El Salvador, Where Bourbon Grows on Trees

Posted by Mike Phillips
Posted in El Salvador

El Salvador’s coffee industry was recently crushed by a crop disease just a few years ago. Now, in order to catch up and compete globally, coffee farmers are turning to increasingly exotic bean varieties. Will the strategy pay off? In Reuters:

The global dollar-denominated benchmark coffee price for commercial grades of arabica beans, known as the “C” market KCc1, has hovered around $1.20 per pound the past year.

That is about the same actual price that the coffee garnered in the 1980s, and is close to the cost of production in some mountainous countries such as El Salvador. The cost of production is higher on steep hillsides, where crops must be harvested by hand.

But specialty beans can cover those costs, plus some, given the premium they carry to standard varieties. Farmers said their specialty beans can fetch around $3.50 per lb, a premium of more than $2 over the current “C” price.

Selling against the “C” market is akin to putting money “in a bag with a hole,” said Gilberto Baraona, whose family has farmed coffee in El Salvador for four generations.

Baraona, who lost 75 percent of his farm to roya, now farms bourbon and pacamara trees at higher elevations, where the combination of warm days and cool nights lessens the risk of disease and creates some of the highest quality beans. Baraona’s specialty coffee export business has doubled in annual sales since 2010, he said.

“You can live with pacamara and bourbon if you have a system to combat disease,” he said.

Read the full article here.

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