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Unrest in Nicaragua Disrupting Some Export Routes

Daily Coffee News photo by Lily Kubota.

(Editor’s note: The headline of this story has changed since its initial publication to better reflect new information. The story below has been updated to include an additional source, Benjamin Weiner of Gold Mountain Coffee Growers, who did not appear in the original published version.) 

A month-long protest resulting in violence and civil unrest in Nicaragua has caused transportation shutdowns affecting the export of Nicaraguan coffees following the recent harvest season.

Protests were initiated by university students against Nicaragua President Daniel Ortega’s administration, and subsequent violent clashes between activists and police have led to the deaths of at least 76 people, with another 900 injured, according to the latest reports. The protests were in response to a social security reform law that sought to increase contributions from workers and decrease pensions of the retired. Though the law was overturned within days, unrest persists amid allegations of excessive force by the government.

Last week, the government accepted a meeting with the Inter-American Commission on Human Rights (IACHR), which on Monday alleged human rights violations in a preliminary report that also mandates the government to adopt measures guaranteeing the “free and full rights of freedom of expression, peaceful gathering, and political participation.”

Meanwhile, following a taxi strike in Managua spurred by a government increase of fuel prices earlier this month — and a number of deaths and car-burnings that occurred as a result — the entire national transport sector has been affected, hampering the movement of coffee, according to some sources.

Green coffee trading company Caravela Coffee, which has operations in Nicaragua, recently sent a notice alerting suppliers and buyers to the situation. William Ortiz, Caravela’s country manager for Nicaragua, said in the email, “In an effort to fulfill all of our commitments coming out of Nicaragua, we will continue to look for alternatives and solutions, whilst keeping the coffee and our people safe.”

“Without a doubt, this situation is affecting everybody,” Ortiz told Daily Coffee News. “We are not able to export any coffee right now, as roads are blocked and there’s too much uncertainty. Therefore, we are not receiving income needed to pay producers.”

Other coffee companies have not been affected by the continued protest-led transportation blockages. “We have had no problem since the protests have happened with exporting our coffees,” Benjamin Weiner, president and CEO of Nicaragua-based farm owner and export company Gold Mountain Coffee Growers, told Daily Coffee News. “There have been roadblocks un the country but they have not stopped us from obtaining export permissions or exporting.”

For Caravela, to soften this blow as much as possible for producers, the company says it is advancing them 70 percent of the market price for their coffee so that they can continue with daily farm activities, with 100 percent of the price to be paid upon export.

“With the low market prices, producers have very little money to repay their debts with banks,” said Ortiz. “This, in turn, means that they won’t be able to receive further credits from them. It’s a chain where the weakest and smallest coffee producers will be the most affected.”

As the peak exporting season in Nicaragua is April through July, most specialty coffee has not been exported yet. According to Ortiz, if the situation doesn’t improve quickly, growers may not have enough resources to pay for fertilizers, pruning, and renovations before the next harvest, potentially hurting both volume and quality.

“We have coffee ready to be shipped, but shipping lines are not allowing any movement of containers to port,” said Ortiz. “We plan to restart shipments as soon as this calms down. We sincerely hope that with the arrival of the Commission, the situation improves so that all activities can go back to normal.”

Gold Mountain’s Weiner said that despite some extra precautions and advisories to keep Gold Mountain employees away from protest sites, operations have continued to run as normal. “Roasters have asked us about the situation in Nicaragua right now and we’ve told them exactly what we are seeing,” he said. “Our company has had no problem with exporting.”

As for the protesters and the transportation strike, Caravela’s Ortiz said, “The protesters don’t want people to suffer or for the country to collapse. Their fight is with the government, not the people. Unfortunately, the police have continued to attack protesters in several parts of the country, and so blockades remain on most of the main roads.”

Comment

1 Comment

John Gardina

Dear Lily,

I work for a large exporter in Nicaragua and I have to say that this article is misleading and non factual in many ways. I think it gives the wrong impression to the industry and can cause anticipated worries that don’t add value.

Nicaragua is going through some tough times but it is not as you describe in your article. I kindly recommend to check facts more diligently.

Best Regards,
John

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