Infobyte·10 min·September 2026

Honduran coffee: an economic pillar subject to global volatility

Coffee — one of the most important products for the Honduran economy — has one of the most volatile prices in the world. Between 2012 and 2013, Honduran coffee export revenues fell from $1.4 billion to $750 million — a decline of nearly half in twelve months, with roughly the same number of farms operating. The 2025 boom was the flip side of the same cycle: the average international price climbed to an all-time high of $3.83/lb — 50% higher than a year earlier — and exports reached a record $2.3 billion, while export volume grew by barely 8%. How can Honduras better navigate this volatility? This Infobyte is a first effort to answer that question more broadly.

Emilson Juanez — Sendas Think Tank

Translated from Spanish with AI assistance and reviewed by our editors. See a translation error? Email us.

Coffee is a pillar of the Honduran economy… and also a source of vulnerability

Coffee is Honduras’s leading general merchandise exportFootnote 1^[1] and also occupies more land than any other export crop. In 2023, the land area dedicated to coffee exceeded that of bananas and African palm combinedFootnote 2^[2] (Figure 1).
In export revenues, its share is even greater. In 2025, coffee generated $2.3 billion — nearly three times the combined value of banana and African palm oil exports ($867 million) — and its share of general merchandise exports surged from 22% to 35% in a single year (Figure 2).
Coffee accounts for 4.7% of GDP (BCH, 2023) and 24% of agricultural GDP. In addition, coffee farming is the main source of rural employment: it involves more than 100,000 producer families distributed across 15 of the country's 18 departments.
Honduras accounts for 3% of global production (USDA, 2025), making it a price taker in the international market. This dependence on externally determined prices is a structural source of vulnerability for the sector.

Figure 1

Figure 2

In 2025 the sector experienced a price-led boom

The international price of Arabica — the species on which Honduras focuses its production — captures this asymmetry clearly. From its most recent low of $1.21/lb in May 2019, the price climbed to an all-time high of $4.10/lb in February 2025; after a mid-year correction, it returned to $4.10/lb in November and has since fallen (Figure 3).
The 2025 export record was a story of pricesFootnote 3^[3]. Over the past decade, export volume has fluctuated within a relatively narrow range and has yet to recover its 2017 peak; in 2025 it remained one-third below that high. Of the additional $1.1 billion generated by coffee compared with 2024, five out of every six dollars came from the rise in the price received per bag (+77%); export volume, which grew 8%, accounted for the rest (Figure 4).
The boom has held up in 2026, but is losing momentum each month. The price received per bag has fallen, though it remains nearly double the average of the past decade, while export volume has rebounded to its highest level since 2019Footnote 4^[4]. That combination kept first-half export value barely above that of 2025.
Markets expect prices to continue falling in the coming months. Record global production is projected for 2026/27 (USDA, 2026) as Brazil's Arabica harvest rebounds, pointing to a global surplus in the next crop cycle (ICO, 2026). This outlook implies continued downward pressure on coffee prices (World Bank, 2026).

Figure 3

Figure 4

Volatility is a feature of the global coffee market

The annualized price volatility of Arabica (25%) is more than twice the agricultural average (9%) and exceeds that of commodities overall (14%)Footnote 5^[5]. Among Honduras’s main export crops, coffee is one of the most exposed to sharp price swings (Figure 5).
This volatility feeds directly into the incomes of 100,000 Honduran coffee-producing families. A commodity whose price can change 20% in just a few months makes it difficult to plan household budgets, sustain medium-term investment, and plan the renovation of coffee plantations.
The 2012–2013 episode noted in the introduction is not an isolated case: the historical time series (Figure 2) shows several similar sharp rises and falls over the past two decades.
That exposure falls most heavily on small farms. Of all producers registered with IHCAFE for the 2024/25 harvest, roughly 93% are smallholders: they cultivate an average of about 2 hectares and together account for 55% of the national harvest. Many of these producers operate with limited access to credit or are already indebted, constraining investment in coffee plantation maintenance (USDA, 2026) and with it their ability to cope with external shocks.

Commercial coffee comes almost entirely from two species of the genus Coffea: Arabica (Coffea arabica) and Robusta (Coffea canephora). Arabica accounts for roughly 60% of global production and Robusta for the remaining 40%, but the differences between them extend far beyond volume: they have distinct agronomic requirements, sensory profiles, and benchmark exchanges.

Arabica requires higher altitudes, cool temperatures, and more careful management; it yields higher-value coffee, but is vulnerable to coffee rust and heatwaves made more frequent by climate change. Robusta tolerates warm, low-altitude climates, resists pests more effectively, and produces higher yields per hectare, though its cup quality is less refined and its price is lower. Because of this hardiness, global demand for Robusta has been gaining ground relative to Arabica.

Honduran production is virtually all Arabica; Robusta production is not permitted. This places the country in the highest-value segment of the global market and under the benchmark of the New York “C” ContractFootnote 6^[6], but it also leaves it fully exposed to the species' two structural vulnerabilities: international price volatility and growing climate pressures on coffee-growing regions.

Table 1

Criterion	Arabica	Robusta
Optimal altitude	700–2,200 masl	0–900 masl
Ideal temperature	16–24 °C	21–30 °C
Caffeine content	0.8–1.6%	1.5–2.5%
Pest and disease resistance	Low; sensitive to climate change	High
Cup profile	Sweet, aromatic, with acidity	Intense and full-bodied, sometimes harsh
Major producing regions	Central America, South America, and East Africa	Vietnam, Southeast Asia, Brazil, Central and West Africa

Figure 5

Producing more efficiently is the intuitive answer for sustainability; the data suggests Honduras is already doing so

Faced with volatility, the intuitive response is to produce more with the same resources to soften the impact of lower prices. Averaging 25.4 quintals per hectare (QQ/ha) over 2019–2024, Honduras is the second-highest-yielding Arabica producer among the world's ten largest — outperforming Colombia (+32%), Peru (+39%), and Guatemala (+71%) (Figure 6). Only Vietnam and Brazil achieve higher yields, but they produce almost exclusively Robusta (Vietnam) or a large share of their production is mechanized (Brazil).
A relatively strong aggregate yield does not mean there is no room for improvement; several departments lag far behind. In Olancho, Francisco Morazán, and El Paraíso — which accounted for 17% of national production and 23,376 producers — yields were between 21% and 41% below the national average in the 2022–2023 harvestFootnote 7^[7].
A study of 659 Honduran producers estimates that they operate at 50%–60% of their efficiency frontier, meaning they could produce 40%–50% more with the same inputs (Navichoc et al., 2024).

Official figures place Honduras among the world's most productive Arabica producers, with an aggregate yield between 21.7 and 26.1 quintals of green coffee (quintales oro) per hectare in recent years. That performance draws attention and deserves scrutiny. Three questions help evaluate the data: whether it is consistent across sources, whether the aggregate indicator is representative of the country's internal distribution, and whether figures from other countries are comparable with those for Honduras.

Does Honduras’s productivity match estimates from other sources?

Yes, within a narrow range. For the 2022–2023 harvest, IHCAFE published an aggregate Honduran productivity of 23.0 QQ/ha. The USDA Foreign Agricultural Service, citing IHCAFE in its Coffee Annual of June 2023, reported 22.0 QQ/ha. FAO, for calendar year 2023, reported 26.1 QQ/ha. One likely reason for the discrepancy is the reporting period: FAO uses the calendar year, whereas IHCAFE measures by harvest year (October through September of the following year). Yet regardless of the source, the conclusion holds: a range of 21.7–26.1 QQ/ha remains higher than the yield of the next country in the productivity rankings (Peru, with 18.6 QQ/ha).

Is the aggregate figure representative of the sector's internal distribution?

The 23.0 QQ/ha figure comes from dividing total national production by total harvested area; it is not a statistical average across municipalities. Across the 226 coffee-growing municipalities, average productivity is 19.8 QQ/ha and the municipal median is 20.2 QQ/ha — very close to the aggregate value. Roughly 85% of national production originates in municipalities with yields between 17.4 and 30.4 QQ/ha, concentrated in the western and central parts of the country (Copán, Ocotepeque, Lempira, Comayagua, and Intibucá). Crucially for international comparisons: even using the municipal median of 20.2 QQ/ha — the most conservative measure possible — Honduras remains above all other Arabica producers among the 10 largest global producers (Peru 18.7, Colombia 17.6, Ethiopia 14.3, and Guatemala 12.4).

Are figures from other countries underreported or underestimated?

This is the hardest part to corroborate. FAO metadata warns that geographic comparisons are limited due to differences across countries in methods and coverage. A partial check: if the strong yields of Honduran coffee are consistent over time, that would at least tell us that the findings hold up against potential changes in methods and coverage. Among the Arabica producers in the global top 10, Honduras has had the second highest yield in each of the last 11 years (2014–2024), with an average margin on the order of 22% over the next producer.

Conversions applied: 1 t/ha = 21.74 QQ/ha; 1 quintal oro = 46 kg.

Sources: Production for the 2022–2023 harvest by department and municipality (information obtained through an internal request to IHCAFE, 2023); Coffee Annual Honduras HO2023-0003 (USDA, 2023); FAO – Production: Crops and Livestock Products (2025), processed by Our World in Data.

Figure 6

Competitive yields do not guarantee that gains reach the sector as income

The most comprehensive evidence on farm-level costs and profitability in Honduras comes from studies conducted between 2018 and 2019 (Estrella, 2019; Álvarez, 2018). How much that structure has changed since then remains uncertain, and understanding developments in recent years is part of ongoing work.

Across a sample of producers in selected coffee-growing regionsFootnote 8^[8], Estrella (2019) found that Honduras had the lowest cost per pound among the three countries studied, but also received the lowest farmgate price: a total cost of $0.79 per pound against a farmgate price of $1.00, compared with $1.39 vs. $1.12 in Colombia and $1.31 vs. $1.44 in Costa Rica (Figures Figure 7 and Figure 8). The Honduran margin was positive, but narrow.
A substantial share of that low cost relied on unpaid family labor, which accounted for one-third of coffee farm labor in Honduras, compared with 23% in Colombia and 6% in Costa Rica. If that labor were valued at its opportunity cost, part of the model's “profitability” would become invisible — though it exists as family time that could be dedicated to another activity.
Despite those low costs, the model does not guarantee comfortable margins. In the same sample, 10% of Honduran producers did not even cover their cash costs, and 25% operated at a loss when considering all costs. The activity is viable, but only narrowly so.
A complementary reading of Álvarez (2018) suggests that the problem lay primarily with medium and large independent producers — a counterintuitive result that warrants further research.Footnote 9^[9]

Figure 7

Figure 8

And that narrow margin starts from a lower entry value than that of its Arabica peers

Among the largest producers focused on Arabica (more than 90% of their coffee productionFootnote 10^[10]), Honduras ranks second in export volume (Figure 9), but only eighth in value captured per unit exported (Figure 10).
This finding is consistent with Ceballos-Sierra and Wiegel (2025), who document that Honduras remained at around 60% of the benchmark price throughout 2000–2019, while Guatemala rose from 80% to 92% over the same period.
Several hypotheses could explain this gap, but the average price alone cannot distinguish among them: differences in intrinsic quality, composition of the export mix (proportion of conventional versus differentiated or origin-identified coffee), origin reputation in international markets, and access to buyers who pay different prices for comparable quality, among other factors. Which of these matters most, where, and under what conditions are valuable questions for a future research agenda.

Figure 9

Figure 10

On future research

The coffee boom of recent years is fading, and it has brought several important elements into view. The international price of coffee is not something Honduras controls, and history shows that the next sharp drop will come at some point. What can be transformed — and where the path lies for cushioning the effect of that volatility on the income of the sector and of the families that depend on it — are the conditions under which production operates and the positioning of Honduran coffee in the international market. How prices are formed within the value chain, why Honduras captures less value per unit exported than its peers, and what institutional arrangements could narrow these gaps are key questions for thinking about public policies that shape the sector.