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Crisis in Paraguay's coffee industry
The Tea & Coffee Trade Journal / June 1995

By Larry Luxner

ASUNCION, Paraguay -- Anybody wondering where Paraguay's coffee industry is headed ought to visit Bernardo Chaparra. That should erase any lingering doubts.

Chaparra has been president of the Paraguayan Coffee Exporters Association for about a month. His "office," located in the dingy upstairs back room of a pool hall in downtown Asunción, hardly seems like the headquarters of an organization.

Chaparra's company is Productos Primarios Paraguayos S.A., which exports soya, coffee and yerba mate. Asked what the 14-member coffee exporters' association is doing, he doesn't mince words: "We're not doing anything now. The organization is completely dead."

That, in fact, sums up the state of the industry as a whole.

According to government statistics, Paraguay has 4.4 million coffee plants, producing 4,519 metric tons. Land dedicated to coffee cultivation is around 5,000 hectares.

Yet in any official discussion about Paraguay's potential as an exporting nation, coffee rarely comes up. If it does, it's usually in connection with contraband, a key component of the Paraguayan economy.

Francisco R. Gutierrez, director of the export promotion agency Pro-Paraguay, says he's focusing all his efforts in six specific sectors: meat, fruits and vegetables, wood products, manufactured goods, textiles and leather goods.

"We are not working very hard in the coffee sector," Gutierrez concedes. "We choose sectors in which we can be successful. We have to make priorities."

Fernando Mendonca has obviously made his, and coffee isn't among them. The former president of the Paraguayan Coffee Exporters Association, Mendonca now runs Compañía Citricola del Paraguay, a citrus processing firm outside Asunción. He says almost all the country's major coffee producers have switched to other industries.

A Ministry of Agriculture adviser who asked not to be named said that although Paraguay has ideal conditions for developing a coffee industry, the country still isn't competitive.

"We don't produce in large enough volumes," he said. "Since the fall of the ICO, we are neither importing nor exporting in big volumes. For Paraguay, yerba mate offers more opportunities than coffee, both for internal markets and for exports."

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