Coffee Smuggling On The Rise In Central America

Previously on World Coffee Press, we have highlighted the practice of coffee smuggling in Tanzania and Uganda.

Then, it was a tale of tax evasion, greed, and subterfuge. This time around, however, it is a story of the depths that some within the industry have to plunge to in order to meet contractual obligations in the face of coffee rust disease.

For the first time, there is proof that coffee from Guatemala and Honduras is finding its way across borders and into Mexico – a reversal of the trend that used to see beans head the other way in search of higher premiums.

Some of the trade is to secure more money, of that there is no doubt. But, with crops ravaged by coffee rust disease, much of the coffee is actually being sent into Mexico to allow farmers and deals to meet previously agreed commitments.

Prior to the start of this season in October, Paul Brichaux, the executive director of the Guatemalan Coffee Exporters Association, claimed that the scale of coffee smuggling from Guatemala was minimal.

Now, now, it is a different matter:

“When exporters go out to the field to buy coffee, the producers say there is none left [and] that it has gone to Mexico,” he said.

Brichaux estimates that between 500,000 and 1 million bags of coffee have been moved from Guatemala to Mexico since the start of December.

According to data released by the U.S Department of Agriculture, that could amount to anywhere between one-sixth and one-third of the country’s entire project output for the year.

It is a similar story in Honduras where 345,000 bags of coffee is believed to have been sent to Mexico.