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Cheaper coffee, cheaper oil

Tuesday, June 19, 2012

Slow growth and lower demand in the United States, Europe and even China, is causing a reduction in the world-market prices of several commodities, including coffee and oil, with mixed impact on Central America.

The price of Arabica coffee produced in Central America has fallen by a third so far this year. In Costa Rica and Guatemala, growers are selling future crops, out of concern that prices will fall further, according to the trading house Volcafe.

On the other hand, Arabica coffee prices are still 65 percent higher than they were five years ago.

Meanwhile, there has been a reduction of 20% since March in the price of oil, which – except for negligible production in Guatemala – must be imported into the region from abroad.

After doubling in price in the five years between last March and the same month in 2007, this is good news.