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GUATEMALA COFFEE STRATEGIES: POLITICS AND PRODUCTION.

Article Excerpt
Guatemala's 2002-2003 coffee year has ended with the Asociacion Nacional del Cafe (Anacafe) confirming total production of 4.5 million quintals (60-kg bags). The figure is 600 fewer bags than last year.

Anacafe vice president Jose Angel Lopez said that preliminary data indicate the country earned US$304 million on sales of 5.2 million bags. More coffee was sold than produced for the year because stocks from the previous year's harvest were sold during this coffee year, ending Sept. 30. The previous year, exports were valued at US$248.3 million, US$55.7 million less than this year.

Lopez said that the lower production figure for the year just ending represents a new balance point for the industry, and that, from now on, production will tend to average between 4 million and 4.5 million quintals. He also said that the coffee crisis (see NotiCen, 2003-01-03) is not over.

Lopez told that Guatemalan daily Prensa Libre that Anacafe would follow a strategy of improving quality, seeking new markets, and taking advantage of the shift toward gourmet coffees in international markets. "In our strategy, we note that consumption of high-quality coffee keeps growing in the United States, giving us an advantage."

The advantage is that Guatemala and Central America grow a high percentage of the world output of these higher-demand, limited-supply, coffees. Lopez said that these market-growth characteristics apply to Japan and Europe as well. He said he sees enormous potential in these trends.

Lopez said there are also encouraging signs of emerging markets in China, Russia, and Eastern Europe, where new consumers will reduce the current imbalance between supply and demand. But, while the medium-term outlook for producers of these preferred coffees is good, they still confront near-term financial problems. The Guatemalan Congress authorized a US$100 million bailout last year, but still has not funded it for lack of money.

Despite its recent downward price trajectory, coffee continues to be Guatemala's principal export product, according to Banco de Guatemala (Banguat) figures. The Central Bank's statistics are slightly different from those of Anacafe and show that coffee brought in US$317 this year. This is US$59.4 million more than last year. Coffee out- earned second-ranked sugar, which earned US$306 million, US$73.9 million more than last year. Third place goes to maquila clothing exports, at US$271.7, up US$94.2 million. Bananas were fourth, contributing US$205.1 million to the country's coffers, an increase of US$31.8 million.

These increases have reversed a two-year decline in Guatemala's export income. As of Oct. 2, total figures stand at US$2.14 billion, an increase of US$554.9 million over the same period last year. The commercial deficit was reduced and stands at US$1.1 billion.

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