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Nicaragua Coffee Exports As of July High Enough In Spite of New Taxes

By: Diana Delgado, Contractor

 

Nicaragua Coffee Exports As of July High Enough In Spite of New Taxes

Bogota ( Coffee Network )- Nicaragua exported 2.33 million bags of 60-kg in the coffee year October 2019-July 30. 2020, according to the government’s center of exports Cetrex. Those coffee exports brought in $413.9 million.

Nicaragua exported 2.584 million bags ( 3.4 million quintals) in the previous coffee year, which means Nicaragua is on track to meet the target taking into consideration that available government figures are as of July.

Of the total shipped, 1.507 million bags were coffee grown at strictly high altitude coffee, 425,065 bags were strictly hard beans, 196,655 bags were green beans with some types of imperfection, 60,153 were shipments of natural Robusta and 3,559 bags of washed Robusta, according to Cetrex figures

Nicaragua’s coffee exports stand out bearing in mind that the government of Daniel Ortega increased taxes across the board, reducing the cashflow available for coffee plantations. Value Added Prices (VAT) were slapped to all basic food products. VAT stands at 15% since last year. For instance, the process to dry coffee now pays a 15% VAT tax, when it was previously exempted. As a result, the US Agricultural Department has said coffee growers face a 10% increase in agrochemical costs.

Nicaragua’s coffee exports will also beat the target set by the Nicaragua’s coffee exporters association, which last year told Coffee Network that exports were going to be around 2.28 million bags of 60kg ( 3 million quintals of 46kg ) in the coffee year ending in September 2020.

It is important to highlight that the government does not report frequently exports of coffee and some analysts consider those figures as bias. 

But according to the US Agricultural Department, production is not expected to grow in the coffee year that ended yesterday. The lack of access to credit due to Nicaragua’s current political crisis and low international coffee prices have reduced Nicaraguan producers' ability to properly maintain coffee plantations. Harsh economic conditions have led to a sharp reduction in coffee production. The Nicaraguan coffee industry reports marketing year 2019/2020 production reaching 2.3 million 60-kilogram (KG) bags, down 11% from the previous year. For 2020/2021, coffee associations project an additional 5% decline. Producers do not anticipate improvements in access to credit.

Coffee is produced mainly in the North Central Region of Nicaragua with a range of altitudes from 365 to 1,500 meters above sea level. According to the most recent agricultural census, 87 percent of the coffee plantations are located in the North Central Region of the country, in the cities of Jinotega, Matagalpa and Nueva Segovia. Thirteen percent of the plantations are located in other municipalities. There are approximately 140,000 hectares planted with coffee.

Writing by Diana Delgado

  • Coffee

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