Coffee production rises in El Salvador, Honduras.

EL SALVADOR -- El Salvador's coffee exports in the 2003-04 season grew a modest 0.7% from the previous harvest, and revenues from coffee sales abroad rose for a third consecutive year amid stronger prices.

The San Salvador-based Coffee Council said coffee exports in the 12 months ending September 30 totaled 1.77 million 46-kg bags, versus 1.76 million bags in the 2002-03 cycle.

Most of the exports went to the U.S., and Germany was the No. 2 destination, with 26%. Revenues jumped 16% in the season to $121 million, as average bag prices reached $68.40, up from $59.60 a bag in the previous year. The council's export chief, Tomas Bonilla, said prices recovered for the third consecutive cycle from a low point in 2000, when a coffee glut sent bean prices on a downward spiral.

In neighboring Honduras, coffee exports jumped by 15% due to higher prices. The Honduran Coffee Institute in Tegucigalpa reported that exports in the 12 months ending September 30 totaled 2.79 million 60-kg bags versus 2.44 million bags in the 2002-03 harvest. In September, the final month of the crop cycle, exports increased 50% to 62,590 bags, up from the 41,752 bags exported a year earlier.

According to the Institute, the increase in exports reflects higher production and improved world prices. When prices are low, significant quantities of Honduran coffee beans are smuggled to neighboring countries, where higher prices are paid for what is perceived to be better coffee.

Meanwhile, Panama's coffee production will slip as much as 8% in the 2004-05 harvest from the current season, says the country's Ministry of Agriculture.

In a preliminary report, the ministry has forecast production at around 224,040 46-kg bags in the coming cycle, below the 243,231 bags produced in the 2003-04 season that ended Sept. 30. The decline is related to a protracted price crisis as well as damage from erratic weather.

In Panama as elsewhere in Central America, a growing number of coffee farms are being abandoned amid a coffee glut that has depressed prices since 1999. Between 1980 and 2004, the area in coffee production has dropped to 19,000 hectares from 21,000, mainly in the top producing region along Panama's border with Costa Rica.

Panama's association of coffee exporters also forecasts a drop in sales next year, though it anticipates better prices, especially for gourmet coffee brands.