San Jose, Costa Rica, Nov. 18 - A farm worker shortage, debts, a lack of financing and the high costs of fertilizers are preventing Central America from expanding its coffee production despite high world bean prices, exporters say.
Unlike in coffee-producing Indonesia and Vietnam, growers are not returning to farms abandoned during a global coffee price crisis between late 2001 and 2003, and farm hands are emigrating to the United States, many illegally, for higher-paying work.
"I don't see people planting coffee, taking over new areas and planting trees," Carlos Borgonovo, president of El Salvador's coffee processors' and exporters' association, said at a coffee conference this weekend in Costa Rica.
World Arabia coffee prices are around $1.30 a pound, compared with 42-cents a pound at the height of the coffee crisis, when global oversupply forced coffee prices to below production costs.
Specialty, or gourmet, Central American Arabia coffees can sell for double the New York-market price and as coffee consumption grows in tea-drinking Asia, Central American coffee officials worry the region will miss out on a lucrative market.
Over the past five years, labor costs in El Salvador have risen 75 percent and fertilizer costs by 53 percent, while the industry has more than $200 million in debts, Borgonovo said.
In Guatemala, the low altitude, quality coffee that suffered in the price slump has yet to recover.
"The coffee crisis affected first and foremost lowland coffee. The prime and extra prime (quality coffees) have been disappearing and I doubt that they will return," said Thomas Nottebohm, president of Guatemala's coffee exporters' association.
Across Central America, the pool of poor coffee pickers that harvest the crop by hand is dwindling as many seek a better life in the United States, pushing up wages for those willing to pick.
Nicaragua, the region's poorest country, now pays pickers as much as farmers in El Salvador and Costa Rica, said Jose Angel Buitrago, president of the Nicaraguan coffee exporters' association. That has raised production costs in Nicaragua to more than 80 cents per pound, a 50-percent increase in three years, he said.
UNITED STATES BECKONS
"The problem at harvest time is due to emigration," Buitrago said. "People go to other countries in search of the opportunities they do not have in Nicaragua."
There is also little financing available for improvements in fields and for new plantings. When the price crisis began, many banks in the region called in loans, leaving exporters and processors as the only source of financing available to farmers.
But high prices today mean coffee financiers are eager to collect on past arrears rather than issue new loans.
Only Honduras, a producer mainly of mid-range qualities, appears to be benefiting from stronger prices and the government has launched an aggressive plan to expand production through increased productivity and new plantings.
Christian LeSage, president of Honduras' coffee exporters' association, said the country was able to profitably sell coffee, even when prices were at record lows, and now manages to keep production costs at between 67 cents and 79 cents per pound.