This report was originally published a few years back, but the GOOD news are that Honduras has done an AWESOME job on bringing its coffee on track and today serves as a true role model for other coffee industries across the world. We are in the middle of finalizing a Special Series of reports on Honduras which will be published here in the coming weeks and months so please stay tuned 🙂
During the last five years Central American Coffee grower Honduras has been one of the true success stories in the world of coffee. Being one of many growing countries dominated by small-holder producers eking out a living similar to that of a subsistence farmer and receiving little or no official support, a series of major political reforms changed that overnight. From a country with average production of about 3 million 60-kilogram bags just a decade ago, Honduran coffee production has been booming both through new renovation and replanting programs, as well as from private investment into new areas. But since harvesting a record 2011-12 crop of 5.5 million bags the Central American country has been hit hard by the rust outbreak which has devastated the region in recent months. As the country’s producers are counting their losses the industry is asking whether the Honduran coffee boom is over?
BY MAJA WALLENGREN
It was all going so well for the Honduran coffee industry. After the last record harvest, which surpassed even the most conservative forecasts for growth, some analysts had already started adjusting their forecasts upward to 6 or even 6.5 million bags in the current 2012-13 crop year. This was by most accounts too optimistic too start with, because even though the last planted new areas still won’t enter production until this and next year, most of the areas already producing coffee were in a state of seasonal stress as trees were recovering from the bumper yields.
But then came the rust, and there is no denying that Honduras has been just as hard hit as its fellow Central American neighborhs in Guatemala, El Salvador and Nicaragua which have borne the brunt of the onslaught of the rust disaster.
“We don’t believe that exports in the 2012-13 harvest will reach more than a maximum of 4.2 to 4.4 million bags because of rust, so we are talking about a significant impact on our production,” Victor Molina, general manager of the official Honduran Coffee Institute, of Ihcafe, said in an interview with the Global Coffee Review.
Compared to the initial Ihcafe forecasts for another bumper crop of between 5 and 5.5 million bags and the potential for production of up to 5.7 million bags this is by all counts disappointing. And the optimistic expectations heard across the market just a year ago for Honduras to be able to reach between 6 million and 7 million bags by the 2014-15 harvest now appear to be all but a faint dream.
And as reports from across Central America confirm the dire outlook is expected to persist for what could be at least two, if not three or four years, both old and new producers in Honduras’ coffee sector are counting their losses.
“It’s not just the old areas that have been hard hit, but a lot of the new areas have also been hit, even if not as severely,” said Juan Jose Osorto, a former manager of Ihcafe who worked with Ihcafe’s research institute back in the 1960s when the first studies on rust and how to control it was done in Honduras. “Of course the farms which have new coffee are generally better maintained, and if the plant is in a better state and with adequate levels of nutrition, of course it will also do better against rust. But many of the people who got into coffee planted the old varieties like Catuai and Caturra which have a better cupping profile but which are not resistant to rust,” he said.
The Honduran coffee area was estimated at 308,000 hectares in the 2012-13 cycle, of which 275,000 hectares were believed to be in production, according to data from the U.S. Department for Agriculture, or USDA. This was up from a total area of 285,000 hectares in 2011-12 during which cycle 255,000 hectares were in production, and overall represented an increase of 37,000 hectares of new coffee in the last five years.
Ihcafe says the area in production in the current cycle totals 272,000 hectares, which include 15,000 hectares of traditional land cultivated by small coffee growers which have been fully renovated and replanted thanks to a government-financed renovation program. Under the government’s coffee renovation project, which was launched in 2010 and target to renovate a total of 50,000 hectares by 2020, the Honduran government has been financing annual replanting of 5,000 hectares, boosting the tree density to at least 5,000 trees per hectare from an average of 1,500 in areas not renovated, according to Ihcafe.
This compares to 10 years ago when Honduras had about 240,000 hectares of land cultivated with coffee, according to Ihcafe figures, and the main rise in production has been attributed to improved yields. Honduran coffer growers have gradually brought productivity up to an average 19 to 20 bags in the 2011-12 cycle from between 8 and 9 bags in the 2005-06 cycle, according to Mario Ordonez, technical manager at Ihcafe.
Among positive news from Honduras is the visible industry interest in helping the country’s producers staying on track. Ten years of intensive focus on specialty coffee, and the significant importance Honduras gained as a reliable source of replacement of mild washed arabica beans in the wake of the Colombia production crisis, have brought a long list of private companies to come to Honduras’ rescue in the fact of the rust attack.
“As with many crises, there is lots of information available about Roya, but it’s difficult for farmers to discern what is really useful,” said David Griswold, CEO of Portland-based coffee importers Sustainable Harvest.
Last month, the company launched a “disaster relief effort” to aid organic coffee farmers in Latin America, with a major part of the program concentrated in Honduras. Other companies like Green Mountain Coffee Roasters, Cafe Moto, Cafe Mystique, Dillanos and the Coffee Trust foundation have also announced new projects in Honduras.
“Our goal with the Roya Recovery Project is to work with the industry to help farmers make well-informed decisions so they recover as quickly as possible from the devastation,” said Griswold. The “Rust Recovery Project” is now launching a series of tools and training manuals that will help bring instruction on best practices especially designed for certified organic farmers, who by the nature of not using chemicals have been the most exposed to the infestation and spread of rust. Industry officials like Osorto agree that organic farmers by far are those hardest hit.
“All the coffee farmers here are very concerned, but the organic farmers really don’t know what to do, they have mostly have old coffee and old varieties that should have been replanted a long time ago and which have no resistance level to rust,” said Osorto, who is a coffee producer himself.
With the 2012-13 coffee crop in Honduras already down at least 1 million bags, and the impact of rust expected to continue to worsen in the next harvest while farmers and authorities are working on bringing the outbreak under control, the outlook for Honduran growers may nevertheless be a little better than for most of the Central American growers.
“You can’t completely eradicate the rust problem but you can bring it under control. Everybody in Honduras have been pushing very hard to get to the levels of production they had last year and I am hopeful that they will be able to come back, they’ll figure out a solution and will find the investment,” said Jack Scoville, a vice president at the Chicago-based brokers The Price Group.
Other analysts, exporters and traders agree. The political support is a positive contributor that not many coffee producing countries can rely on, and with the government in Honduras having taken a pro-active role in the country’s coffee industry in the last five years, the coffee losses may be brought under control in Honduras more quickly than in the rest of Central America.
“People are getting desperate, some are trying to sell their farms both because of the rust issue as well as the low prices that don’t show any signs of improving,” said Osorto, but adds: “We still do have some areas left that will start to enter production in the next few years and in my opinion we should still be able to get a harvest of about 4.6 million bags next year.”
For more details and coffee news, please see: https://globalcoffeereview.com/market-reports/view/is-the-honduran-coffee-boom-over