Guatemala’s coffee industry, which early this century transformed its production to exploit demand for higher quality beans, requires another “revolution” in the face of weaker global prices, an industry leader said.
Guatemelan farmers have been left particularly “vulnerable” to the retreat in coffee prices by the setback to production from the outbreak of rust which has affected plantations in many Central American, said Alejandro Keller, vice-chairman of Anacafe, the country’s coffee industry group.
“They are facing low price at a time of lower production,” he told the Global Coffee Forum in Milan.
Guatemala’s coffee exports were, at 3.08m bags last year, down 19% over two years, as the supply of supplies for shipment fell, data from the International Coffee Organization show.
Meanwhile, prices paid for farmers were, at 151 cents per pound last year, 34% below a 2011 high.
Avoiding reliance simply on a market recovery for improving their fortunes may require a “revolution” among Guatemala’s coffee farmers, Mr Keller told Agrimoney.com.
“We need to do more to find value in our production,” said Mr Keller, who has a coffee plantation near the El Salvador border.
“I am sure we can do something more to achieve this,” a change which could involve finding new markets for coffee and processing residues, with the forum hearing of markets being found for bean extracts in industries such as textiles and plastics, besides simply as a high-quality compost.
Coffee vs corn
Guatemalan growers have already undertaken one revolution, early this century, in a switch in production from larger, low altitude farms to more mountainous areas, where higher-quality beans can be produced, change Mr Keller said was “driven by market forces”.
“Lowland farmers replanted with rubber, palm oil and sugar cane, which at the time offered better returns,” he said.
“At the same time, farmers in the highlands planted more coffee, on areas where they had been growing the likes of corn and beans.”
This strategy played to an international market marked by rising demand for the higher quality beans produced at higher altitudes, which are, for instance, the type which can be dark roasted.
Grower prices showed a steady rise from the 2001 figure of 45.35 cents a pound, more than quadrupling in a decade, according to ICO data.
While coming amid a strong market, Guatemala’s price improvement also outstripped that of countries including Colombia, Costa Rica, Honduras and Nicaragua.