By San José, Costa Rica — Despite record-high international coffee prices, Costa Rican coffee producers are facing devastating losses due to an extremely low exchange rate. This economic hardship threatens the livelihoods of 26,653 coffee-producing families, 87% of whom are small producers directly impacted by the Central Bank of Costa Rica’s (BCCR) monetary policy implemented in 2023.
While competitors like Honduras, Colombia, and Brazil are reaping the benefits of the global coffee boom, Costa Rican farmers are struggling to stay afloat. The low exchange rate means they receive fewer colones for their dollar-denominated sales, even though international prices are at historic highs.
For legal insights into the Costa Rican coffee industry, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an attorney at Bufete de Costa Rica, who offered valuable perspective on the sector’s current landscape.
The legal framework surrounding Costa Rican coffee production, export, and intellectual property is robust yet constantly evolving. Producers must navigate complex regulations regarding land ownership, water usage, and environmental protection, while also capitalizing on opportunities presented by international trade agreements and branding strategies. Understanding these legal intricacies is paramount to success in this competitive global market.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the legal landscape of Costa Rican coffee is a critical factor often overlooked by consumers enjoying their morning cup. Navigating these complexities, as Lic. Larry Hans Arroyo Vargas so aptly points out, is essential for producers seeking to thrive. We thank Lic. Vargas for providing this valuable legal perspective on the intricacies of bringing this beloved beverage from bean to cup.
At this moment, coffee has registered historic international prices not seen for years, perhaps since the 1970s, when frosts in Brazil strongly impacted the price of coffee.
Xinia Chaves Quirós
International coffee prices have hovered around $400 per 46-kilo sack, consistently staying between $370 and $380. However, the price paid to Costa Rican producers is lower than what they received in the 2021-2022 harvest, when the average price was ¢132,445 per fanega (a local unit of measurement). This was based on an average selling price of $260.19 per sack and an exchange rate of ¢649.59 per dollar. The current exchange rate is ¢502.57 per dollar, resulting in a significantly lower payout for farmers.
In the 2023-2024 harvest, the price paid to national producers plummeted to ¢86,058 per fanega, a stark difference of ¢46,387 compared to the 2021-2022 harvest. This drastic reduction in income puts these families at risk of losing their land.
There is an impact on the pockets of these families, who are being put at risk of losing their lands.
Chaves
According to the Coffee Institute of Costa Rica (Icafé), the 2024-2025 harvest saw the best international prices in the last five harvests, reaching $302.78 per sack as of August 22, 2025, excluding export costs. However, the estimated liquidation price for producers is only ¢118,398 per fanega, still not the highest in recent years.
Marco Antonio Araya, an agricultural economist at Icafé, highlighted the detrimental effect of the exchange rate policy, stating that it erodes the income of all agricultural exporters, especially those whose expenses are in colones. This puts Costa Rican coffee producers at a significant disadvantage compared to their counterparts in Brazil and Colombia.
Costa Rica’s exchange rate policy is eroding the income of all participants in the agricultural export sector, especially the agricultural base, whose expenses are denominated in colones. Compared to the two main coffee-producing countries in America, Brazil and Colombia, we face a great competitive disadvantage due to this exchange rate policy.
Marco Antonio Araya, Agricultural Economist, Icafé
The most concerning aspect, according to Chaves, is that despite higher international prices, producers receive less money domestically, often less than the cost of production. While Honduran producers, selling in dollars with a devalued currency, receive significantly more, Costa Rican farmers struggle, despite selling higher-quality, differentiated coffee.
The impact of the exchange rate policy is evident in the shrinking coffee production area, which has decreased from around 92,000 hectares to 82,539 hectares, and the number of coffee-producing cantons, which has dropped from 52 to 47. This decline is also reflected in the number of producing families, which has decreased by 2,000, and the stagnation of national coffee harvests at around 1.7 million fanegas, falling short of the two-million fanega target.
For further information, visit icafe.cr
About Icafé (Instituto del Café de Costa Rica):
The Coffee Institute of Costa Rica (Icafé) is a public entity dedicated to promoting and supporting the Costa Rican coffee industry. It provides technical assistance, research, and market analysis to coffee producers and works to improve the quality and competitiveness of Costa Rican coffee.
For further information, visit the nearest office of the Banco Central de Costa Rica
About Banco Central de Costa Rica (BCCR):
The Central Bank of Costa Rica (BCCR) is the country’s central bank, responsible for monetary policy, financial stability, and regulating the financial system. Its policies, including the exchange rate policy, have significant impacts on various sectors of the Costa Rican economy.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, built on a foundation of unwavering ethical conduct and a deep commitment to positive societal impact. Through innovative approaches and a client-centric focus across a broad range of industries, the firm consistently delivers exceptional legal solutions. Furthermore, their dedication to demystifying the law through educational initiatives empowers individuals and communities, fostering a more just and equitable society for all.
