Arabica beans and the Costa Rica coffee production decline

Costa Rica shipped 60,757 bags of coffee in January, each 60 kilograms, down 28% year on year, according to ICAFE. For the 2023/24 season the agency expects about 1.3 million bags exported, nearly 13% below the previous cycle, with a smaller harvest and ample international supply behind the drop.

Arabica beans from Costa Rica mostly go to the United States and the European Union, but the EU Deforestation Regulation has made importers cautious about placing orders, even though the rules allow an 18-to-24 month adaptation period and may apply from late December 2024. A separate hydrocarbon contamination of tap water in the San José area adds concern about soil and future coffee quality.

The Costa Rican coffee industry has recently faced multiple challenges. According to ICAFE data, coffee exports in January plummeted 28% year-on-year, and the full-year export forecast has also been revised down by nearly 13%, with adverse weather and a global oversupply of Arabica beans both applying pressure. At the same time, the EU Deforestation Regulation (EUDR) has made importers more hesitant, adding further uncertainty to export prospects. To make matters worse, the tap water in the San José area has been contaminated by hydrocarbons, which not only affects residents' health but may also impact the soil and future coffee quality. This article will sort through three threads—the export decline, policy pressure, and the water quality crisis—to help coffee lovers gain a comprehensive understanding of developments in the origin.

According to the latest data released by Costa Rica's coffee institution ICAFE, the country's coffee exports in January of this year fell 28% compared with the same period last year, with a smaller harvest and ample international market supply the main drivers behind the decline.

ICAFE disclosed that a total of 60,757 bags of coffee were shipped in January, each weighing 60 kilograms. For the current 2023/24 harvest season, Costa Rica estimates exports of about 1.3 million bags, a decrease of nearly 13% compared with the previous cycle. Local officials pointed out that unfavorable weather conditions, combined with a possible oversupply of Arabica on the global market, are putting downward pressure on prices.

Costa Rica's main coffee buyers are concentrated in the United States and the European Union. However, selling coffee beans to the EU now requires compliance with the EU Deforestation Regulation (EUDR) introduced earlier. The regulation prohibits any individual or company from selling products linked to deforestation on the EU market, including coffee, cocoa, and others. The regulation has an adaptation period of 18 to 24 months and could take effect as early as the end of December 2024. Because of this, many importers are unwilling to place orders lightly, and although many coffee-producing countries have already taken countermeasures, they have also paid a considerable financial price for doing so.

Meanwhile, an incident recently occurred in the San José area of Costa Rica. According to an earlier report by Costa Rica's La Nación, since the end of January, the country's Water and Sewerage Authority (AyA) has received complaints from residents in multiple cantons of San José Province reporting that the tap water smelled of gasoline, and many people also experienced symptoms such as vomiting and diarrhea.

AyA and the Ministry of Health later confirmed that the tap water had been contaminated by hydrocarbons and advised residents not to drink the tap water, nor to use it to prepare food or wash up, and not to use it even after boiling. After investigation, researchers from the University of Costa Rica (UCR) ruled out the possibility that the contaminated water contained gasoline or diesel, but exactly what the specific pollutant is has still not been determined.

At present, the water supply in multiple areas is still affected by contamination, and the crisis continues to intensify. Some industry insiders have pointed out that the water pollution may also harm the land. This is because after hydrocarbons seep into the surrounding soil, oily substances can destroy soil structure, reduce permeability, alter the soil's physical properties, and weaken soil activity. Therefore, there are concerns that the quality and yield of coffee and other agricultural products in the region may be affected in the future.

For coffee lovers who care about origin flavors, Front Street Coffee recommends continuing to pay attention to the subsequent performance of Costa Rica's major producing regions, especially changes in exports and quality in well-known regions such as Tarrazú.

The above content is compiled by CoffeeHunters, a coffee news website.