Why did El Salvador's coffee producing nations exports drop so sharply?
El Salvador's coffee bean exports fell 46.9% in volume and 50.2% in value during the first four months of the 2023/24 harvest season, from October 2023 to January 2024, according to the Salvadoran Coffee Institute. Production reached only 35,000 tons, down 2,560 tons year on year, which growers link to drought and heavy rain tied to El Niño.
The United States buys 47% of those exports, with Italy at 10%, and Saudi Arabia and Belgium at 8% each. Coffee beans production for the season was also hurt by lower futures prices and labor shortages. Shipments to China are rising, and 13 trading companies have registered there, giving producers a possible new outlet.
Affected by a combination of factors including extreme weather, falling coffee futures prices, and labor shortages, El Salvador's coffee bean exports and export value both suffered significant declines in the first four months of the 2023/24 harvest season. According to a report from the Salvadoran Coffee Institute, export volume fell by nearly 47% year-on-year, export value dropped by over 50%, and in January alone, export value plummeted by more than 90%. The United States remains the largest buyer, but Italy, Saudi Arabia, and other countries follow closely behind in share. The decline in production is directly linked to drought and extreme rainfall caused by the El Niño phenomenon. Meanwhile, El Salvador's coffee exports to China are on the rise, with 13 trading companies having completed registration in China, and the industry is optimistic about the potential of the Chinese market. Front Street Coffee continues to follow developments in the producing regions, bringing front-line information to enthusiasts.
Recently, a report released by the Salvadoran Coffee Institute (ISC) pointed out that in the first four months of the 2023/24 coffee harvest season, namely from October 2023 to January 2024, the country's coffee bean export volume and export value both experienced significant declines.
Data from the report shows that during these four months, Salvadoran coffee growers exported a total of 2,245 tons of coffee beans, a decrease of 46.9% compared with the same period of the 2022/23 harvest season; total export value was US$9.8 million, down 50.2% year-on-year. Of particular note, in January 2024 alone, El Salvador's coffee bean export value was only US$668,300, a year-on-year drop of as much as 91.3%.
In terms of export destinations, the United States is the largest buyer of Salvadoran coffee beans, accounting for 47% of total exports; Italy ranks second with 10%; Saudi Arabia and Belgium each account for 8%; the Dominican Republic, Germany, and Canada also hold certain shares.
Salvadoran coffee growers and producers attribute the export decline to reduced production. ISC data shows that in the first four months of this season, coffee bean production was only 35,000 tons, a decrease of 2,560 tons compared with the same period last season. The Salvadoran Coffee Growers Association (ACAFESAL) previously predicted that coffee bean production in the 2023/24 harvest season would be 37,500 tons, a figure lower than in previous years. The main reason lies in the impact of extreme weather. One report pointed out that El Salvador ranks 28th among the countries most vulnerable to climate change globally, with the effects of climate change concentrated mainly in infrastructure and agriculture. In July and August last year, the country experienced drought caused by the El Niño phenomenon, and then encountered extreme rainfall at the end of winter. These climate events led to reduced yields of major crops such as sugarcane, rice, corn, and coffee beans.
The president of the Salvadoran Coffee Cooperative Federation recently expressed concern about El Niño's impact on the current harvest season. Although the coffee bean picking period (usually from October to May of the following year) has been delayed, 70% of coffee plantations have already completed harvesting, and production is expected to decline further in the future. In addition, sluggish coffee futures prices on the New York Stock Exchange have weakened enthusiasm in the coffee industry, and some growers have even sold coffee estates, which have been converted for tourism development. At the same time, labor shortages have become increasingly prominent.
However, there are also positive signs showing that El Salvador's coffee exports to China are on an upward trend, and many coffee industry practitioners are optimistic about the Chinese market. Although China has not yet entered the top five destinations for Salvadoran coffee exports, local traders recognize the potential of the Chinese market. At present, 13 Salvadoran coffee trading companies have completed registration with China Customs, and the industry believes that in the future, through recovery in cultivation, El Salvador's coffee industry is expected to revive.
The above content is compiled by CoffeeHunters, a coffee news website.
