Guatemala coffee output steady as farmers struggle with low prices

NEW YORK: Guatemalan coffee production in 2019/20 is seen unchanged from 2018/19 as low global prices prevent the country from fully recovering from a 2012 fungal outbreak, according to a US Department of Agriculture attache report published on Monday.

Coffee is the second most important agricultural export for Guatemala and its production growth has been sluggish while  the revenue it generates for farmers and the country has fallen, the attache in Guatemala City said.

Guatemalan coffee production in 2019/20 is seen at 3.393 million bags, up about 0.1% from the previous season. Exports are also seen as largely unchanged at 3.146 million bags.

Recovery from the devastating 2012 outbreak of coffee rust, a harmful fungus, has been "slower than expected" the report said. Some seed varietals designed to be resistant to the fungus can generate lower quality beans, while some can fail to resist the disease as expected, the report said. Low prices, meanwhile, make it difficult for farmers to invest in their farms, including in potentially disease-mitigating measures.

Global coffee prices are trading near their lowest in about 13-1/2 years after a record-large crop in top grower Brazil.

"With current low prices, even under the best yields and direct sales, a small farmer will still be losing money each year," the report said.

"Coffee farmers are experiencing significant losses and increasing loan defaults, resulting in considerable migration of farmers from the rural areas to the city, including many migrating to the United States."

Guatemala's coffee exports in 2018 accounted for $693 million, a 6% reduction from the $738 million they generated in 2017, the report said.