The 2015/2016 coffee harvest is expected to reach over 1,879,000 60kg bags, down 13 percent from the initial forecast, according the latest report from the United States Department of Agriculture (USDA) Foreign Agriculture Service (FAS).
The harvest was not as good as initially expected due to El Niño, a cyclical weather phenomenon, which brought rising temperatures and lack of rain throughout Central America and other Latin American countries.
Some coffee farmers located in the low lands of the Pacific coast reported the falling of small fruits and reduced yields as a result of the drought. In addition to lower yields, in some areas, farmers also reported light weight unroasted coffee beans.
However, this was not a general trend for the entire country and the 2015/2016 harvest was not considered a bad one; the impact of El Niño was much less on the mountainous region of Nicaragua, where most of Nicaragua’s coffee plantations are located, due its microclimate condition that guaranteed a more normal rainfall.
In terms of fungal disease and pest outbreaks, different coffee associations described the 2015/2016 cycle as normal with no significant problems with pests or fungal diseases.
The Nicaraguan Coffee Council (CONACAFE) estimated that the level of coffee rust was below five percent which is considered normal. For 2016/2017, the coffee harvest is expected to reach over 2.02 million 60kg bags, an 8 percent increase compared to the current harvest, assuming good weather conditions.
According to the Nicaraguan Ministry of Agriculture, the total cultivated area in Nicaragua is close to 126 thousand hectares out of which 95 percent are being harvested.
Most of Nicaragua’s coffee production is Arabica and there is a small production of Robusta coffee (Around 1,600 hectares planted) for the domestic market.
Among the common varieties are Caturra (72 percent) and Borbons, Paca, Catuai, Catimore, Maragogype and Pacamara (28 percent). Coffee is produced mainly in the North Central Region of Nicaragua.
According to the last Nicaraguan Agricultural Census in 2011, 35 percent of the coffee plantations are located in Jinotega, 28 percent in Matagalpa, 24 percent in Las Segovias and 13 percent in other municipalities.
The coffee plantations in the North Central Region are located in areas with a range of 365 and 1500 mts above sea level, in las Segovias between 490 and 1550 meters and on the Pacific between 420 and 933 mts.
Even though Nicaragua has a long history in the production of coffee, the level of consumption is not as high as other countries in the region. “Nicaraguans have a culture of producing coffee but not a culture of consuming coffee” Maussie Kühl, Co-Owner of Selva Negra Estate Coffee Farm, 27 March 2006.
The average per capita consumption is close to 2 kg. Aside from a low cultural preference for drinking coffee, Nicaraguan consumers do not purchase the more expensive types of coffee. Most of the coffee consumed in Nicaragua is not suitable for export.
Nicaragua has two main laws that regulate coffee production: Ley del Café (368) or the coffee law published in December 2000.
This law provides a series of fiscal exonerations to coffee producers on investments related to coffee production.
The organization in charge of the implementation of this law is the Nicaraguan Coffee Council (CONACAFE). The second law, Ley para la Transformación y Desarrollo de la Caficultura (Law 853), was passed in December 2013.
This law intends to renovate and transform the Nicaraguan coffee sector through the creation of a fund that will be used to renovate the old coffee plantations.
Farmers will pay a small fee per each bag exported that will vary between US $1 to 4 based on the international prices of coffee. Farmers will pay $1 when the coffee price is close to $140, $2 when the price is between $140, $3 when the price is between $165 and $4 when the price is above $185.
The National Commission for the Transformation and Development of the Coffee Sector (CONATRADEC), which is formed by members of the Government of Nicaragua, coffee producers and exporters, will be in charge of administering the fund.