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Volcafe Specialty Coffee

Meet the Producers event

Honduras Overview October 25, 2012

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Honduras General Information

President Porfirio Lobo Sosa

GDP per capita (PPP) USD 4,300 (Est. 2011)

Exchange Rate: 19.6836 = 1 USD (Sep. 2012)

GDP Composition

(Sep.2012):

Services: 61.1%

Manufacturing: 26.3%

Agriculture: 12.6%

Key agricultural produce (as

a % of GDP 2011e)

Coffee: 3.03%

Banana: 1.08%

Cattle: 1.85%

Fisheries 1.11%

Real GDP Growth 2.80% (2010e)

Underlying Inflation 6.80% 10-11 (4.3% 11-12) (Sep. 12)

Currency Revaluation 3.46 % (since January 2012),

Currency Band System

Local Interest Rates

(Sep.2012):

Lempiras 6.03 % passive rate

USD 2.34 % passive rate

Foreign Debt: USD 3.866 million (22.3% of

GDP) (Apr 2011)

Trade Balance: Deficit USD -3.607 million (2011)

Unemployment rate: 4.6 % (official, 2010)

30%+ (“under”employed)

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Honduras FOB Value of the main Agricultural Exports in $ mio

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Honduras Coffee

Coffee Area Planted (2010): 303,320 ha

Yield per Ha. (2012): Average 24.5 46kg bag (quintal)

of Green Coffee

Coffee Growers (2012): abt. 180,000

Coffee Exporters (2012): 38

1 Bag (export) 69 Kgs net or 1.5 Quintal

1 Quintal 46 Kgs net (100 Spanish Pounds)

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• The coffee industry in Honduras has

seen rapid and significant

developments in the recent past

• Intermediaries play a large role with

roughly 77% of producers selling to

them

• And roughly 16% of coffee sold

directly to exports, with the rest being

exported directly

Honduras Coffee Procurement and Export System

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Honduras Coffee Procurement and Export System

• The government controls the national coffee activity through the CONSEJO

NACIONAL DEL CAFÉ (CONACAFE). CONACAFE was created in 2000 with

the goal of formulating a political and regulatory regimen for the coffee sector in

Honduras

• Another important body in the Honduras coffee sector is the INSTITUTO

HONDUREÑO DE CAFÉ (IHCAFE). Originally created as a public body in 1970

to support the development and strengthening of the Honduras coffee sector

• It is now a private body (since 2000) with the principle aim of developing the

coffee culture in Honduras through the transfer of “best practice” with respect to

technology, production methods and the commercialization of coffee

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Honduras production 60 kg bags (000´s) f As per Sep 2012

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Central America production 60 kg bags

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Honduras Coffee Production & productivity per Region, 2010/11

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Honduras Crop Statistic 2011/12 * Source: IHCAFE HONDURAS as of 24th Sep

B46 Kg Forecast Executed Difference % Difference

5,400,000 7,126,653 1,726,653 32%

Relative Comparison 2010/11 2011/12 Difference % Difference

PURCHASES 5,186,484 7,236,368 2,049,885 40%

SALES 5,218,135 7,456,539 2,238,404 43%

EXPORTS 5,014,918 7,126,653 2,111,735 42%

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Honduras 2010/11 Exports destinations •Strong exports to Europe in general. As well as a good presence in the US and

growth potential in Asia

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Honduras Certified Coffees

Certification 2009/2010 2010/2011

Volume Percentage Volume Percentage

UTZ CERT. 206545.5 37% 185,790.00 33%

Gourmet* 97973.9 17% 787.50 0%

ORG/FLO 94323 17% 241,650.00 43%

ORG. 59932.5 11% 126,766.50 22%

FLO 34392 6% 62,277.00 11%

RFA 24427.5 4% 60,915.00 11%

FLO/Café Practices 17325 3% 14,437.50 3%

Café Practices 7012.5 1% 46,087.50 8%

ORG/FLO/GENUINE MARCALA 5992.5 1% 7,020.00 1%

ORG/GENUINE MARCALA 5632.5 1% 1,170.00 0%

ORG/UTZ CERT: 4318.5 1% 6,225.00 1%

ORG/FLO/RFA 1650 0% 3,714.00 1%

ORG/RFA 1312.5 0% 0%

FLO/RFA 1237.5 0% 1,650.00 0%

ORG/FLO/Café Practices 1237.5 0% 0%

TAZA EXCELENCIA 552.42 0% 0%

FLO/UTZ CERT. 456 0% 0%

GENUINE MARCALA 412.5 0% 4,549.50 1%

ORG/FLO/UTZ CERT. 210 0% 0%

FLO/Genuine Marcala 0% 840.00 0%

COE 0% 804.54 0%

Total 564,943.82 100% 764,684.04 100%

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Molinos de Honduras

Main Areas:

Santa Rosa de Copán,

Comayagua, Santa

Bárbara y San

Pedro Sula

Growing Areas: working

directly with producers and

intermediaries

Region Production MDH Market Share

Copán 1,338,024 155,779 11.6%

Comayagua 1,117,003 44,523 4.0%

El Paraíso 903,787 28,705 3.2%

Agalta 562,215 2,667 0.5%

Opalaca 955,637 27,094 2.8%

Montecillos 1,496,777 32,353 2.2%

Total 6,373,443 291,120 5%

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Located in the western part of the country, it holds the national park of Celaque, which has the country’s highest peak. This is the

highest and most mountainous region of the country, with deep soil under the shade of Inga and Musagenus. Among its main

attraction and cultural riches you’ll find the the famous Copan Ruins of the Mayan World.

It is a coffee with chocolate taste, full, balanced and with a long-lasting aftertaste. Source: Specialty Coffee Association of Honduras SCAH.

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Located in the central part of the country, it covers the departments of Yoro and Comayagua,. This region is typically mountainous

with dark fertile soil and medium slopes, made up in its majority of protected areas that favor the equilibrium of the ecosystem.

Coffee with a delicate chocolate aroma, caramel and tropical fruit taste, creamy body and persistent aftertaste. Source: Specialty Coffee

Association of Honduras SCAH.

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It’s a coffee with citric flavors, sweet fragrance, soft body, nice acidity with long aftertaste. Source: Specialty Coffee Association of Honduras SCAH.

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Found in the eastern part of the country, it’s the most disperse area and is made up of fourteen protected areas that add plant

diversity to a balance ecosystem. Sierra de Agalta National Park is located in this region.

A coffee that is honeysweet in fragrance and aroma; it has an intense citric flavor with a delicate and pronounced acidity, and a

pleasant aftertaste. Source: Specialty Coffee Association of Honduras SCAH.

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Opalaca Golden Mountain; enclosed in the departments of Santa Bárbara, Intibucá and Lempira, this region has excellent climatic

conditions which give a privileged cup with a perfect balance. The population of these departments include a percentage of Lenca

Culture.

Coffee with a fine and delicate acidity, pleasantly aromatic, well-balanced with tropical fruit flavors, a sweet aftertaste and soft

body. Source: Specialty Coffee Association of Honduras SCAH.

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This region includes the departments of La Paz, Comayagua, Santa Barbara and Intibucá, through the Montecillos Mountain

Range. Currently it is protected by origin denomination as “Marcala Coffee” as an initiative to improve the competitiveness of the

coffee produced in the region.

An aromatic coffee with brilliant vivid acidity; it has an exquisite orange and peach taste with a soft velvet body and toning floral

aftertaste. Source: Specialty Coffee Association of Honduras SCAH.