Costa Rican companies had warned on several occasions that keeping the dollar so low was causing many economic problems. They emphasized that without action, employment generation would be seriously affected, and many companies would have to discontinue operations. Due to the government’s decision to maintain an exchange rate detrimental to the productive sector, there are companies that could no longer sustain their economic activities.
AquaFoods, a significant Costa Rican fish exporter, informed that its export activity will stop indefinitely. “This decision is based on the loss of competitiveness that we have experienced as a company, mainly affected by unfavorable exchange rate fluctuations and operational difficulties in exporting,” the statement said.
In the letter, the company thanks its suppliers for the more than 30 years of commercial relationship and informs them that it will fulfill all the commitments acquired to date.
The company exported snapper and tilapia from Costa Rica. It also marketed other species that fall into the “Wild Catch” category and had four physical stores where it offered its products in the country.
This is not the first Costa Rican company is forced to end operations due to the exchange rate effect. MyM Productores S.A., an ornamental plant producer and sugar cane processor located in Palmares de Alajuela, will cease operations as of the second half of May.
The company, operating for 35 years, stated in its closure announcement that the cost of producing the flowers and plants is “impossible to compensate with the economic conditions currently prevailing in Costa Rica, where the exchange rate fell 28% between June 2022 and March 2024.”
In February 2024, the banana producer Standard Fruit Company (Dole) also announced the dismissal of 111 workers. This followed the closure of the Roxana and Parismina farms in Guápiles de Limón.
Following the closure of the farms, Standard Fruit Company (Dole) announced the dismissal of 111 workers, a response to the financial complications caused by the behavior of the dollar exchange rate in agro-export companies.
On Thursday, representatives of more than 13 business chambers of Costa Rica met at a press conference to explain the situation they are facing, given the government’s decisions regarding the exchange rate.
Employers warn that if this continues, more layoffs will follow, and more companies will be forced to close. The economic impact that the country could suffer from the closure of companies would be devastating. The government must change course before it is too late.
