El Salvador’s coffee industry celebrated a significant milestone in December 2024 as the price of coffee soared by 70%, according to the latest report from the International Coffee Organization (ICO). The average Composite Indicator Price (CIP) for a pound of coffee reached $2.99, a notable increase from $1.75 in December 2023.
The CIP represents the average price of a pound of coffee in the New York and London markets, covering Colombian milds, other milds, Brazilian naturals, and robusta varieties. This recent spike marks the highest coffee price since April 1977, when it averaged $3.14 per pound.
The Salvadoran Coffee Institute (ISC) reported that the average export price of Salvadoran coffee was $263.90 per quintal during the first two months of the 2024-2025 harvest season. In these months, the country exported 44,427 quintals, earning $11.72 million—a 38% increase in volume and a 59.5% rise in value compared to the previous cycle.
The ICO attributes the price surge to several global factors, including the strength of the U.S. dollar and rising production costs. In Brazil, the world’s largest coffee exporter, two major companies have sought more time from local courts to meet their financial obligations and avoid bankruptcy. The higher market prices have led brokers to issue margin calls, adding financial strain amidst port delays and rising operational costs.
Logistical challenges, such as container shortages in Colombia and extended shipping times from Asian producers to Europe, have further strained the global supply chain. The ICO highlights that these issues are compounded by disruptions in the Suez Canal, affecting Asian producers’ trade with European markets.
Additionally, the upcoming enforcement of the European Union’s Deforestation Regulation (EUDR) has influenced coffee prices. The anticipation of this regulation caused the CIP to dip from $3.11 on December 18 to $2.99 on December 19, following a postponement by the European Council. Despite this fluctuation, December 2024 still recorded a 10.7% price increase compared to November’s $2.70 per pound.
As the global coffee market faces ongoing challenges, El Salvador’s coffee sector continues to navigate the complexities with resilience, bolstered by rising prices and increasing export revenues.