Two months after the completion of the coffee harvest 2023-2024 the volume of exports of the so-called gold grain recorded a reduction of 534,857 quintals and revenues a decrease of 123.78 million dollars
Two months after the official conclusion of the coffee harvest 2023-2024 and while in the countryside there is uncertainty about the effects that will have in the next production cycle the lack of attention that many plantations faced this year, the export of the production of the harvest that is about to be completed faces one of its worst cycles. The volume of grain shipments to the external market shows a 19 per cent drop, which, despite the improvement in price, led to a 22 per cent reduction in revenue from the previous cycle.
In addition, since December last year when Mercon Coffee Group, the main exporter of grain, took advantage of Chapter 11 of the U.S. Bankruptcy Act and then the Ortega Murillo regime alleging a debt of $30 million confiscated its subsidiaries in Nicaragua, Nicaragua’s Nicaragua’s Nicaraguan Window of Foreign Trade (Vucen), formerly Cetrex, did not reissue the monthly public reports of the export of the so-called gold grain.
Now, there are only the general foreign trade reports of the Central Bank of Nicaragua (BCN), which only provide specific details of the twenty most important products of the country’s export basket. Fortunately coffee has always been among the three most important and thanks to that you have information about the behavior of its sales in the external market.
Nicaragua sent less coffee abroad
The 2023-2024 harvest officially began on October 1 last year and ends on September 30 of this year. According to the reports of the NCB between October 1 of last year and July 31 of this year, that is, in ten of the twelve months of the cycle, Nicaragua sent abroad 2.33 million quintals of the so-called gold grain.
Over the last seven harvests, this is the lowest volume that was placed on the external market in the reference months. In addition, it represents a decrease of 534,857 quintals compared to the 2.86 million quintals that were exported in the same months of the previous harvest.
This decrease impacted on the amount of revenue generated by these sales. In the reference months of the cycle to be completed, coffee exports generated $445.28 million, lower at $123.78 million from $569.06 million earned for these sales in the same months of the previous harvest.
Coffee growers receive $123 million less
This reduction of more than half a million quintals in volume and more than $120 million in revenue, according to some producers who fear reprisals avoid identifying themselves, reflects the damage that temperature and rainy season instability caused in plantations last year, but also the problems faced by some producers to cut the harvest due to lack of financing and then to send it to the international market.
After ceased operations when it was confiscated by the Ortega Murillo regime, the clients of Cisa Exportadora, about six thousand large and medium producers, ran out of financing to cut the harvest and then faced difficulties in fulfilling their contracts abroad, since the intermediary with the buyer was Cisa.
This made it difficult to export part of the production, since in each cycle this company collected, processed and sent abroad at least half of each harvest.
Exports go back several years
With only the August and September export reports missing, representatives of the sector predict that the volume of exports could be below 3 million quintals, i.e. the sector would fall back to pre-cycle 2017-20178 levels when for the first time the barrier of 3 million quintals was exceeded.
It would also be far from the $700 million in revenue reached in the 2021-2022 cycle when grain exports exceeded 3.4 million quintals.
According to the producers consulted, the most serious thing is that the 2024-2025 harvest, which begins on 1 October, could continue to fall back. The impact would continue to grow because the uncertainty caused in the sector by the confiscation of Cisa, the closure of virtually all coffee associations in the country and the confiscation of their property were added.
It will also impact production, which due to the uncertainty facing the sector, this year most producers did not give adequate management to the plantations. And now, we don’t even have to consult who to ask what we can do, says one of the producers consulted.
This article has been translated after first appearing in La PrensaNi