Costa Rican Coffee Farmers Get Ready For the "Hardest Season in Years"
The country will produce more coffee this year. But that won’t redeem the crash in prices. With strong competition for Costa Rican coffee, roasters must contract before the season is over.
Costa Rican Coffee Dates
Harvest: August to March (peaks November and December)
Pre-contracting: November to early January
Sales period: January to mid-April
Shipments: Four on schedule in April
Delivery: From August
Is Costa Rica Producing More Coffee in 2022-23?
Yes. Coffee production in Costa Rica is expected to be bigger this season. Projections suggest 1,36 million bags, 90 thousand more than last year.
Costa Rica’s coffee pickers started working around late August. They’re at their busiest now. Farms reached the peak of the harvest in November.
Costa Rica’s coffee pickers started working around late August. They’re at their busiest now. Farms reached the peak of the harvest in November.
But don’t be fooled. This is not great news in itself - unless you’re into trading commodities.
This is an “on” year in the Costa Rican biennial cycle. The 2022/23 volume predicted by ICAFE is simply returning to the levels of 2020/21.
The simple projection hides the steady decline in the country’s number of farmers since the leaf rust crisis in 2013, followed by years of low coffee prices.
>> Learn About Costa Rica on Algrano's Origin Page.
>> Learn About Costa Rica on Algrano's Origin Page.
“In general, it’s expected that Costa Rica sees an increase of 12% in production compared to the 21-22 coffee harvest,” says Eric Thormaehlen of exporting company Coricafe.
The number doesn’t seem to bring Eric any joy. “It has rained substantially more than in previous years, causing serious problems to the country’s road infrastructure and to coffee farmers. They are having serious issues with diseases such as leaf rust and anthracnosis.”
Jonathan Duran, International Sales Manager of CoopeAgri, agrees. He says that this year’s strong rains have “caused the coffee beans to not fully ripen on the plant, as they fall or burst because of excess water”.
Located in the Perez Zeledon region in the south of Costa Rica, CoopeAgri’s harvest started two weeks late. And Jonathan suggests that the volume might be small.
“In CoopeAgri we received 120,142 fanegas [46 kg of green coffee] in the 2021/22 harvest and we expect a maximum of 115,000 fanegas this harvest.”
>> What Changed? Check the December 2021 Harvest Report and Compare!
>> What Changed? Check the December 2021 Harvest Report and Compare!
Will Costa Rican Coffee Sell Out? What Can I Do?
The key information for green coffee buyers doing direct sourcing is that the demand for Costa Rican coffee is strong. Exports are expected to reach the highest level since 2015/16.
In other words, yes. Costa Rican coffee is going to sell out fast.
Last year, producers had little coffee to offer from January-March, when we expect to receive most samples. The roasters who secured coffee pre-contracted before samples arrived in December and early January.
>> Quarter Horse Coffee Started Pre-Contracting in 2021. They Always Get Coffee on Time.
>> Quarter Horse Coffee Started Pre-Contracting in 2021. They Always Get Coffee on Time.
This year should be the same. Especially now that the market is inverted.
Availability to pre-contract depends on the producer. The more they have pre-sold, the less they will be willing to contract now. Here are some examples:
Aquiares: Most of their harvest pre-contracted. Needs to wait until December for new orders.
Coricafe: Ready to contract washed coffees. Micro-lots from mid-March.
Coopelibertad: Pre-contracts are available now. Samples are expected at the end of December.
CoopeAgri: Ready to pre-contract. Samples of the washed lots will be sent at the end of January. Micro-lots at the end of February.
Coopetarrazú: Pre-contracting from December. Samples will be sent by mid-January.
What’s the Price of Costa Rican Coffee Today?
Costa Rican commodity coffee has been trading at around US$2.15/lb in November. That’s 10% less than the average October price and 20% less than September.
On the ground, both Jonathan and Eric say the average price paid to producers this month is 80.000 colones, the equivalent of US$130.00 per fanega of cherry.
1 fanega = 258kg of coffee cherry = 46kg of green coffee prepared to export
This means producers are getting US$1.27 for each pound of green coffee. This is the base price (not the final one) based on cherry deliveries to cooperatives and mills.
“We pay for coffee cherry and this is done through a process called liquidación. First, we pay a base price per fanega of fruit delivered and then we make adjustments until we reach a final price for the coffee,” Jonathan explains.
By the end of the season in March 2023, the local price might go up by 30%. “We expect to pay around US$170.00 by the end of the season,” says Jonathan.
>> Check Algrano's Resources About Coffee Prices!
>> Check Algrano's Resources About Coffee Prices!
Prices Crashed. What's Happening to Producers?
Coffee prices have been in decline since October when coffee was already being traded in Costa Rica. When the NY prices began to crush, local trade ground to a halt.
“Producers and mills got the market all wrong. Everyone expected the market price to go beyond 300 cents of dollar per pound,” starts Eric.
“So almost all of them sold very poorly and by simple denial coffee sales have come to a complete stop. Who knows how long this will last? Because sooner or later they will have to see the reality.”
For Jonathan, sales have slowed down “mainly on the consumer side”. But he shows that what Eric said is correct.
“We are all very worried because many investments were made last year. We expected to have a harvest with good prices. Production costs are still high and this puts a lot of pressure on us.”
Were Coffee Farmers Better Off Last Year Anyway?
Coffee buyers might think that the past couple of years has been a bonanza for producers. But we asked Eric if those prices were enough to cover the increase in the costs of living caused by inflation and war.
“Definitely not,” he answered.
The exporter explained that the high prices merely helped small coffee farmers recover from years of financial loss and debt. They were not reflected in better farming practices.
“The costs of agricultural inputs such as fertilisers have doubled or even tripled. Coffee plantations in general have not been cared for as well as they ought to have been. A better harvest is expected per bi-annual cycle but with a lower yield per hectare.”
Inflation doesn’t seem to be going anywhere anytime soon. Jonathan worries about the future of producers, who will be left with the same low prices, this time with much higher costs.
Overall, Eric is bracing for what he calls “one of the hardest seasons in recent years”. CoopeAgri is doing the same, doubling down on its social projects.
According to Jonathan, they have donated 84 houses to low-income families in the last 19 years. They invest Fairtrade premiums to support children who have been abandoned or have special needs.
The cooperative recently launched a new beverage in the local market. Called NAOX, it’s a drink made from coffee mucilage create to provide another source of income for farmers.
Let’s drink to that.
Luiza Furquim is the Head of Content at Algrano, the world’s leading direct trade platform for green coffee. Originally from Brazil, she worked as a reporter in Sāo Paulo before moving to the UK, where she became a specialty roaster. Having visited dozens of coffee producers, Luiza is passionate about sharing their stories.
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