Central America’s Producers Show Resilience and Fortitude

Central America’s coffee-producing countries are optimistic about their current crop production levels. Export volumes of green, roasted and soluble coffee should remain stable or even increase in the coming coffee year as the region benefits from a recent surge in global coffee prices.

The region’s biennial coffee production cycle phenomenon, and the substantial suppression of the coffee leaf rust, are some of the drivers behind the recent performance of the coffee sector in Costa Rica, El Salvador, Mexico, Guatemala, Honduras and Nicaragua, which combined provide an estimated 1.2 million direct jobs.

Moreover, nearly all the six coffee-producing countries in the region are at different levels of implementing a coffee farm restoration and rehabilitation programme (R&R). It is focused on improvement of existing coffee trees or introduction of new coffee varieties to mitigate the effects of climate change and coffee leaf rust disease, as well as promoting the effective utilisation of farm inputs such as fertilisers and improve general crop maintenance.

Several international and local agencies have been working with farmers, exporters and co-operatives to expand the R&R in many of the coffee farms that are spread across the region’s high altitude areas, characterised by rich, well drained volcanic soils. They are supported by international and local agencies such as the World Bank, United States Department of Agriculture (USDA), the (US) National Cooperative Business Association CLUSA International and other global coffee giants including American multinational coffeehouse (and Roastery Reserve) chain, Starbucks.

At the regional level, national coffee associations, coffee growers’ cooperatives and NGOs are also chipping in with financing, distribution of farm inputs, carrying out research and training to boost coffee production, expanding coffee processing infrastructure and investing in other value addition processes to attract better prices in the global market.

For instance, Nicaragua’s Aldea Global, which is a leading association of smallholder farmers, and UCA SOPPEXCCA, a union of 18 co-operatives, are working with Starbucks and the USDA to support the country’s estimated 45,000 coffee farmers in the renovation and rehabilitation project in this country of 6.7 million people.

In Guatemala, which has an estimated 120,000 farmers cultivating more than 128,000 hectares of Arabica coffee, producers and partners are renovating an estimated 10 per cent of the coffee farms annually, focusing exclusively on the October 2025 distribution of the new Marsellesa coffee variety that the World Coffee Research Institute describes as a “high yielding plant adapted to medium altitudes with a notably high acidity in the cup.”

Starbucks, through partner exporters in Guatemala, such as Anacafé, a union association representing coffee growers across the country, has been implementing the One bag, One tree initiative, entailing the distribution of seedlings of the new Marsellesa coffee variety.

Private farmers’ associations, cooperatives and coffee industry-focused NGOs have been part of the Central America coffee production story with the Specialty Coffee Associations Honduras IHCAFE, Nicaragua’s Association of Coffee Exporters of Nicaragua (EXCAN), Costa Rica’s ICAFE supporting coffee growers and traders to achieve quality through training, research and in some instances funding.

For Honduras, the region’s biggest coffee producer with an estimated 92,000 registered coffee farmers cultivating more than 505,000 hectares, coffee output is projected to reach 5.52 million 60-kilogram bags in 2024/2025 and rise further to 5.8 million bags in 2025/2026 on the back of “a decline in coffee rust, improved labour availability and an 81 per cent surge in international coffee prices, driven in large part by adverse climatic conditions affecting major coffee-producing regions worldwide,” according to a report by the USDA.

More than 58 per cent of the coffee is produced in the Honduran areas of Lempira, Copán, Comayagua and Ocotepeque, with more than 81 per cent of the registered Honduran coffee growers being small coffee growers owning less than 3.6 hectares of coffee farms according to the Association of Honduran Coffee Exports (ADECAFEH).

Meanwhile, in Costa Rica, the coffee sector is likely to record a 10 per cent dip in output as the country anticipates experiencing the effects of the biennial coffee production cycle, referring to the alternating years of strong flowering period or on-biennial period and weaker flowering periods or off-biennial years, a trend analysts say enables the plant to recover before the next harvest.

The country’s coffee regulator, the Costa Rican Coffee Institute (ICAFE), said nearly 92 per cent of the coffee producers are small scale farmers with less than five hectares of land under coffee while six per cent of them own between five and 20 hectares, an equivalent of 21 per cent of the total farmed land. Only two per cent of the producers own plantations of more than 20 hectares, equivalent to 35 per cent of land under coffee.

ICAFE’s executive director Gustavo Jiménez Elizondo said in a recent circular that Costa Rica’s coffee output for the 2024/2025 marketing year would be approximately 1,763,164 bushels (approximately 1.04 million 60kg bags) one per cent down from the 1,808,947 bushels (approximately 1.06 million 60kg bags) for the previous year. The USDA gives a slightly higher figure of 1.3 million bags for 2024/2025 and 1.2 million bags for 2025/2026.

The coffee output in Costa Rica and other coffee-producing countries in Central America is also subject to other challenges such as “labour shortages, a relatively strong local currency and changing weather patterns are also expected to affect production,” Elizondo said.

Despite Costa Rica, El Salvador, Guatemala, Mexico and Panama expecting to post flat coffee production figures for 2024/2025, the USDA predicts an output of 17 million 60kg bags of coffee from Central America and Mexico in
2024/2025, which is 600,000 bags higher compared to the previous year.

At least 95 per cent of the production is Arabica with the anticipated increase attributed to Honduras’ anticipated 300,000 more bags to 5.3 million and a similar addition to Nicaragua’s total production to 2.7 million “on improved yields.”

Honduras & Nicaragua Lead Exports

The coffee production in Central America, like in other coffee markets, could be influenced by global prices catalysing farmer-driven investments in coffee production processes. These include increased labour hires, introduction of intensified farming methods and increased use of farm inputs such as fertiliser to mitigate the negative impacts of adverse climate conditions.

Meanwhile, the structure of Central America’s coffee market is a mix of direct sales, sales through cooperatives and involvement of international exporters working with local cooperatives.

According to the USDA, the region’s bean exports are likely to increase by 800,000 bags to 13.7 million “fuelled by higher supplies in Honduras and Nicaragua.”

Previously, the International Coffee Organization (ICO) indicated Honduran coffee exports to have increased by more than 13 per cent to 5.2 million 60-kg bags in 2023/2024 up from the 4.6 million bags traded in the previous 2022/2023 period.

According to USDA projections, these Honduran coffee exports are likely to increase to 5.5 million bags at the end of the 2025/2026 marketing year driven by “improved yields, favourable and stable climate conditions and expanded access to international markets.”

Furthermore, the report adds that Honduras stands to benefit from global supply shifts, particularly the ongoing production challenges faced by Brazil, the world’s largest coffee exporter.

In El Salvador, with an estimated 23,700 coffee farmers, the coffee export market is dominated by Fundación Salvadoreña para Investigaciones
del Café (PROCAFE), Ecom, Fundación Comercial Exportadora (COEX), Unión de Exportadoras (UNEX), and the cooperatives of Cuzcachapa, La Majada, Sociedad Cooperativa de Cafeteros de Ciudad Barrios (CAFECIBA).

EUDR Threatens CA Exports

A large share of the Central America-produced coffee is destined for the export market especially to Europe, North America and selected Asian markets.

For instance, the Association of Honduran Coffee Exports (ADECAFEH), reports that Honduras is expected to export an estimated 4.8 million bags during the 2024/2025 marketing year, equivalent to a 3.1 per cent year-on-year increase.

The association said as of August this year, more than 4.59 million bags have been exported to Honduras’ key export markets USA (29.0 per cent), Germany (20.4 per cent), Belgium (10.5 per cent), Italy (4.8 per cent), Canada (4.6 per cent), France (3.5 per cent), Sweden (3.1 per cent), United Kingdom (2.9 per cent), Netherlands (2.6 per cent), Japan (2.5 per cent) and others (16.0 per cent).

The projected export volumes indicate a 36 per cent decline from the historical record of 7.29 million bags exported in the 2016/2017 marketing year to 4.68 million bags exported in the 2023/2024 harvest.

The future of Central America’s coffee industry will have to contend with the likely impact on its exports by the European Union Deforestation Regulation (EUDR) that comes into effect in January 2026.

According to France-based Consortium of International Agricultural Research Centres’ (CGIAR) Alliance of Biodiversity International and the International Center for Tropical Agriculture (CIAT), more than 50 per cent of Honduras’ coffee exports are destined to the European market but with the EUDR, the country’s small-scale coffee producers could be negatively impacted. The country has more than 92,000 registered coffee farmers, majority of them smallholder producers.

More than 85 per cent of Honduran coffee farmers “may be at risk of losing access to the European market due to a lack of tools to trace the deforestation-free status of their coffee,” CIAT reports.

The compliance level of Honduras coffee to the EUDR may have recently been improved after CIAT supported the farmers in the country to launch a coffee traceability platform to support the smallholder coffee producers, “and who typically operate outside the more thoroughly mapped, certified supply chains,” to achieve compliance with the European Union market’s new traceability
regulation.

A pilot project recently enabled Honduras to export 20.7 tonnes of coffee the Alliance said “aligned with the upcoming European Union Deforestation Regulation” after embracing “the open-source, open-access component, TraceFoodChain, developed by Permarobotics.”

Anacafé’s president Ricardo Andrés Destarac Bardales said the organisation “has been developing tools that demonstrate coffee traceability from its origin, including data management supported by geospatial analyses and information systems.”

Despite recent concerns by stakeholders in Central America’s coffee industry on the lack of adequate and unified regional coffee databases, some of the region’s coffee producers are racing against time to design, develop and align necessary tools and methodologies to ensure compliance with the EUDR.

Efforts are also underway to clarify how the various coffee data gathering and management digital systems work and interact, and “how the quality of the data is verified, who owns the data and to what extent they are ultimately recognised by importers and competent authorities in the European Union.”

“We know that compliance with these regulations by importers requires more than just goodwill,” said Klemen Gamboa, deputy minister for agriculture, livestock and food of Guatemala.

“It demands investment, technology, technical assistance, access to geo-referenced information and above all, articulated action among all stakeholders: government, private sector, cooperatives and the countries in the region,” she said.

Focusing on Domestic Consumption

Although Central American coffee producers are keen to increase their export volumes of green beans, roasted and soluble coffee including to the EU market, the region’s domestic coffee consumption volumes are also on a growth trajectory. This is driven by international and domestic tourism, surge in coffee shops/bars and other outlets such as supermarkets, malls, office buildings as well as government campaigns in favour of local coffee varieties’ consumption.

Despite global coffee consumption reportedly having declined by 1.9 per cent to 173 million bags in coffee year 2022/23, recent statistics show an increase in domestically consumed coffee in Guatemala, El Salvador and Mexico. In other markets such as Honduras a slight decline in consumption has been reported because of the weakening purchasing power among consumers as the country’s economy finds its footing in the fast-changing global economic dynamics.

In Nicaragua, though, coffee consumption, with an estimated per capita coffee
consumption of approximately 1.5 kg, is largely being influenced by the increasing preference for high quality roasted coffee, especially among younger consumers. This is reflected in the proliferation of coffee shops in larger Nicaraguan cities, offering a wide array of coffee preparations, from cappuccinos to cold brews, according to USDA.

The USDA report adds, new coffee brands at the retail level are stimulating demand for local Bourbon, Pacas and Pacamara variety coffee as batches of the locally grown high quality Geisha variety starting to gain market share in local coffee shops.

For Guatemala, coffee consumption is projected to increase to 720,000 bags in the 2025/26 marketing year, a trend attributed to “the continued expansion of coffee shops in urban areas and the availability of high-quality coffee in approximately 700 supermarkets nationwide.”

With reports indicating Central American coffee producers and traders are increasingly investing to improve their coffee production and trade processes, the future performance of this region’s coffee industry is likely to be influenced by the commodity’s global prices. Of course, key determinants of how coffee farmers, traders and roasters handle significant market issues, including effective utilisation of farm inputs, availability of labour and investment in climate change strategies, will in turn influence overall coffee production.

Shem Oirere is a freelance business journalist based in Nairobi, Kenya. He has spent more than 25 years covering various sectors of Africa’s economy including the region’s agribusiness. He holds BA in International Relations and Diplomacy from the University of South Africa, a higher degree in journalism from the London School of Journalism and is a member of the Association of Business Executives (ABE).