Costa Rican Coffee Farmers Raise Alarm As The Dollar's Exchange Rate Against The Colón Falls – CoffeeTalk

Coffee producers in Costa Rica are expressing serious concerns regarding the value of the dollar in relation to the colón, which has now dropped below ₡480. This depreciation poses a significant threat to the sustainability of their operations, as the exchange rate fell by 4.3 percent from January to March, according to the Economic and Social Observatory at the National University. The dollar lost nearly ₡22 in this period, a sharp contrast to the mere 0.8 percent decline during the same timeframe in the previous year.

The Costa Rican Coffee Institute (ICAFE) has attributed the pressure on the coffee industry to a confluence of factors: a strengthening colón, falling global coffee prices, and the expectations of a record coffee harvest in Brazil, the world’s largest producer. Consequently, Arabica coffee prices plunged from $440 per quintal in October 2025 to approximately $280 today. This shift in market dynamics could lead to a further dip in prices for the upcoming 2026–2027 harvest, projected to be between $240 and $275 per quintal.

Marco Araya, head of economic studies at ICAFE, pointed out that the decline in New York coffee prices, coupled with the low exchange rate, severely undermines producer profitability. While producers sell their product in dollars, they must convert their earnings into colones, where they are increasingly disadvantaged. This situation underscores that no enhancements in productivity, quality, or efficiency can mitigate the combined adverse effects on income.

Notably, the exchange rate has shifted significantly over the past four years, moving from over ₡685 per dollar to around ₡471, indicating a 31 percent appreciation of the colón. As a result, each dollar earned translates to fewer colones available to cover local expenses, such as labor and agricultural inputs, which impacts the economies of 47 rural areas dependent on coffee cultivation.

The financial repercussions are evident. For the 2025–2026 harvest, with 70 percent already sold at a base price of $331 per quintal and an exchange rate of ₡470, ICAFE anticipates settlements of ₡118,627 per fanega. Projections for the 2026–2027 harvest, with expected prices lower and an exchange rate closer to ₡450, could bring settlements down to ₡91,340 per fanega. Given that production costs on a typical twenty-fanega per hectare farm are ₡107,630 per fanega, this represents a precarious financial landscape for producers.

ICAFE officials have declared the situation to be critical, calling for urgent measures from authorities to address the pressing issues surrounding exchange-rate policy.

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