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Economic Outlook: The Central American Market - April / May 2000

 Economic Outlook 

 Author: InfoAmericas  

 

Coffee producers face a grim year ahead as prices continue 30-40% below December, 1999 levels. Bumper crops throughout Latin America have pushed production levels ahead of demand. The Association of Coffee Producing Countries (ACPC) scrambled to put together a plan to slow the export of harvested coffee. This initiative is led by Brazil and Colombia who together control 40% of world coffee exports. Both governments have pledged to subsidize farmers who hold coffee off the market to maintain quota levels. But the plan does not include non-members Mexico, Guatemala and Vietnam, who together control 30% of world exports. Mexico's marketing system is legislated to prohibit the kind of government intervention contemplated in the ACPC plan. For Central America, low coffee prices have arrived just when foreign currency earnings are badly needed to fund the recovery from Hurricane Mitch and to cope with higher oil import costs.

 
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