Each spring, El Salvador becomes a highlight on our calendar with a myriad of exclusive lots available from our partners and friends Diego Baraona, Andres Acosta, and Anny Ruth. We had the delightful privilege this year to fully cherish some of these relationships at the Producer & Roaster Forum El Salvador held in March. Here, we were able to literally connect the producers with roasters, solidifying these connections across the supply chain.
El Salvador’s harvest is complete for the year, with samples available and our first containers scheduled for shipment. Salvadoran producers faced similar challenges to many others throughout Central America, namely a shrinking labor force and lower prices on average for their coffee. Globally, the C Market has seen bullish movement since the end of March, while finalized numbers for coffee year 2021/22 from the International Coffee Organization show an even larger gap than anticipated between global production and consumption. Read on for a look at the recent C Market numbers, facts and figures from around the industry, and insights from the year’s harvest in El Salvador.
The World Market
March saw a steady decline in the C-market price since its high of $1.93 in late February. This decline with relatively low volatility found a bottom at $1.69 on March 30th after which it began a bullish cycle which reached a high point of $2.04 on April 18. This is the highest price in the last six months and has shown to be a critical point over the last two years; the $1.95 to $2.05 range has acted as both support and resistance on many occasions throughout the period. Currently on April 27, the market is trading just below this range at $1.88 / lb.
Global Coffee Industry Statistics
Sourced from the International Coffee Organization unless otherwise noted. Read their full March 2023 Coffee Market Report here.
- The ICO Composite Indicator Price (I-CIP) decreased by 2.7% in March 2023, averaging 170.03 US cents/lb.
- Colombian Milds and Other Milds prices decreased by 66.8% to 2.87 US cents/lb, while Robusta prices increased.
- Intra-day volatility of the I-CIP decreased by 0.6 percentage points, reaching 8.1%.
- World coffee production decreased by 1.4% to 168.5 million bags in coffee year 2021/22, expected to increase to 171.3 million bags in 2022/23.decline.
- New York certified stocks of arabica green coffee decreased 5.1% in February to 0.86 million bags. Robusta certified stocks grew 13.8% to 1.19 million bags.
- World coffee consumption increased by 4.2% to 175.6 million bags in coffee year 2021/22 and is expected to increase to 178.5 million bags in coffee year 2022/23, resulting in another year of deficit of 7.3 million bags.
Harvest in Numbers and Statistics
All statistics sourced from Consejo Salvadoreña de Café (CSC) unless otherwise noted.
Harvest season began early in El Salvador, with double the amount of coffee received in November compared to previous years. Now that the harvest is complete, 536,757 bags of 69 kg are projected as of January 31 according to Consejo Salvadoreña de Café (CSC). The price for coffee is down 13 cents/lb compared to last year, however this decrease is notably smaller than the average price drop in the C Market since the last harvest. This smaller decrease is partly due to the growth of El Salvador’s differential pricing, up from 31 cents to 58 cents this year.
As we’ve noted already in recent origin reports from Central America, Salvadoran producers are similarly feeling a labor shortage as full-time employment dropped from approximately 46,000 people last year to just 40,000 this year. More than 100,000 Salvadorans representing approximately 1.5% of the country’s population have emigrated from the country over the last three years, removing themselves from the country’s labor market directly. Indirectly however, this movement further diminishes the labor force as emigrated persons send remittances to their family members still in El Salvador. In 2021, remittances comprised 26.1% of El Salvador’s GDP, standing in contrast to the 4.4% of the country’s GDP derived from the coffee industry. These remittances sustain families, removing the need for them to take on the challenges of agricultural labor.
Scenes from visiting Diego Baraona and Los Pirineos during the Sourcing Trip Experience of Producer & Roaster Forum El Salvador
Coffee producer Diego Baraona commented on the year, noting the labor difficulties he’s felt at his farm, Los Pirineos, in Usulután, El Salvador. “It has been a very challenging harvest as we have been faced with less labor at the time of harvesting, and we have been affected by some unexpected rains in December and January,” he tells us. “But, we are very happy to remain consistent with our quality and to have obtained recognition as Best Producers of Central America at [Producer & Roaster Forum].” We’re thrilled to send a big congratulations to Diego and his team on the award!
Andres Acosta also felt the impacts of the labor crunch along with high prices for agricultural inputs, but is glad to report a good harvest nonetheless. “We had a good winter with plenty of rain, so our harvest quantity and quality were in line with last year. Fortunately no major storms developed before the harvest that could have damaged the trees, which was the case in some previous years. For the drying stage we also had excellent weather without any rain, that allowed for the coffee to dry evenly and develop the profiles we're looking for. In terms of difficulties, as many know we struggled with the increased prices of inputs. But most of all, the lack of labor. Fortunately we have a loyal group of workers that by means of increased pay and benefits stuck with us during this harvest. Currently we're preparing to export the coffee and hope that no difficulties present themselves at that time. For next harvest a bit less rain is expected for now that could affect the development, but that's yet to see.”
Scenes from a recent visit to Andres Acosta's facilities.
Abroad, the US remains the largest buyer of Salvadoran coffee by volume, purchasing 46% of the country’s total exports. The next largest buyers of the country’s crop are Germany and Belgium, representing 9% and 8.8% respectively. El Salvador’s coffee is also overwhelmingly sold as specialty grade coffee, with 70% of all coffee from the country sold as specialty last year. 18% of the country’s production was sold as conventional or commodity grade coffee, with the remaining 12% sold as inferior grades or as processed product.
Ally Coffee in El Salvador
With the harvest season finished we’re eagerly anticipating our first containers from El Salvador to depart this month, with shipments continuing through June. Samples are currently available for request, and we’re thrilled with the consistent quality delivered by our producer partners across the country.
We’re proud to have been a sponsor of this year’s Producer & Roaster Forum El Salvador, and to have announced an ongoing four event partnership with the organizers! This event offers a unique experience to connect producers to roasters at origin, including activities like the Sourcing Trip Experience during which we were able to spend time with Diego Baraona at his farm, numerous cuppings happening throughout the weekend, and wonderful educational opportunities in the show’s panels and presentations. This year, Ally Coffee Sourcing Manager Bram De Hoog gave a presentation titled Curating Green Coffee: Matching Production with Consumption, discussing part of our philosophy behind sourcing and the relationships we build between producers and roasters. You can watch the full presentation now on YouTube!
Ally team members cupping at PRF El Salvador. Clockwise from top-left: Bram De Hoog (l) and Abraham Castro (r), Nick Castellano, Bram with a view of the full table. Images courtesy of Producer & Roaster Forum.
We’ve been delighted by the great reception of Salvadoran coffees by roasters around the world in recent years. This support has allowed us to double our purchasing, enabling us to further support the family businesses we work with here. We look forward to continuing to source coffees and strengthen our partnerships with Salvadoran producers, who have repeatedly shown high quality results produced through excellent practices across their operations.