Tegucigalpa, Mar. 19 - Honduras, Central America's second biggest coffee producer, which has never had a reputation for growing expensive gourmet beans like neighboring Guatemala or Costa Rica, is now aiming for an image change.
Honduras, forecast to export 3.6 million 60-kg bags of coffee this 2008/09 season, is increasing the amount of organic and certified coffee it produces in an effort to fetch premium prices.
While still a small fraction of total country exports, Honduras expects to sell abroad some 345,000 60-kg bags of differentiated coffee in 2008/09, officials at the national coffee institute said.
That would be 72 percent more specialty production compared with just two years ago and nearly seven times the amount exported in 2004/05.
"This is a gradual process, but ... it will allow us to be less affected by the low price cycles and improve our earnings," the institute's technical manager Mario Ordonez told Reuters.
Honduran coffee is most often used in blends and is punished by traders for its low-quality wrap, usually receiving prices well below market rates, the institute said.
Farms checked by inspectors for compliance with strict environmental and labor standards can receive a seal of approval from organizations like the Rainforest Alliance or Utz Kapeh, which guarantees higher prices for producers.
The goal is to have 20 percent of the crop sold as specialized varieties by 2009/10, said Dagoberto Suazo, who heads a major umbrella group for coffee cooperatives.
CRISIS WORRIES
Worries that gourmet coffee consumption will fall as consumers have less money to spend on luxury goods due to the financial crisis has not deterred Honduran coffee farmers, who say even a small premium above lower prices is worth it.
Coffee prices have fallen from a high of nearly $1.80 per pound in February of last year to around $1.13 today as money was pulled out of commodities amid the global market turmoil.
"Our buyers have said that sales of organic (coffee) will go down because of the economic crisis, since people are going to buy what's cheapest," said Nelson Paz, who manages a cooperative of small organic producers in the lush coffee growing region near the border with Guatemala.
But lower consumption of pricey espresso drinks in upscale coffee shops could mean an increase in home brews, where buyers might still be willing to pay more for a certified or organic varieties.
"We are going to keep producing organic and expanding our certifications because in the long run these (coffees) will always have a higher price than generic products," Paz said.