El Salvador, renowned for its coffee production, witnessed a notable surge in coffee exports in February, marking a promising turnaround for the golden bean market. According to the Salvadoran Coffee Institute (SCI), a remarkable increase of 37,813 quintals was recorded compared to January, with a total of 44,422 quintals of coffee exported during the month.
The SCI attributed this exceptional rise in exports to the ongoing coffee harvest of the 2023-2024 season, which commenced in October 2023. Over the first two months of the harvest, a substantial increment in coffee exports was observed, totaling 36,373 quintals of coffee.
This milestone represents a significant 50% surge compared to the same period in the previous harvest cycle of 2022-2023 when 18,000 quintals were exported. Highlighting the economic importance of coffee to the nation, the SCI noted that over the last five years, coffee has consistently accounted for approximately 78% of El Salvador’s total exports.
However, despite this recent uptick, the total volume of exports from October 2023 to February 2024 remains 38.4% lower than the same period the previous year. This decline is primarily attributed to delays in the start of the 2023-2024 harvest due to adverse weather conditions, including irregular rainfall affecting coffee flowering, particularly in regions situated between 500 and 800 meters above sea level.
The lack of adequate rainfall adversely impacted both the quantity and quality of the harvest, leading to delayed production and collection of coffee beans. The SCI explained that the processing and preparation of coffee beans typically take around a month and a half before they are ready for export, further exacerbating the delay caused by the late harvest.
Despite these challenges, the SCI remains optimistic about future prospects, noting that historically, February has been a month of significant increase in coffee export activity, with March marking the pivotal point in the coffee year in terms of export volume. With the harvest delayed, it is anticipated that the peak export months for the 2023-2024 coffee year will be between April and May.
In terms of production volumes, official data indicates a marginal 1% increase in coffee production compared to the previous harvest cycle, with a total of 840,087 quintals of coffee harvested as of February 29th. Graphical representations shared by the SCI illustrate a notable increase in coffee harvests in January and February compared to the same months in the previous year.
Internationally, the SCI highlighted the impact of the European Central Bank’s decision to raise interest rates as a measure to curb inflation in Europe. This increase in interest rates, from 0.2% in June 2014 to 4.5% in October 2023, has led coffee-importing companies to adopt a cautious approach to their purchases, affecting contract closures in the coffee market.
Despite these challenges, El Salvador remains hopeful for a successful coffee harvest season, banking on the resilience of its coffee industry and the anticipated increase in export activity in the coming months.