USDA – Guatemala’s production to drop to 7 million bags

MILAN – According to Usda, coffee production in Guatemala in MY 2009 is to drop to 3.7 million bags. International coffee prices have not promoted growth and investment. After maintaining planted area constant for the last 5 years, new planted area of 4,000 Ha. after Hurricane Stan (October 2005) has not come into full production yet. The high cost of fertilisers has reduced usage which has negatively affected yields. Post also forecasts that exports for MY 2009 will drop 12% to 3.4 million bags, compared to the 3.8 million bags exported during 2008.

Guatemala has experienced a very interesting change in coffee production over the last 25 years. In 1980, 20% of production was hard and strictly hard beans, the higher quality beans that bring better prices in the market. The lower qualities, prime and extra prime, accounted for 80% of coffee production. Guatemalan coffee producers recognized the problems inherent in relying so extensively on lower quality product, so they made a strategic decision to focus on high quality coffee.

By 2005, 80% of the coffee production was hard and strictly hard, while prime and extra prime represented 20%. Although total coffee production has dropped (due in part to low international prices in the early 2000’s), the financial security of the industry has strengthened. Currently, about 80% of production is carried out on small and medium sized farms, located in high altitude zones that produce hard and strictly hard beans.