Required Report - public distribution

**Date:** 5/22/2006

**GAIN Report Number:** CS6005

CS6005

**Costa Rica**

**Coffee**

**Annual Report**

**2006**

**Approved by:**

![](media/image1.wmf)Katherine Nishiura, Agricultural Attaché

FAS San Jose

**Prepared by:**

Victor Gonzalez, Agricultural Specialist

**Report Highlights:**

Costa Rica\'s 2005/2006 coffee production is expected to decline to
1,776,000 60 kg bags, 6.8% below the 2004/2005 harvest, continuing a
downward trend in production that started in 2001. Preliminary estimates
of the 2006/2007 harvest indicate that production could increase to
1,950,000 60 kg bags.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

San Jose \[CS1\]

\[CS\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Table 1: Production, Supply and Distribution: Green Coffee
4](#table-1-production-supply-and-distribution-green-coffee)

[Production 5](#production)

[Consumption 5](#consumption)

[Trade 5](#trade)

[Table 2: Export Trade Matrix, Coffee, Green
6](#__RefHeading___Toc103766360)

# Executive Summary

Although higher international coffee prices are allowing producers to
improve maintenance of their plantations, coffee production declined
6.8% to 1,776,000 60 kg. bags (from now on bags) in 2004/2005.
Production is forecast to increase almost 10 percent in 2006/2007 since
producers have been able to provide better care to their plantations.
Nevertheless, Costa Rica is a long way from returning to the production
levels of the late 1990's, which exceeded 2.5 million bags. The number
of producers and area planted has declined, however, this trend is now
expected to stabilize as the less efficient growers have exited the
activity. Even with better prices, area planted is not expected to grow,
although fertilization and cultural practices are expected to improve,
possibly resulting in higher production in the next couple years.

# Table 1: Production, Supply and Distribution: Green Coffee

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 11%" />
<col style="width: 13%" />
<col style="width: 13%" />
<col style="width: 12%" />
<col style="width: 0%" />
<col style="width: 0%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="9"><p>Costa Rica</p>
<h1 id="coffee-green">Coffee, Green</h1></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td>2006</td>
<td>Estimate</td>
<td>2007</td>
<td>Forecast</td>
<td>UOM</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td></td>
<td>USDA Official [Old]</td>
<td><p>Post Estimate</p>
<p>[New]</p></td>
<td>USDA Official [Old]</td>
<td><p>Post Estimate</p>
<p>[New]</p></td>
<td>USDA Official [Old]</td>
<td><p>Post Estimate</p>
<p>[New]</p></td>
<td></td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>10/2004</td>
<td></td>
<td>10/2005</td>
<td></td>
<td>10/2006</td>
<td>MM/YYYY</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>107</td>
<td>107</td>
<td>107</td>
<td>103</td>
<td>0</td>
<td>100</td>
<td>(1000 HA)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>100</td>
<td>100</td>
<td>100</td>
<td>96</td>
<td>0</td>
<td>93</td>
<td>(1000 HA)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Bearing Trees</td>
<td>410</td>
<td>410</td>
<td>410</td>
<td>395</td>
<td>0</td>
<td>384</td>
<td>(MILLION TREES)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Non-Bearing Trees</td>
<td>50</td>
<td>50</td>
<td>50</td>
<td>48</td>
<td>0</td>
<td>46</td>
<td>(MILLION TREES)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>TOTAL Tree Population</td>
<td>460</td>
<td>460</td>
<td>460</td>
<td>443</td>
<td>0</td>
<td>430</td>
<td>(MILLION TREES)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>1395</td>
<td>1395</td>
<td>1459</td>
<td>1334</td>
<td>1419</td>
<td>1280</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Arabica Production</td>
<td>1910</td>
<td>1907</td>
<td>2000</td>
<td>1776</td>
<td>0</td>
<td>1950</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Robusta Production</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Other Production</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>TOTAL Production</td>
<td>1910</td>
<td>1907</td>
<td>2000</td>
<td>1776</td>
<td>0</td>
<td>1950</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Bean Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Roast &amp; Ground Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Soluble Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>TOTAL Imports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>TOTAL SUPPLY</td>
<td>3305</td>
<td>3302</td>
<td>3459</td>
<td>3110</td>
<td>1419</td>
<td>3230</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Bean Exports</td>
<td>1603</td>
<td>1603</td>
<td>1800</td>
<td>1460</td>
<td>0</td>
<td>1600</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Roast &amp; Ground Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Soluble Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>TOTAL Exports</td>
<td>1603</td>
<td>1603</td>
<td>1800</td>
<td>1460</td>
<td>0</td>
<td>1600</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>Rst,Ground Dom. Consum</td>
<td>238</td>
<td>360</td>
<td>240</td>
<td>365</td>
<td>0</td>
<td>370</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Soluble Dom. Consum.</td>
<td>5</td>
<td>5</td>
<td>0</td>
<td>5</td>
<td>0</td>
<td>5</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>TOTAL Dom. Consumption</td>
<td>243</td>
<td>365</td>
<td>240</td>
<td>370</td>
<td>0</td>
<td>375</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>1459</td>
<td>1334</td>
<td>1419</td>
<td>1280</td>
<td>0</td>
<td>1255</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td>TOTAL DISTRIBUTION</td>
<td>3305</td>
<td>3302</td>
<td>3459</td>
<td>3110</td>
<td>0</td>
<td>3230</td>
<td>(1000 60 KG BAGS)</td>
<td colspan="2"></td>
</tr>
</tbody>
</table>

# Production

Based on preliminary data from ICAFE, production declined for the sixth
year in a row to 1,776,000 bags in 2005/2006. Lower output is attributed
to the shift in production to other crops, especially during the periods
of low prices. Also, less productive areas were either abandoned or not
maintained by producers. Industry sources expect production to increase
during 2006/2007 to 1,950,000 bags, almost 10%. Area planted has been
revised to reflect new estimates indicating that roughly 7,000 ha. are
no longer used in coffee production.

# Consumption

Coffee consumption increased sharply starting in 2004/2005 reaching
365,000 bags. Consumption is expected to increase slightly during
2005/2006. The large number of Nicaraguan immigrants who are gradually
increasing their coffee consumption is believed to be one of the factors
behind the higher consumption. Another factor is the increase in tourism
over the last few years. Coffee consumption is considered to be high at
about 4.0 kg per person.

## 

# Trade

Costa Rica exported 1,602,771 bags of coffee in 2004/2005, most of which
went to the United States (50.85%) and the European Union (28.52%). The
volume of coffee exports to the United States from Costa Rica grew as
exports to other European destinations declined during the last
marketing year. Exports are expected to decline to about 1,460,000 bags
during 2005/2006 as a result of the lower production level.

Although coffee has declined to third place in terms of the export value
of agricultural products, it is still an important producer of foreign
exchange. In 2004, the export value of coffee reached \$200 million, and
in 2005 it reached \$230 million, only surpassed by bananas and
pineapples.

According to the Costa Rican Coffee Institute, on average, during the
2002/2003 to 2004/2005 marketing years, 69.5 percent of the total export
sales consisted of coffee classified as first quality coffee. Also, the
latter two crops showed an improvement in terms of first quality coffee
exported as compared to the 2002/2003 crop. Sector authorities, both
private and public, continue to stress the need to compete with a high
quality product in the international markets.

[]{#__RefHeading___Toc103766360 .anchor}Table 2: Export Trade Matrix,
Coffee, Green

+------------------------+-------------------+---------+--------------+
| **Export Trade         |                   |         |              |
| Matrix**               |                   |         |              |
|                        |                   |         |              |
| Costa Rica             |                   |         |              |
|                        |                   |         |              |
| Coffee, Green          |                   |         |              |
+------------------------+-------------------+---------+--------------+
| Time Period            | 2004/2005         | Units:  | 60kg bags    |
+------------------------+-------------------+---------+--------------+
| Exports for:           |                   |         | **1**        |
+------------------------+-------------------+---------+--------------+
| U.S.                   | 815,026           | U.S.    |              |
+------------------------+-------------------+---------+--------------+
| Others                 |                   | Others  |              |
+------------------------+-------------------+---------+--------------+
| Germany                | 230,469           |         |              |
+------------------------+-------------------+---------+--------------+
| Japan                  | 131,256           |         |              |
+------------------------+-------------------+---------+--------------+
| Italy                  | 88,978            |         |              |
+------------------------+-------------------+---------+--------------+
| Netherlands            | 71,455            |         |              |
+------------------------+-------------------+---------+--------------+
| Belgium                | 66,261            |         |              |
+------------------------+-------------------+---------+--------------+
| Canada                 | 48,087            |         |              |
+------------------------+-------------------+---------+--------------+
|                        |                   |         |              |
+------------------------+-------------------+---------+--------------+
|                        |                   |         |              |
+------------------------+-------------------+---------+--------------+
|                        |                   |         |              |
+------------------------+-------------------+---------+--------------+
|                        |                   |         |              |
+------------------------+-------------------+---------+--------------+
| Total for Others       | 636,506           |         | 0            |
+------------------------+-------------------+---------+--------------+
| Others not Listed      | 151,239           |         |              |
+------------------------+-------------------+---------+--------------+
| Grand Total            | 1,602,771         |         | 0            |
+------------------------+-------------------+---------+--------------+