Guatemala's coffee exports to fall up to 3pc this season

LONDON/GUATEMALA CITY: Coffee exports from Guatemala, the world's sixth largest arabica exporter, are set to fall up to 3% this season due to low farmgate prices, a lack of workers and erratic rains linked to climate change, coffee association Anacafe said.

International arabica futures prices are on a tear at the moment, trading near four-year highs mostly because of falling output in Brazil, which accounts for up to half of the world's arabica supply.

Signs of sliding output in Guatemala are more cause for concern, especially as output in top Central American producer Honduras is also declining. Central America and Mexico produce about a fifth of the world's arabica.

"(We've) been having labor shortages over the last couple of harvests. Low prices play a role, its hard to improve wages," Juan Luis Barrios, president of Anacafe, told Reuters in a phone interview.

He added that rainfall cycles in the country have broken down due to climate change, affecting bean growth. Guatemala was also hit by two hurricanes last year, which ravaged swathes of central America, displacing more than half a million people.

Anacafe expects Guatemala will export around 3.1 million 60-kg bags in the 12 months to through the end of September, versus 3.2 million in the prior season. The country exports nearly all the coffee it produces.

Barrios said farmers were incurring losses this season of about 20 to 40 cents per lb, roughly the same as last season. Farmgate prices have risen, helped by rising world prices, he said, adding that the COVID-19 pandemic had pushed up costs for transport, housing and personal protective equipment.

"We're running on close to six years of (prices) not covering the cost of production. That's where you start to see drops in production, some farms being abandoned," Barrios said.

Coffee is one of Guatemala's top three agricultural exports, with almost one million people in the country relying on it for their livelihood.