Salvadoran coffee is at its best price in the last three decades

Salvadoran coffee has been sold this year at its best price in the last three decades, at or above $220 per quintal, according to the Salvadoran Coffee Council (CSC).

The average price of a quintal of coffee stands at $229.06 for the 2021–2022 cycle, which has just finished its cut. If compared to the value recorded in the previous harvest, that of 2020–2021, the Salvadoran aromatic increased its value by $53.93, 30.7% more compared to the $175.13 paid on average last coffee year.

This price is also the highest recorded by the Salvadoran Council since the 1989-1990 harvest, 32 years ago. In this period, only in 2011 and 2012 did the quintal manage to overcome the barrier of $200, selling at an average of $202.52 and $225.86, respectively.

After spending four years with low prices, the international price of coffee began to rise in 2020, driven both by obstacles in the logistics chain and by the increase in inputs and a distortion in demand.

Volume falls, but value grows.

Salvadoran producers can sell coffee directly to buyers and also through the «C» contract, to be listed on the stock exchange at future prices. This last mechanism is the one that usually has lower prices because it depends on the ups and downs of the international market.

The Council reports that in the 2021-2022 cycle, 469,718 quintals of coffee have been exported, equivalent to an income of $107.5 million, figures from October 2021 to June 2022.

Compared to the same period of the 2020-2021 harvest, coffee exports have fallen by 21,064 quintals, or 4.3% less compared to the 490,782 sent to the international market last year.

Despite the drop in volume, the monetary value paid for exports increased by $24.8 million and is 30% higher than the $82.7 million recorded in the same period of the previous harvest.

The International Coffee Organization (ICO) explains that the increase in the price of aromatics, in addition to logistical problems, remains on the rise due to a deficit in supply, since world production is expected to be less than global consumption.

The latest provisional estimate indicates that world production for the coffee year 2021–2022 stands at 167.2 million bags (about 100.3 million quintals), while demand will be 170.3 million bags (102.1 million quintals).

Who buys Salvadoran coffee?

Salvadoran coffee growers have exported 51.4% of the production in the 2021–2022 cycle, which as of last June reached 912,540 quintals.

Of what was exported, the United States was the main buyer, with a 45.7% share for this harvest. The CSC reports that 214,774 quintals have been shipped for a value of $45.9 million, that is, at an average price of $213.7 per quintal.

Germany represented 10.8% of exports at an average price of $239.1 per quintal, while Japan bought 8.6% at an average of $230 and Belgium bought 8.7% at about $237.3 per quintal.

The importation of coffee

1.-Cultivated areas

The CSC estimates that in 2020 there will be more than 30,000 farms distributed in 194 municipalities. Santa Ana has the largest cultivated area, and Cabañas the smallest.

2.-Jobs

It is estimated that there are 24,627 producers, of which 35% correspond to women and 61% to men. For the 2020–2021 cycle, they generated more than 45,600 jobs.

3.-Cup

The main varieties of coffee are still Bourbon and Pacas, but producers have diversified to include Catimor, Cuscatleco, and even Geisha.