the previous marketing year). Most of the coffee was exported to the United States (55.8%), Belgium (10.1%), and Germany (5.5%). Coffee exports to the United States as a percentage of total exports have grown significantly in the past decade from 29.8 percent of the total in 1999/2000 to 55.8 percent in 2009/2010. Export volume has declined sharply during the last 10 years. During 1999/2000 Costa Rica exported 2,208,184 bags, as compared to 1,142,849 bags in 2009/2010. Also, export patterns have changed. Costa Rica used to export a higher share to Europe and Japan in the past. Although coffee has declined to third place in terms of the export value of agricultural products, it is still an important producer of foreign exchange. Coffee exports amounted to $232.0 million in 2009 and $259.0 million in 2010. Bananas and pineapples now surpass coffee in terms of export value. According to preliminary data from ICAFE, the average FOB export price for the 2009/2010 coffee crop was $204.01 as compared to $187.34 per bag for the 2008/2009 crop. The average export price has improved since the 2001/2002 crop year. However, the Costa Rican currency, the colon, appreciated about 13 percent against the U.S. dollar during 2010 and as a result, producers did not enjoy the full benefit of the price increase. Green coffee imports amounted to 129,565 bags during 2009/2010 and so far during the 2010/2011 marketing year, 86,230 bags have been imported through May 3, 2011. It is difficult to determine if all this coffee is destined for local consumption or for re-export, although according to roasters (see consumption) the imported coffee is required to meet domestic consumption needs. Production, Supply and Demand Data Statistics: Table 1: Production, Supply and Demand Table, Coffee, Green Coffee, Green C 2009/2010 2010/2011 2011/2012 osta Rica Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: 2009 2010 Oct 2011 USDA New USDA New USDA New Official Post Official Post Official P ost Area Planted 98 98 98 98 98 (1000 HA) Area Harvested 93 93 93 93 93 (1000 HA) Bearing Trees 384 384 384 384 384 (MILLION TREES) Non-Bearing Trees 46 46 46 46 46 (MILLION TREES) Total Tree Population 430 430 430 430 430 (MILLION TREES) Beginning Stocks 25 25 109 145 103 (1000 60 KG BAGS) Arabica Production 1,456 1,477 1,500 1,573 1,640 (1000 60 KG BAGS) Robusta Production 0 0 0 0 0 (1000 60 KG BAGS) Other Production 0 0 0 0 0 (1000 60 KG BAGS) Total Production 1,456 1,477 1,500 1,573 1,640 (1000 60 KG BAGS) Bean Imports 103 130 50 90 80 (1000 60 KG BAGS) Roast & Ground Imports 0 0 0 0 0 (1000 60 KG BAGS) Soluble Imports 0 0 0 0 0 (1000 60 KG BAGS) Total Imports 103 130 50 90 80 (1000 60 KG BAGS) Total Supply 1,584 1,632 1,659 1,808 1,823 (1000 60 KG BAGS) Bean Exports 1,170 1,142 1,270 1,350 1,390 (1000 60 KG BAGS) Rst-Grnd Exp. 0 0 0 0 0 (1000 60 KG BAGS) Soluble Exports 0 0 0 0 0 (1000 60 KG BAGS) Total Exports 1,170 1,142 1,270 1,350 1,390 (1000 60 KG BAGS) Rst,Ground Dom. Consum 300 340 300 350 360 (1000 60 KG BAGS) Soluble Dom. Cons. 5 5 5 5 5 (1000 60 KG BAGS) Domestic Use 305 345 305 355 365 (1000 60 KG BAGS) Ending Stocks 109 145 84 103 68 (1000 60 KG BAGS) Total Distribution 1,584 1,632 1,659 1,808 1,823 (1000 60 KG BAGS) Exportable Production 1,151 1,132 1,195 1,218 1,275 (1000 60 KG BAGS) Table 2: Export Trade Matrix, Coffee, Green Costa Rica Coffee, Green 60 kg bags Time Period 2009/2010 Exports for: U.S. 637,427 Others Belgium 115,487 Germany 62,415 Italy 59,047 Japan 51,803 Netherlands 42,009 Canada 28,199 Total for Others 358,960 Others not Listed 146,462 Grand Total 1,142,849
Posted: 23 May 2011, last updated 23 May 2011

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