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VALUE-ADDED COFFEE COULD BE KEY TO GROWTH IN HONDURAS

VALUE-ADDED COFFEE COULD BE KEY TO GROWTH IN HONDURAS



An analysis of coffee production in Honduras by the Global Coffee Platform (GCP) suggests that it has challenges in common with a number of producers in the region – not least leaf rust – but that it also faces others that are unique to country.

As highlighted on a number of occasions in C&CI, the CGP has undertaken in-depth analyses of coffee producing countries. A study of coffee farmer economics by the GCP and TechnoServe revealed ‘significant opportunities’ to increase farmer incomes.

Regarding Honduras, the GCP’s analysis suggests that there is modest potential for value addition through yield improvements. It notes that Honduras has seen an increase in production in the past several years and that there is potential to improve yields further, if certain challenges facing the sector are addressed.

Prior to the outbreak of coffee leaf rust, Honduras was on track to become a top Arabica producer. Key issues facing farmers are mitigating the risks of coffee rust and climate change, as well as improving access to finance. The GCP believes that there is limited potential for value addition in-country through improved processing.

Most of Honduran coffee is grown at altitudes of 880m above sea level or higher and is well-placed to access the specialty coffee market, but because the majority of farmers sell their coffee as wet parchment and sell to intermediaries, they are not able to capture premiums for higher quality.

The GCP says Honduran farmers receive 75 per cent of the FOB price. By selling in dry parchment and/or selling directly to exporters, farmers are able to capture a greater share of the margin. Intermediaries also play a significant role in the supply chain, so improving the supply chain can result in more reliable and improved quality.

“By drying coffee on farm and selling as dry parchment, potentially directly to exporters, farmers will be able to capture a greater share of the margin,” said the GCP. Some farmers sell cherry and, although less common, some farmers also sell dry parchment, by drying on farm or in their communities. Another issue that needs to be addressed is that intermediaries often mix various batches of wet parchment during processing, which may harm quality.

For more information see the forthcoming November 2017 issue of Coffee & Cocoa International.

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