Coffee producers in Costa Rica warn that a sharp drop in the dollar’s exchange rate against the colón, now below ₡480, threatens to ruin their operations. The exchange rate, set mainly by supply and demand under the Central Bank’s managed floating system, fell 4.3 percent between January and March, according to data from the Economic and Social Observatory at the National University.
The dollar lost nearly ₡22 between January 1 and March 6, far more than the 0.8 percent drop seen in the same period last year. Producers say the industry now faces a perfect storm in the 2026–2027 harvest. Officials at the Costa Rican Coffee Institute (ICAFE) point to the colón’s steady rise in value and the recent slide in global coffee prices as the main drivers cutting into profits and producer income.
After three straight years of worldwide shortages that kept prices high through 2025, the market has shifted. Arabica coffee prices on the New York exchange dropped from $440 per quintal in October 2025 to about $280 today. A record harvest expected in Brazil, the top producer, could add 61 to 76 million bags in the 2026–2027 season and push prices even lower, to between $240 and $275 per quintal.
“The problem is not just the decline on the New York exchange, but the combined effect with a historically low exchange rate,” said Marco Araya, head of economic studies at ICAFE. “Producers sell in dollars but settle in colones, and that is where they lose profitability. No level of productivity, quality, or production efficiency can offset this combination of factors that negatively affect income.”
Four years ago the exchange rate stood above ₡685 per dollar. Today it sits near ₡471, a 31 percent appreciation of the colón in less than five years. Every dollar earned now buys far fewer colones to pay local costs such as labor and inputs. The shift hits the economies of 47 rural areas that rely on coffee.
Payments to producers show the direct impact. For the current 2025–2026 harvest, with 70 percent of the crop already sold at a base price of $331 per quintal and an exchange rate of ₡470, ICAFE estimates a settlement of ₡118,627 per fanega. For the 2026–2027 harvest, with projected prices of $240 to $275 per quintal and an exchange rate around ₡450, the settlement could fall to ₡91,340 per fanega. Production costs on a typical farm yielding 20 fanegas per hectare stand at ₡107,630 per fanega.
ICAFE leaders have called the situation critical and are urging quick action from authorities on exchange-rate policy.
