COFFEECONOMICS
88
REVISTA ACADÉMICA ECO (23) : 73-92, JULIO-DICIEMBRE DE 2020
affects the level of profits of large producers, whose profit margin is between 25
% and 35 %; cooperatives, whose margin is between 18 % and 25 %; and small
producers, whose margin is between 12 % and 18 %.
The NCP-Function applied to Guatemala shows the quota of coffee exports to the
rest of the world is equal to 65 % of its total national production. This translates
into a domestic consumption rate of approximately 35 %. Guatemala’s coffee
market structure is unique due to a favorable ranking among the world’s largest
coffee producers, having positioned itself in the tenth place internationally as a
result of its long history in the global coffee market and to the quality of the coffee
the different regions of the country produce.
The NCP-Function of Guatemala is experiencing fast changes and adaptations
according to the equally fast changes occurring in coffee market behaviour at a global
level. The reduction of small producers directly affects its coffee market structure,
which is rapidly moving towards production by large cooperatives in order to
survive in today’s competitive coffee market. Despite the fact that the Guatemalan
coffee market structure has experienced a small growth in the previous years, the
moderate increase in the NCP-Function of Guatemala is not enough to generate
a competitive coffee market structure able to compete with large players around
the world who can satisfy the needs of large consumers, such as Europe and the
U. S., by providing huge amounts of coffee. Similarly, the coverage of local coffee
consumers tends to decrease, according to the performance of the NCP-Function
in Guatemala. Given the producers’ weak position and the high speculation by
coffee brokers, the gap between producer and broker profits considerably affects
the performance of Guatemala’s NCP-Function in the short and long run.