Costa Rica is expecting the lowest crop volume in 40 years. Crop 17/18 was pegged at two million 46 kg bags. For crop 18/19 ICAFE has a forecast of 1.765 million bags but most people in the industry believe that is too high. The private companies have a forecast of 1.65 million bags. This is around 20% lower year over year. I believe the actual number will be even lower, at least for exportable crop, due to the lack of rain last year in key SHB regions which means the beans do not fully develop. Costa Rica is currently one of the strongest seller’s market in the world. Not only does the country sell out every year, but large specialty coffee buyers are coming back more and more aggressively each year to buy SHB. Costa Rica is a unique coffee origin and hard to substitute.
Costa Rica differentials have remained very high with a low C market and that will not change since it is a seller’s market. This year we have a combination of high differentials, a low crop volume, and a decreasing C market. Due to these factors diffs have kept rising. The quality looks good so far. Rains were not great last year and since coffee trees need water to absorb fertilizer we were a little concerned. But fortunately the cup results have been very positive. Our coffee plantations look in outstanding conditions for the next crop (19/20) .