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HomeCoffeeCosta Rica Coffee Growers Struggle with Exchange Rate Policy Effects

Costa Rica Coffee Growers Struggle with Exchange Rate Policy Effects

Costa Rica’s coffee growers deal with tough times from a low exchange rate that cuts into their earnings, even as global coffee prices hit peaks not seen in decades. Producers in nearby countries cash in on the boom, but locals face falling incomes and shrinking farms.

The Costa Rican Coffee Institute, known as ICAFE, reports that 26,653 families rely on coffee production. Small growers make up 87% of them, and they feel the pinch most from the Central Bank’s exchange rate policy started in 2023.

One local producer said coffee reaches international prices last seen in the 1970s, when Brazil’s frosts drove costs up. Bags of 46 kilograms sold for as much as $400 recently, and they hold steady between $370 and $380. But in Costa Rica, the payout to growers stays below levels from the 2021-2022 harvest.

Back then, growers got an average of ¢132,445 per fanega, based on $260.19 per bag and an exchange rate of ¢649.59 per dollar. Today, the dollar trades around ¢502.57, with bank buy rates at ¢501 to ¢505 and sell rates at ¢510 to ¢515. For the 2024-2025 harvest, ICAFE data shows an average international price of $302.78 per bag as of August 22, leading to an estimated ¢118,398 per fanega.

Marco Antonio Araya, an agricultural economist at ICAFE’s Economic and Market Studies Unit, pointed out that the policy hurts exporters. He compared Costa Rica to Brazil and Colombia, where growers gain from better exchange terms. The strong colón has cut revenues by nearly 20% since the 2022-2023 season.

Growers with yields of 18 fanegas per hectare see costs at ¢112,159, while those at 23 fanegas pay ¢94,433—often more than they earn. This pushes some to sell land. Coffee fields have shrunk from 92,000 hectares to 82,539, and producing cantons dropped from 52 to 47. Family producers fell from about 26,600 to 24,600.

Harvest volumes stay at 1.7 million fanegas, short of the 2 million goal. Production for 2025-2026 is forecast to drop 10% to 1.17 million 60-kilogram bags. Weather adds pain: rains caused losses of 200,000 fanegas in the current harvest, worth about $45 million. Climate changes led to ¢23,000 million in damages last year.

Global prices for arabica futures stand at around 385 cents per pound, or about $3.85 per pound, as of early September. That translates to roughly $390 per 46-kilogram bag. Prices fell 11.8% in July but rebounded. Earlier in 2025, exports averaged $465.65 per 60-kilogram bag through April, up 52% from before.

To ease the strain, ICAFE teamed up with Banco Nacional in January for a preferential exchange rate, paying up to ¢5 more per dollar to producers. This helps boost final payouts. Still, labor shortages and high costs persist.

Exports totaled $456 million in 2023, mainly to the US, Switzerland, and Germany. World production for 2025-2026 rises by 4.3 million bags, but Costa Rica sees a small dip.

Producers in Honduras benefit from a weaker currency, getting more local cash for the same dollars. Here, the low rate threatens the whole export chain. As one economist noted, it creates a big disadvantage against top producers in the Americas.

Growers hope for policy shifts to match neighbors. For now, they push through uncertainty, with farms at risk and families feeling the squeeze.

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