Honduras ranks first in Central America, third in Latin America, and seventh globally in coffee exports by volume.
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USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
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GAIN Report Number: HO - Café 1
Honduran 2012/2013 Coffee Exports Continue to Roast
Honduras ranks first in Central America, third in Latin America, and seventh globally in coffee exports
by volume. Honduran coffee production in marketing year 2012/2013 (October 2012 – September
2013) is forecast at 5 million 60-kilogram bags. Coffee exports for 2012/2013 are forecast at 4.4
million bags. The historical increase in production and sales stems from the high international price of
coffee, increased plantings, and good growing conditions. The Specialty Coffee Association of America
(SCAA) named Honduras as the Portrait Country at the April 2012 SCAA exposition.
Sixty-one percent of Honduran coffee production is grown in the mountains between 2,700 and 3,600
feet above sea level, 23 percent in areas from 3,600 to 4,800 feet above sea level, and 16 percent in
areas 1,500 to 2,700 feet above sea level. Coffee is grown in 16 of the 18 Honduran states and in 213
out of the 298 municipalities of Honduras. Honduras differs from other coffee-growing countries in the
region because of the prevalence of small producers. More than 85,000 small producers (each farmer
selling less than 77 bags) collectively grow more than 90 percent of all coffee produced in Honduras.
The coffee sector provides employment to 30 percent of the population and generates much needed
foreign exchange. Two million people directly participate in the coffee harvest. They are paid about
US$71 million, distributed nationwide over a period of four months. Besides picking the beans, there
are other activities such as fertilizer application, shade control, cleaning, drying, commercialization, and
transport which provide other employment.
The importance of coffee‟s influence on the national economy extends beyond just farm owners.
According to the Honduran Coffee Institute‟s (IHCAFE), approximately 1.2 million people are involved
in the coffee sector. There is a steady demand for roughly 700,000 on-farm employees annually. This
on-farm employment has an average of two workers per “manzana” (1 manzana equals about 0.7 of a
hectare; about 1.7 acres). Seasonal labor demand is 500,000 workers per year; mainly for the harvest
season. For the large producers, hired workers provide the labor, while small producers tend to rely
more on family members to plant, grow, and harvest coffee. According to the latest data from the
Central Bank of Honduras, coffee accounts for 40 percent of total agricultural exports and the
2010/2011 sales contributed to 27 percent of the country‟s agricultural gross domestic product.
According to IHCAFE, coffee production for the coming years is expected to increase and increase.
The 2012/2013 harvest is forecast at 5.0 million 60-kg bags up from the current harvest estimated at 4.6
million bags. These increases are expected through timely technical assistance, ease of obtaining inputs
and improved practices to increase yields, quality and production levels.
The forecast 2012/2013 export level is 4.4 million 60-kg bags. Exports in 2011/12 are estimated at 4.1
million bags. Exports in 2010/2011 were 3.9 million bags, twenty-two percent higher than the previous
year. Even though there has been a decrease in the international price of coffee, IHCAFE‟s expects
exports to increase since there has been an improvement in the production and quality of Honduran
The export value for the 2010/2011 harvest reached US$1,239 million. This was 105 percent higher
than the earnings from the 2009/2010 harvest. The average New York (Inter-Continental Exchange
ICE) price for the 2010/2011 harvest was US$248 per 46-kg bag compared to the average price of
US$149 in 2009/2010.
During 2010/2011 exports of specialty, certified, and organic coffee were more than 586,000 bags. This
is 15 percent of total coffee exports. For nine consecutive years Honduran producers have participated
in regional coffee quality competitions in the international “Cup of Excellence” auction. The Specialty
Coffee Association of America (SCAA) Board of Directors named Honduras as the "Portrait Country"
for the annual SCAA exposition held in Oregon on April 19, 2012.
IHCAFE estimates the 2012/2013 harvest will reach 5.0 million 60-kg bags.
Production for the 2011/2012 harvest is mow estimated at 4.6 million bags, twelve percent
higher than the 4.1 million bag estimate made previously.
Production for the 2010/2011 harvest was 4.0 million bags, twenty-three percent higher than the
The historical increase in production is due to Honduran producers being motivated by the high
international price of coffee. Producers used more inputs such as the application of the fertilizer, the
provision of new seeds, the improvement of planting density, and soil conservation techniques to
increase yields and production levels. In addition, higher prices motivated landholders in other crops or
professions to convert larger proportions of their land holdings to coffee production. An estimated
10,000 new coffee producers entered the market in 2010/2011 resulting in a total of about 101,000
coffee farm operators in the country. This is equivalent to a 10 percent increase in the number of coffee
Honduras differs from other coffee-growing countries in the region because of the prevalence of small
producers. More than 85,000 small producers (each selling less than 77 bags) – constitute more than 90
percent of all production in Honduras.
Because of the high prices, coffee producers have expanded and renewed the planted areas. However,
the number of bearing and non-bearing trees remains steady. IHCAFE maintains a trust fund to buy
fertilizer, sell it at a discount, and on credit terms with payment not due for one year. The trust fund
also provides financial assistance for maintenance and renewal of coffee farms. About 87,000 coffee
producers participate in this program.
Production of "value-added" coffee is also increasing. More than 586,000 bags of specialty, certified,
and organic coffee were produced in 2010/2011. This is a 26 percent increase in production from the
The production was under programs such as UTZ Kapeh Certified, Organic/Fair Trade, Rain Forest
Alliance, Fairtrade, Cafe Practices from Starbucks and others. The establishment of a National Coffee
Certification System is underway to guarantee specialty coffee to international markets, as well as a new
system of traceability for the six distinct coffee regions and their unique flavors; including
denomination of origin focusing on Café Marcala and Honduran Western Coffees.
According to data from IHCAFE, domestic consumption is generally ten percent of total production.
Consumption per capita in 2010 was 3.77 kg per person. This is a 56 percent increase from the previous
year (2.41 kg. per person). The increase in consumption can be tied to the growing presence of coffee
bars located in shopping malls, main business streets, supermarkets, and hospitals. A large percentage of
the Honduran population is young and these Hondurans are consuming more and different types of
coffee, e.g., "frozen" coffee drinks. Particularly, the coffee bars providing customers with free wireless
internet service are attracting lots of high school and university students as loyal (coffee-loving)
Coffee exports for 2012/2013 are forecast at 4.4 million 60-kg bags. Exports for 2011/2012 are
estimated at 4.1 million bags. IHCAFE‟s forecast is that the increase in volume exported will
compensate for the expected decrease in export price. Coffee exports were 3.9 million bags in
2010/2011. This volume exported was 22 percent higher than the 2009/2010 harvest.
IHCAFE estimates that even though the coffee prices are going down, there is still an incentive to the
producer since a price over US$150 per quintal (hundred pounds) is favorable. This price level will
continue to support an increase in exports. It should be noted that this data does not include coffee
exports that are not registered through official channels. Post estimates „informal‟ exports are about
260,000 bags that are exported to Guatemala and Nicaragua. The coffee sent to Guatemala is quality
coffee, while the coffee sent to Nicaragua is coffee of lower quality but obtains attractive prices
Exports to Germany, Belgium, the United States, Italy, France, South Korea, Japan, Holland, Sweden,
and Canada represented 88 percent of total shipments. The greatest volume (30 percent) was exported
to Germany, and the United States was the number three destination accounting for 16 percent of total
exports. Honduras exported coffee to 39 countries.
Export Trade Matrix
Commodity Coffee, Green
Time Period MY Units: 60 Kg Bags
Exports for: 2011 2012
U.S. 611,397 U.S. 654,534
Germany 1,159,727 1,242,000
Belgium 654,222 700,488
Italy 217,693 233,082
France 207,851 222,732
S, Korea 182,032 194,994
Japan 133,420 142,830
Holland 91,002 97,290
Sweden 86,269 92,322
Total for Others 2,732,216 2,925,738
Others not Listed 522,387 559,728
Grand Total 3,866,000 4,140,000
Export value for 2010/2011 reached US$1,239 million. This was 105 percent higher than the earnings
from the 2009/2010 harvest. This has been the highest income recorded in Honduran coffee exports.
According to the Honduran Central Bank‟s data coffee export earnings for 2010 represented 40 percent
of the total export revenues of agricultural products. The average export price in the 2010/2011 harvest
was US$248 per 46 kg bag compared to the average price of US$149 in 2009/2010.
According to data from the Honduran Central Bank, imports of roasted and soluble coffee for domestic
consumption came mainly from the United States. Other coffee exporters to Honduras are Mexico,
Guatemala and Nicaragua. Post expects that competition to U.S. supplied roasted and soluble coffee
will increase as Mexican and Central American companies sell their soluble coffee in machines located
at commercial centers and office buildings.
For the ninth year running, IHCAFE is organizing the "Cup of Excellence" competition. This
promotional event brings together the best Honduran coffees which are sold worldwide via electronic
auction. Through this competition, Honduras finds niche markets for its coffee. In 2010/2011 more
than 586,000 60 kg bags were produced under programs such as UTZ Kapeh Certified, Organic/Fair
Trade, Rain Forest Alliance, Fairtrade, Cafe Practices from Starbucks and others.
The Specialty Coffee Association of America (SCAA) Board of Directors named Honduras as the
"Portrait Country" for the annual SCAA exposition held in Oregon on April 19, 2012. For Honduras, the
initiative represented a united strategy supported by the government and inclusive of the private sector
and leading institutions to strengthen its coffee sector and trading ties with the United States.
Honduras, which has a growing reputation as a specialty coffee power player, earned a spot in the
SCAA Opening Ceremonies, where the country‟s President Lobo gave a speech. The "Portrait Country"
status is sure to bring extra eyes to Honduras, as well as the recent quality improvement work done by
the nation‟s coffee institute, IHCAFE. As demand for high quality Arabic coffees continues to rise, the
commitment of Honduras represents an opportunity to build the supply chain for U.S. coffee roasters.
The flow of contraband coffee going to Guatemala and Nicaragua is estimated at 260,000 60 kg bags.
This unregistered flow is stimulated by the need of some growers to receive cash rapidly for their
unprocessed product. Intermediaries help in the commercialization by taking the harvest out to the
road. Some intermediaries live in the same area of production and provide funds to the producers for
personal expenses or for basic needs such as food.
Another reason for this unregistered trade is the existence of an alternate market. Honduran coffee
sellers obtain a higher price if they do not sell it in the formal market: If producers sell their coffee
through the formal market, according to law, they face a deduction of US$9.00 per quintal (100
pounds). However, the volume sold within the alternate market notably declined by roughly 60 percent
during the 2010/2011 harvest. The decrease was due, in part, to importers being more aware of the
quality coffee that it is being produced in Honduras which has increased demand within the formal
Stocks decreased during 2010/2011 from the estimated amount in light of the increase in exports.
Coffee beans stored by the roasters are only toasted upon request. Roasters keep the remaining beans
for domestic consumption. The coffee might also be sold to other Central American countries
throughout the year.
The Government of Honduras (GOH) privatized IHCAFE in 2000. The privatization was done in order
to rationalize the coffee sector. At that same time, the National Council of Coffee was created.
IHCAFE is the specialized institution in Honduras that works with all aspects of coffee production,
harvesting, and exporting. IHCAFE provides guidelines, extension services and implements projects to
increase production and to improve the quality of Honduran coffee. It also establishes
commercialization procedures and controls coffee production and exports. As part of those controls,
exporters must register with IHCAFE the coffee which they buy from growers and the coffee which
they export. Subsequently, IHCAFE issues exporters the export permits. The Board of Directors of
IHCAFE includes coffee growers, coffee roasters, exporters, and representatives from the Ministry of
Agriculture and the Ministry of Industry & Trade.
Due to the low international prices, during the years of the coffee crisis, the GOH obtained a loan for
US$20 million to be paid over 20 years. Through the loan, funds supported all coffee producers in
2002. Due to the high level of indebtedness of many growers, the GOH created the Law of Financial
Reactivation of the Coffee Sector in 2003. This law facilitated the creation of the coffee trust fund in
2004, which receives the financial contribution of coffee growers.
The grower's contribution is obtained through the deductions that the exporter or intermediary makes
when they buy the grower's coffee. One of the deductions is for US$9.00 per quintal (100 pounds).
This deduction is transferred to IHCAFE, which in turn transfers it to the trustee banks. This deduction
is returned to the producer in 60 days. The interest from the US$9.00 contribution is assigned to pay
off the US$20 million loan over the next 15 years.
The other mechanism to obtain funds is through an exporter deduction of US$3.25 per purchased
quintal. Out of the US$3.25, approximately US$0.50 is applied to the repayment of the US$20 million
loan, and the balance is distributed with 36 percent going to the operation of IHCAFE and 64 percent to
the Coffee Fund. The Coffee Fund uses those resources to build and fix roads in coffee production
areas, and to buy equipment for coffee producers.
To exemplify some of the benefits of the trust fund, IHCAFE used part of the trust fund to increase
productivity and to lessen the impact of fertilizer prices on coffee producers. IHCAFE bought fertilizer
used by producers and sold it to them at a lower-than-market price. The fertilizer was sold to coffee
producers for cash or on credit with payment due in a year. This program supports an increase in
production and also helps hold down the overall commercial price of fertilizer. The trust fund also
provides financial assistance to purchase equipment and seeds, as well as offers technical assistance
through education programs on crop diversification and irrigation methods.
In addition to its fertilization program, IHCAFE has implemented the following projects: Innovative
Coffee Producer, Coffee Regionalization, Coffee Rehabilitation, and Productive Diversification. The
programs being implemented are the Assistance to Small Coffee Producer, Land Title, Solar Dryers,
Agro Forestry and Community Forestry. IHCAFE has also created the Superior School of Coffee,
Centers of Research and Training, the National Center of Quality, the Coffee Quality Control
Laboratory and the School of Tasters.
Through these projects and programs, IHCAFE is introducing new ways to add value, to develop
specialty coffee, and to find niche markets. Coffee producers are provided technical assistance to
diversify their farm production by growing precious woods, and including food products such as
avocado, fruits, fish, poultry or bees.
Production, Supply and Demand Data Statistics:
Coffee, Green Honduras 2010/2011 2011/2012 2012/2013
Market Year Begin: Oct 2010 Market Year Begin: Oct 2011 Market Year Begin: Oct 2012
USDA Official New Post USDA Official New Post USDA Official New Post
Area Planted 0 266 0 285 308
Area Harvested 0 238 0 255 275
Bearing Trees 0 1,049 0 1,049 1,049
Non-Bearing Trees 0 141 0 141 141
Total Tree Population 0 1,190 0 1,190 1,190
Beginning Stocks 218 218 41 30 34
Arabica Production 3,900 3,975 4,100 4,600 4,983
Robusta Production 0 0 0 0 0
Other Production 0 0 0 0 0
Total Production 3,900 3,975 4,100 4,600 4,983
Bean Imports 0 0 0 0 0
Roast & Ground Imports 8 9 0 9 9
Soluble Imports 15 8 15 8 8
Total Imports 23 17 15 17 17
Total Supply 4,141 4,210 4,156 4,647 5,034
Bean Exports 3,900 3,866 3,925 4,140 4,447
Rst-Grnd Exp. 0 35 0 40 40
Soluble Exports 0 0 0 0 0
Total Exports 3,900 3,901 3,925 4,180 4,487
Rst,Ground Dom. Consum 200 270 200 423 490
Soluble Dom. Cons. 0 9 0 10 10
Domestic Use 200 279 200 433 500
Ending Stocks 41 30 31 34 47
Total Distribution 4,141 4,210 4,156 4,647 5,034
1000 HA, MILLION TREES, 1000 60 KG BAGS