The Nicaraguan coffee sector is in the middle of the worst crisis of the last decade. “With coffee prices plummeting to $89 per 45 kilogram (kg) bag in May 2019 and farmers not having access to credit, coffee exporters predict that coffee production could fall at least 15 percent in MY 2019/2020”, USDA Foreign Agricultural Service released the report on Friday, May 31, 2019.
Others estimate that coffee production could plummet more than 20 percent. In addition to the challenges of low international coffee prices, Nicaragua has been immersed in a social-political crisis since April 2018.
This has resulted in large-scale capital flight, forcing banks to curtail credit across all economic sectors. Coffee farmers do not foresee a short term solution to the crisis and expect that production numbers will continue on a downward trend beyond the 2019/2020 coffee harvest.
The 2018/2019 coffee harvest was good. Total coffee production in 2018/2019 reached over 3.1 million 45 kg bags or 2.3 million 60 kg bags, a slight decrease compared to the previous year.
Excellent climate conditions with rain well distributed throughout the year, and a homogenous ripening of the coffee beans contributed to a good harvest. Other positive factors included some farmers still having access to finance and recent renovations of 20,000 hectares of coffee plantations.