Report Highlights: 

Mexico is suffering from an outbreak of coffee rust, though the impact is not as drastic as that seen in Central American countries. The Post/New marketing year (MY) 2014/15 coffee production forecast is 3.9 million 60/kg bags. The Post/New MY 2013/14 total production estimate remains 3.8 million 60/kg bags. However, the private sector believes production is lower. Coffee exports for MY 2013/14 and 2014/15 are expected to be lower compared to MY 2012/13, due to rust-related declines in production. Coffee imports for MY 2013/14 and 2014/15 are expected to increase to meet domestic demand. The government has just released its developmental policy for the sector, the New National Coffee Policy.


Coffee production in Mexico has been affected by adverse weather conditions – frosts, untimely rainfall, excess humidity—which have been ideal for the expansion of coffee rust (known locally as Roya del café) in many production areas. Coffee rust outbreaks are affecting plantations in Mexico mainly in the states of Chiapas, Veracruz, Oaxaca and Puebla. Coffee rust is a fungal disease that can lead to plant defoliation. In moderate cases, leaf defoliation reduces plants’ ability to produce fruit (the seeds of which are the actual coffee bean) in the next cycle. In serious cases, plant mortality occurs. The advance of rust through Central America, Honduras, Panama, and Guatemala, began about three years ago before it reached the area of Chiapas in southern Mexico, spreading northward. 

Producers in Mexico indicate that coffee production for the next crop MY 2014/15 (October/ September) could be better than MY 2013/14 production, as state governments have supported the states of Chiapas, Veracruz, Oaxaca and Puebla to increase production of plants resistant to coffee rust, to be used to renovate plantations. In addition, state governments are providing technical assistance to improve phytosanitary conditions of plantations and other investments to improve production, including fungicidal applications. The Secretariat of Agriculture (SAGARPA), the National Service of Health, Food Safety, and Food Quality (SENASICA), the Integrated Coffee Production Chain (Sistema Producto Café), and the Mexican Coffee Association (AMECAFE) are all working to prevent and control coffee rust in Mexico. 

Although there is no official Mexican forecast for coffee production for MY 2014/15, the Post/New forecast (October/September) is 3.9 million 60/kg bags, slightly higher than last year’s production, but still below its five year average. This forecast is preliminary as weather and disease events could affect planted and harvested areas as well as crop yields during the year. The Federal government announced on April 30, 2014, the New National Coffee Policy. This policy will include phytosanitary activities, a center for research, innovation and technological development, a more extensive hedging program, and other incentives. SAGARPA has within its Program of Promotion to Agriculture, a specific component called “PROCAFE” which will work within this new policy, and is geared towards increasing coffee production and the productivity of rural agricultural economic units, by providing infrastructure to producers and coffee plants to renovate plantations. Resources for this program are about $52.4 million dollars. This budget is geared towards 12 producing states—Chiapas, Colima, Guerrero, Hidalgo, Jalisco, Nayarit, Oaxaca, Puebla, Querétaro, San Luis Potosí, Tabasco and Veracruz. 

The Post/New MY 2013/14 total production estimate remains 3.8 million 60/kg bags. The official estimate has not been revised as it is expected that the impact of the coffee rust outbreak will not affect plantations as severely as it did in Central America. The Mexican government is still estimating 3.9 million 60/kg bags of production. The private sector, however, indicates that coffee rust reduced coffee yields by 30 percent or more. Therefore, the private sector is estimating production for MY 2013/14 at 3.1 million 60/kg bags. 

Rust did not severely affect MY 2012/13 production as most of the coffee for that marketing year had already been harvested when the pest began hitting the production areas. The Post/New MY 2012/13 production estimate was revised upward to 4.6 million 60/kg bags based on industry information.

Official estimates up to December 2013 indicate an expected production of 4.4 million 60/kg bags. Private sources, however, believe production was higher, at nearly 5.0 million 60/kg bags. 

A number of factors have led to the relatively flat/downward production levels witnessed in Mexico in recent years. Good agricultural practices are still not followed by all producers; many coffee plantations are old and in need of tree renovation; the prevalence of poor fertilization practices; and increasing costs of production. There are efforts from state governments to support coffee production through tree renewal with trees resistant to pests. Other goals include recovery of planted areas and support for various types of price-enhancing certifications (e.g. organic, fair trade, etc). The state of Veracruz, based on a new local law, is encouraging production, trade, and coffee consumption in the state. 

Production techniques and challenges continue to evolve. Some producers have been able to increase plant density from 2,600 plants per hectare to 5,000 or more. Also, some indigenous communities have begun to interplant amongst their coffee trees other species like lime and avocado to diversify production and provide shade that helps coffee quality and enhances eligibility for value added certifications like Rainforest Alliance and Shade Grown. In recent years, the cost of production has increased due to a lack of field labor. There is a migrant labor agreement with Guatemala to bring workers to Chiapas for 6 weeks at the peak of the harvest, after which time, the workers return home. Field labor represents more than 80 percent of total productions costs. The Secretariat of Agriculture manages a program entitled Integrated Coffee Productive Chain that includes all the actors in the coffee chain to help develop and support the sector by providing access to technology, training, access to industrialization, and trade channels. Around 35 percent of Mexico’s coffee production area is top quality high grown coffee, located at an altitude of 900 meters or more above sea level and 43.5 percent grows between 600 and 900 meters above sea level. 

In general, Mexico is suited for coffee production due to its geographic location and climatic conditions. Recent reports indicate that about 96 percent of the coffee produced in Mexico is of the Arabica variety while 3 to 4 percent is of the Robusta variety. Although this production ratio has been maintained for some time, SAGARPA is now supporting the planting of 20,000 ha of Robusta coffee to try to substitute imports of this variety that the processing industry is bringing in to produce soluble coffee. There are 1,600 ha in Chiapas and about 2,000 ha in Veracruz that turned to Robusta for this purpose. Larger amounts of Robusta are needed to support Mexico’s goal of becoming a major producer of soluble coffee. The large Nestle plant in the city of Toluca, just outside Mexico City, has been increasing its output of soluble coffee. Mexico is also producing excellent organic coffee, a trend which is increasing. According to SAGARPA, about 7 to 8 percent of growers cultivate organic coffee, mainly for export purposes. 

Planted and harvested hectares in Mexico have been on a slow downward trend for a number of years due to adverse weather such as freezing temperatures and atypical rainfall. These events, some believe, are increasing in frequency due to climate change. Volatile prices have also had an impact. The planted area for MY 2013/14 is estimated at 737,295 hectares, compared to 737,112 hectares of MY 2012/13. The Post/New MY 2014/15 planted area is forecast to continue to be similar to MY 2013/14 as the industry as well as the government are fighting coffee rust and working towards increasing coffee production and productivity. However, the effects of climate and coffee rust are still present.

Approximately, 98 percent of the Arabica varieties planted in Mexico are Bourbon, Caturra, Catimor, Catuai, Maragogipe, Mundo Novo, Garnica and Typica. Coffee is produced in 15 states where the main producer, in a typical year, is the state of Chiapas with 41 percent of production, Veracruz with 28 percent of production, and Oaxaca with 11 percent of production. Harvesting usually begins in September and ends by the month of March, depending on the area. 

Yields continue to differ widely in Mexico due to variations in management and weather. Yields for MY 2014/15 are forecast to be better compared to MY 2013/14 due to expected care and management to control and prevent coffee rust issues. Yields for MY 2013/14 are expected at about 1.7 MT/Ha, lower compared to yields for MY 2012/13 of 1.8 MT/Ha. Yields in Veracruz, Puebla and Chiapas are higher, about 2.6 MT/Ha, 3.4 MT/Ha and 2.1 respectively. However, due to climate issues and the coffee rust outbreak, Veracruz is expected to be about 2.4 MT/Ha, and Chiapas will drop to 1.3 MT/Ha in MY 2013/14. 


Domestic coffee use (both roasted and soluble coffee) for MY 2014/15 is forecast at 2.18 million 60kg/bags, assuming relatively stable domestic prices. Per capita consumption of coffee in Mexico has been slowly increasing. Sources differ, however, on data for coffee consumption. The range goes from 1.1 kg/per capita to 1.4 kg/per capita or more. Consumption has been driven by promotions and the growing number of coffee shops in Mexico. Ground coffee consumption has increased and is the second largest share of domestic use. Soluble coffee is still very important and has about 67 to 69 percent share of consumption. PS&D data has been adjusted accordingly. Post/New MY 2013/14 use of coffee estimates were revised upward from previous estimates to 2.15, still reflecting lower availably of coffee at higher prices. Use of coffee estimates for MY 2012/13 was revised downward from previous estimates due to lower availability than estimated. According to AMECAFE, about 40 percent of domestic coffee production is marketed for local consumption and the remaining 60 percent is for export purposes. Official sources confirm that Mexico lacks a reliable consumption monitoring system. 


There is a Sectorial Promotion Program managed by the Secretariat of Economy (PROSEC) that allows the importation of a product at a preferential tariff as long as the product is transformed into a different product. The stated goal of the program is to increase competitiveness and supply chain efficiency in certain sectors and thus provides preferential access regardless of whether finished products are for domestic users or for export. In the case of coffee, the products under the following HTS numbers are included: 0901.12, 0901.21, 0901.22, and 2101.11.01. Coffee imported under this program is classified under HTS number 98.020022 –“Import of goods via special operations of the Industry of Coffee”. However, all types of coffee (beans, roasted and soluble) are classified together, masking the actual type of coffee imported. According to this data, for MY 2011/12, about 1 million 60/Kg bags were imported and 708,000 60/Kg bags in MY 2012/13. Most coffee under this special tariff is imported from Vietnam, Brazil and Indonesia. Therefore, import data was adjusted accordingly in the bean imports category. Imports for MY 2014/15 are expected to continue increasing. Previous PS&D estimates are being revised, starting with the initiation of the program in 2007. 

Increasing imports of coffee in general are attributed to increased demand by middle-income consumers who are reportedly searching for different options from domestic soluble brands as well as by high-income consumers who are in search of fashionable value-added imported coffee. Imports of roasted coffee are increasing as consumers now have more options for freshly-made coffee via the increasing number of specialty coffee shops in the country. Mexico is importing large quantities of coffee beans—mainly Robusta variety—as the Nestle plant in the city of Toluca in the State of Mexico, has increased its soluble coffee production capacity. 

Although there is no official Mexican forecast for coffee imports, Post/New MY 2014/15 forecast for total imported coffee is 2 million 60/kg bags which is a slight increase over MY 2013/14 estimated imports. The larger volume of imported coffee is the result of sub-normal coffee production next year and stable demand. However, recent higher international prices could be slowing imports. Imported coffee for MY 2012/13 and MY 2013/14 was revised downward from previous estimates based on U.S. trade data. 

The Secretariat of Economy (SE) published in the Diario Oficial (Federal Register) on April 1, 2014, an agreement modifying a previous announcement of a duty free import quota for roasted and ground coffee, to keep promoting the packaging of coffee in 40-gram containers for household consumption. The HTS numbers are 0901.21.01; 0901.22.0; and 0901.90.99. Undoubtedly, prices will play a key role in the volume to be imported. 

Although there is no official Mexican forecast for coffee exports for MY 2014/15, the Post/New forecast is 2.9 million 60/Kg bags; however this number is still tentative and will tend to change depending on production and international prices. The United States continues to be the main international market for Mexican green coffee. The MY 2013/14 export estimate was revised downward from previous estimates as exports were influenced by low international prices at the beginning of the season, and lower domestic production volumes due to coffee rust. The MY 2012/13 export estimate was revised upward based on U.S. trade data. 


The Post/New MY 2014/15 ending stocks forecast is slightly lower compared to the MY 2013/14 revised estimate. Ending stock estimates for MY 2013/14 were revised downward from previous estimates due to lower production estimates. MY 2012/13 stocks estimates were also revised downward from previous estimates based on available data. AMECAFE reports that Mexico has never had a reliable system to record ending stocks, and, as such, data are largely anecdotal. Current stock estimates reflect information obtained from industry sources, as no official government statistics are available. 


In order to offset low per capita consumption levels and to counter the belief that there are negative health effects associated with consuming coffee, the Mexican coffee industry is promoting the health benefits of high-quality Mexican blends. Consumers with relatively greater purchasing power have been targeted by the specialty coffee sector for years. Soluble coffee consumption, however, is based on disposable income constraints. 

A large U.S.-headquartered retail store specializing in coffee sales reported that it opened more than 300 stores in Mexico. They have also begun offering Mexican sub-origin labeled coffee such as “Chiapas.” These coffees are often bought by intermediaries who purchase directly from private farmers or cooperatives. The rapid growth in coffee shops has attracted foreign and domestic investment, especially since the consumption of coffee in fast-food chains has developed into a new market as well. As a result of successful negotiations with powerful retailers, many small local brands are reaching supermarket and hypermarket shelves. Some of the companies behind this gradual change in distribution are specialty coffee shops. 

Also, in order to help individual and organized producers gain international price certainty, SAGARPA, through the Supports and Services Agricultural Marketing Agency (ASERCA), launched the "Basic Hedging Mechanism of Coffee" for the Marketing Year 2013/14. The program involves futures and options types of contracting to boost marketing of Arabica coffee and support coffee growers in the lead up to harvest season. The New National Coffee Policy will keep this kind of support by channeling $3.1 million dollars to help coffee growers secure their coffee sales. 

To support domestic marketing for coffee, SAGARPA launched a strategy called “Consume Mexican Coffee” where 12 producer states will promote their coffee within SAGARPA offices, the Lower Chamber of congress, the Secretariat of Treasury, the International Airport and other federal buildings, by selling their coffee products. Each state will participate for a week in each place covering a total of 12 months. Producers have been pleased by sales thus far and have been promoting their coffee widely. To date, this program has contributed to the marketing of 23 Mexican coffee brands from the states of Chiapas, Colima, Guerrero, Jalisco and Nayarit, with sales of 13.5 million pesos ($1.0 million dollars). In addition, producers have established business contacts with the National Association of Supermarkets and Department Stores (ANTAD) and commercial chains like Walmart supermarkets in order to promote retail sales of Mexican coffee of high quality. 

Opportunities for Coffee Producers

AMECAFE and the coffee sector are holding the third edition of the Cup of Excellence Competition in Mexico, scheduled for May of this year. The competition aims to promote the marketing of quality Mexican coffee in international markets. The executive coordinator of AMECAFE indicated that the previous edition yielded good results, helping growers to market their product, and receive record prices for their product. This competition has been positive for Mexican producers, as the world is starting to see Mexico as a potential producer of specialty coffees. 


New National Coffee Policy 

On April 30, 2014, SAGARPA, with the participation of coffee producer organizations, agroindustry, and traders in the coffee sector, as well as legislators and public officials, announced the government’s New National Coffee Policy. There will be a federal investment of about $52.8 million dollars that will seek to modernize and transform the competitiveness of the sector. As part of the strategy, the program PROCAFE will initiate its activities, including the construction of a technically sophisticated nursery in Chiapas. As part of the program, it is expected that 20 million plants resistant to the coffee rust will be produced and delivered, and an expanded coffee hedging mechanism will be implemented. 

Phytosanitary Issues 

According to SENASICA, coffee rust is a disease of economic importance and was under no official regulation until 2012, but since 2013 has been considered subject to an official program. Officials indicate that coffee rust has not been as harmful as in other countries with resurgent rust problems (Central America) since the implementation of cultural practices such as regulating shade coffee, pruning of plants, weed control, and preventive use of fungicides based on copper, have resulted in a low presence of the pest. However, in September/October 2012, different conditions of humidity and temperature in the region of Soconusco in the State of Chiapas, as well as strong winds and the dispersion of personnel laboring in the harvest, contributed to more aggressive coffee rust behavior. Therefore the Federal government implemented an emergency program. In response to the coffee rust outbreaks, SAGARPA launched, in the city of Tuxtla, Chiapas, an emergency inter-institutional program on January 28, 2013, to combat coffee rust disease. The Secretariat of Agriculture instructed SENASICA and AMECAFE to establish strategies to help prevent the spread of coffee rust. 

SENASICA, along with AMECAFE and the Integrated Coffee Production Chain, expect to strengthen joint research, training, technical assistance and dissemination of information to all sectors involved in the coffee production chain at the federal, state and municipal levels. This program is being implemented for the control of coffee rust in the states of Chiapas, Oaxaca, Puebla, and Veracruz. It is expected that PROCAFE can begin distributing funds for this purpose now that the National Coffee Policy has been announced. 

SENASICA’s April and May 2014 reports on the distribution of coffee rust at the regional level confirm the completion of the 2013 epidemic cycle. Foliar coffee rust severity in April 2014 registered 4.3% for Puebla, 2.1% for Chiapas and 2% for Veracruz, corresponding to the lowest values observed since August 2013. Additionally, there is no evidence of the beginning of a new epidemic cycle, thanks mainly to the increased loss of inoculum in the month of March—that is, due to the high rate of defoliation mainly in Chiapas. Therefore, it is expected that the impact of rust will be less severe in MY 2014/15 compared to MY 2013/14. According to the reports, up to April, the phenological stage of coffee in Chiapas is predominantly at the stage of flowering (32%) and fruit development (38%); in Veracruz, the fruit is in mainly in the development stage (47%) and has completed harvest (1%); in Puebla, the fruit is mainly in the development stage (49%), fruit setting stage (predios en brotacion) (21%), and flowering (25%)