El Salvador Reaps Record Coffee Earnings

Coffee growing near Tacuba, El Salvador.

El Salvador has seen record earnings in coffee this past year; the combination of increased cultivation and soaring world prices has led to many coffee producers bringing in more money than they’ve seen in a decade. According to the Salvadoran Coffee Council, the past year’s export earnings were over $435 million – an increase of 130% from the previous year. A large part of this increase is thanks to the world price of coffee, which is currently at just over $200 per quintal (hundredweight, or 100 kilograms, about 220 pounds). Yes, many of you buy coffee for over nine dollars a pound, nowhere near the 90 cents per pound it’s being sold for, but keep in mind this is the “green” coffee bean. Your price includes the cost of transport to the roaster, the roasting of the coffee bean, the fancy coffee packages, transporting to the distribution centers and stores, all the people who are involved with this process along the way, not to mention the brand of the coffee, and marketing too. You might be feeling the sting of higher coffee prices; they are double what they were five years ago, which was double what they were five years before that. That’s right, in 2000, coffee prices were around $50 per quintal. Coffee prices (for green coffee beans) are higher than they’ve been in over twenty years. What’s happening? Coffee shortages. Coffee has been affected by recent climate events, such as flooding and droughts, which has shrunk the world supply of coffee.

Thankfully, El Salvador has been able to add to its total harvest in the past year to reap these benefits. This past year, El Salvador harvested the largest quantity of coffee in a decade and a 67% increase over last year’s harvest. It’s all relative, however, because it looks good when we compare it to the 2000/2001 harvest year. But that year was lower than it had been in over ten years. So, although El Salvador has made great gains compared to the previous ten years, if you line it up with the previous 22 years, it’s not looking as hopeful. Perhaps, though, production will continue to increase (trying to insert optimism here!) But it also looks a little bleak, as many coffee fincas are aging and the plans are to take them out of production, which would reduce overall harvest yields. The coffee groups are calling for investments in renovating old coffee fincas and planting new coffee trees, which will help for the future, but likely we’ll see a dip in El Salvador’s coffee earnings over the next few years.

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