Switzerland has emerged as the top-paying buyer, shelling out an impressive $626 per quintal for Salvadoran coffee during the 2022-23 harvest. According to statistics from the Salvadoran Coffee Institute (ISC), this price is the highest recorded in the entire harvest.
El Salvador, known for its “golden bean,” exports coffee to more than 40 countries across the Americas, Europe, Asia, and the Middle East. Switzerland, in particular, stood out by purchasing a quintal at $626, a figure 2.6 times higher than the harvest’s average of $236.7, as reported by ISC.
While Switzerland only acquired one quintal, this strategic move underscores the importance for producers to engage with direct buyers. Direct transactions often yield better prices for the coveted beans compared to relying on the New York Stock Exchange’s Contract C, which is subject to market speculation. As of November, the average price through direct transactions was $169.47, a 39% premium over the market average.
Honduras, with an average payment of $529.4 per quintal, secured its place as one of the top buyers, despite only acquiring 51 units valued at $27,000. Following closely, Norway ranked as the third-highest paying nation, offering an average of $407.31 per quintal for the 848 units it purchased, amounting to $345,401.
ISC records reveal an interesting trend: countries that pay the best prices for each quintal tend to have smaller purchase volumes, while prices decrease as export quantities rise.
Other noteworthy countries in the “good payer” category include Chile ($398.90), Ireland ($363.2), Taiwan ($348.80), and Hong Kong ($347.2), among others. In contrast, Malaysia reported the lowest average at $187.5 per quintal.
Coffee, El Salvador’s second-largest agricultural export after sugarcane, occupies the ninth position in the export basket, contributing 2.9% to total exports, according to the Central Reserve Bank (BCR). Despite a 15.7% decline in coffee exports from January to November 2023, amounting to $25.7 million, the sector still generated $145.6 million in revenue.
The United States remains the primary buyer, holding a 41% share, with 262,993 quintals shipped during the 2022-23 harvest, valued at $60.26 million. This translates to an average price of $229.13 per unit. The historical significance of the U.S. as a major trade partner dates back to the 1940s when it became El Salvador’s primary coffee buyer, comprising 90% of exports at the time.
Germany and Belgium follow as the second and third-largest buyers, representing 8% each in the total export value. Germany purchased 53,292 quintals, contributing $11.3 million at an average price of $213.08, while Belgium acquired 50,776 quintals valued at $12.09 million with an average price of $238.24.
Notably, 59% of the exported coffee falls into the differentiated category, including gourmet, organic, sustainable, fair trade, and specialty coffees. Soluble coffee constitutes 6%, while 20% is shipped as inferior-grade coffee.