Nicaraguan Coffee Drives Export Gains

Posted by Mike Cobb on Apr 30, 2015 3:39:45 PM

Cup of Coffee

Agriculture has long been Nicaragua's top export, and Nicaraguan coffee makes up a significant percentage of those numbers. Though no longer the country's biggest industry, agriculture remains Nicaragua's largest employer and exporter. Nicaragua produces many cheeses, beef, pineapple, sugar cane, and a myriad of other crops. Of the country's agricultural exports, though, Nicaraguan coffee is certainly King.

Coffee accounts for nearly 20% of Nicaragua's exports, and that number is on the rise. The agriculture industry overall accounts for more than half of Nicaragua's exports, followed by precious metals and textiles. Gold is Nicaragua's second-largest individual export. The country's exports total around $2.8 billion, and have been growing year after year.

Nicaraguan coffee has gained an international reputation, partially due to increased tourism to the region, and one can expect coffee exports to rise. Additionally, Nicaragua and Venezuela have just signed a deal to trade coffee for crude oil. It is estimated that Venezuela will need close to 700,000 bags of coffee to make up for its shortfall, and it is already sending at least 27,000 barrels of crude oil to Nicaragua daily.

That number is in actuality probably much higher. Nicaragua gets the better end of this deal, as the coffee it is trading is mostly coffee that has been rejected from other international markets. Essentially, coffee that would have been stuck in a discounted local market is now being sold for a premium to struggling Venezuela.

Coffee FieldCoffee is not only an important cash crop in Nicaragua, but also a tradition. Coffee has been produced in the mountainous highlands of Nicaragua for over 150 years, and became Nicaragua's top crop a short twenty years after growing started. Many farmers in the region were given incentives to switch over to coffee production, and Nicaragua now boasts many large family producers, as well as smaller boutique farms.

Starbucks made news recently for offering premium Nicaraguan coffee at double the price usually charged for its other coffee offerings. This shows not only significant interest in Nicaraguan coffee beans, but also that its flavor is judged to be worth the extra price. If you can't see yourself spending $16 for a half pound of the stuff at Starbucks, visit any market in Nicaragua to pick up a bag of premium, handpicked and roasted Nicaraguan coffee for under $8.

Many Nicaraguan coffee farms offer tours and tastings, and there is even a suggested tourist route for coffee lovers, which passes through several farms in the Matagalpa and Jinotega regions of Nicaragua. Though long a coffee powerhouse, Nicaragua is seeing a renewed interest in its distinctive beans, which means the prices at Starbucks might not seem that strange in just a few years.

Learn more about visiting, investing or living in Nicaragua.

Mike Cobb

Written by Mike Cobb

In 1996, Michael K. Cobb and his business partner formed a company, Exotic Caye International, to provide loans to North Americans purchasing properties in Belize, Honduras, Costa Rica, and throughout the region. With a strong focus on consumer need, Mr. Cobb accurately predicted the growing demand for high quality, residential product for North American "baby boomer" retirees in the region. He led the group into real estate development and created a holding company called ECI Development for several properties, including a resort on Ambergris Caye, Belize. Michael speaks at dozens of international conferences annually about offshore real estate finance, development, and ownership. He was a consultant to The Oxford Club, hosted a weekly radio program, contributes regularly to overseas publications, sits on the board of several international companies, gives counsel to various real estate projects throughout Central America, and serves on the Board of Directors and the President’s Advisory Group for the National Association of Realtors, NAR.

Topics: Investing in Nicaragua