Despite its high quality, Ecuadorian coffee exports continue to decline during the pandemic

Jun 11, 2021 | 3 comments

By Robert Bradley

The production and export of coffee in Ecuador continues its drastic decline, particularly in coastal regions. However, production per hectare is growing.

Ecuador coffee production and exports have declined in recent years, partly as a result of the Covid-19 pandemic.

The export of soluble, or “instant” coffee, represents 95 percent of total exports. Exports of specialty coffee beans continue to increase due to changes in crop management and marketing strategies, experts say. The current challenge, in the midst of the Covid-19 pandemic, is the ability to harvest the expected volumes.

Since 2013, coffee bean exports have decreased by 88 percent and soluble coffee exports have decreased 50 percent. Low field productivity, 80 percent less than in other Latin American countries, and high processing costs have made Ecuador less competitive compared to neighboring countries. This despite the fact that the country is recognized for producing some of the highest quality coffee in world.

Coffee production for the marketing year 2020 – 2021 is forecast to be 255,000 bags (60 kilograms each), down five percent from the previous year. Productivity per hectare is increasing, resulting in an average 16 percent increase in national production, due to government efforts to renew and rejuvenate plantations and improve field management. However, the overall planted area is decreasing.

The increased production is made up of mainly Arabica coffee, although the prices of both Arabica and Robusta continue to trend downward with the exception of specialty Arabica coffees for which prices have doubled, compared to that sold in bulk. Consumption in Ecuador is forecast at 240,000 bags down from the previous year’s estimate. This is due to the reduction in consumption caused by Covid-19. Prior to the pandemic, Ecuadorians had, in general, increased their consumption in recent years.

Picking coffee beans is labor intensive since most of it is done by hand.

Ecuadorian coffee exports for 2021 are forecast at 500,000 bags, up 10 percent from the 2020 estimate. Industrialized coffee exports are on the rise, and coffee beans now represent only 5% of total coffee exports.

Meanwhile, the 2021 forecast for coffee imports, primarily from Colombia and Brazil, is 300,000 bags, a reduction from the 2020 estimate.

Ecuador’s soluble coffee manufacturers have the capacity to process more than one million bags per year. This industry has state-of-the-art “freeze-dry” facilities. When Ecuador’s coffee-growing sector lost competitiveness due to the entrance of new producing countries, domestic production was replaced with imported beans from Vietnam.

In the last three to five years, Ecuador’s competitiveness in processing imported coffee has also vanished. The lack of competitiveness in the production of industrialized coffee is related to prohibitively high costs of electricity and water in Guayaquil, high transportation costs between Manta and Guayaquil, and overall high wages compared to neighboring countries.

Overall, Ecuador’s coffee sector is a mix of domestic bean production and the processing of imported beans for the soluble industry. Coffee is largely handpicked. There is limited use of fertilizers. The reason for this was that good weather conditions in 2018 improved the orchards.

The use of modern irrigation systems is limited as well. Lack of water is the second biggest problem in coffee production while land tenure is another. The majority of coffee in Ecuador is produced on smallholder farms, with 62 percent of farmers owning one hectare or less, 33 percent between one to five hectares, and five percent of farmers owning more than five hectares.

Subscribe to our newsletter

Cuenca High Life offers on-line publications, local translated news, and reports about the expat life and living in Ecuador. 

You have Successfully Subscribed!

Subscribe to our newsletter

Join our mailing list to receive the latest news and updates from Ecuador.

You have Successfully Subscribed!

Subscribe to our Newsletter

Subscribe to our Newsletter

CuencaHighLife publishes Ecuador news daily. Subscribing will guarentee that you never miss the most important news.

You have Successfully Subscribed!