Commodities Buzz: Costa Rica Coffee Production To Rise 14.3% In MY 2017/18

According to the Costa Rica Coffee Institute (ICAFE), Costa Rica Coffee production increased by 14.3 percent during MY 2017/2018 to 1,510,000 bags after a decline in production of 17.6 percent during MY 2015/2017. The higher production level resulted from good weather conditions, especially during the flowering period, which caused good development of the plants and a good harvest. During the last three crops, the cyclicality of coffee production has resulted in relatively large fluctuations in production. MY 2018/2019 is the low production year of the bi-annual cycle. Even though it is still early in the production process, the 2018/2019 crop could decline to as low as 1,360,000 million bags, as this year marks the low year of the production cycle in several important production regions of the country. According to industry sources, the area of Los Santos and Tarrazn++ looks good in terms of the development of the trees, and the plants have already flowered in those regions after the first rains of the year. Although the rainy season is settling in throughout the country, coffee trees in the Occidental Central Valley have not flowered yet.

Export volume declined to 1,112,510 bags in 2016/2017 from 1,248,588 bags in 2015/2016 because of lower production. Exports are forecast to reach 1,250,000 bags during 2017/2018 and 1,110,000 bags in 2018/2019. Coffee sold for export during 2016/2017 was valued at $ 288.3 million, as compared to $ 322 million in 2015/2016. The relatively higher average export price did not compensate for the lower export volume. Most of Costa Ricas coffee continues to be exported to the United States (43.2 percent), followed by Belgium (17.7 percent), Germany (5.0 percent), Australia (4.4 percent), and South Korea (4.2 percent). The United States has been the main destination for Costa Ricas coffee for several years now. However, exports to the United States declined from 639,093 bags in 2015/2016 to 480,675 in 2016/2017 (24.8 percent). This is the lowest export volume to the United States in the last 10 years. Also noteworthy is the fact that Costa Ricas exports to Australia and South Korea have gained in importance in recent years, reaching almost 50,000 bags each. Costa Ricas exports are almost exclusively raw material, that is, coffee is exported n++not roasted or decaffeinated.