Bloomberg Línea — State-owned Taiwan Sugar Corp (Taisugar) has announced that it will no longer import coffee from Honduras, following the Central American country’s decision to change diplomatic allegiance to China.
Taisugar said it still had between 20 and 30 tons of Honduran coffee in stock, which it expects to sell by the end of the month, after which it would stop importing Honduran coffee.
Instead, the company will explore importing coffee from Guatemala, which remains among the 13 nations that recognize the Asian island’s sovereignty and independence.
The Honduran government made ties with the People’s Republic of China official on March 26, after announcing via Twitter that it had formally severed diplomatic relations with Taiwan.
Since 2017, Taisugar has been importing coffee produced by small-scale Honduran farmers, which generated annual revenue of around $985,092 for the company, some of which has been donated to build schools in the Central American country.
In 2018, the company opened an office in Honduras to help boost the country’s coffee industry, but the state-owned company said it would now close the office and pull out altogether in the wake of the diplomatic shift.
Taisugar had been promoting the product through a joint program with Taiwan’s High Speed Rail, which sold specialty coffee from Honduran farms to passengers in the first week of each month for an average of $1.60 for a 300-milliliter cup of coffee.
Effect on the coffee industry
An analyst quoted by the Taipei Times said the diplomatic rift with Honduras is unlikely to significantly affect Taiwan’s coffee market.
“Honduran coffee accounts for only a small part of Taiwan’s coffee market, and the product is mainly used for coffee blends here,” said Bess Wu, senior sales manager at Ergos Coffee Trading Co.
Purchases of Honduran coffee represent 1.69% of Taiwan’s total imports of the bean, according to data from the Ministry of Finance.
Meanwhile, Guatemala’s purchases represent 11.9%, the highest percentage of any of Taiwan’s diplomatic allies, according to official data.
Coffee is the main product of Honduran agribusiness. In the 2021-2022 harvest, the country sold 6.1 million quintals, which generated $1.44 billion in exports, according to the Honduran Coffee Institute.
By the fifth month of the 2022-2023 harvest, Honduran coffee sales totaled 2.64 million bags, which represented a year-on-year drop of 6%. In foreign currency, exports generated $440 million.