October Coffee News

-Brisk Business in Junk
-Honduran Economics

Brisk Business in Junk

We're getting our e-letter out a couple of days later than we prefer because we've been managing a huge yard sale in front of our house this week. You wouldn't know the economy has been grinding to a halt or tottering on the brink of disaster (or pick your own dramatic metaphor) by the brisk business we did this week selling our junk (and that of several co-workers of Guillermo). It's a good feeling to free up space in the house while moving unused items to people who can use them, and we made a few bucks besides.

Honduran Economics
Keeping to an economic theme, we thought we'd write a bit about the state of the Honduran economy these days. As bad as the U.S. economy is these days, there is some comfort in knowing things aren't as bad they have been in Honduras for a long time now. One of the poorest countries in the Western Hemisphere, Honduras is third in poverty only to Haiti, and it's southern neighbor Nicaragua. The CIA World Factbook describes Honduras as having an "extraordinarily unequal distribution of income and massive unemployment" (nearly 30%) with 50% of the population living below the poverty line.

Wikipedia states that the Honduran economy has seen strong growth of about 7% over the past few years, which makes sense to us given all of the new buildings and businesses we have seen popping up in Comayagua when we visit. But this is sure to be tested in the next few years, as Honduras's economy is very closely tied to our own. (69% of Honduras' exports go to the US and 52% of their imports are from us). Even more interesting, is that "remittances" sent home from Honduran immigrants in the United States now represent more than 25% of the country's GDP, equivalent to nearly 3/4 of their income from exports!

The economy also relies heavily on exports of bananas and coffee and so is especially vulnerable to shifts in commodity prices which can fluctuate widely. In coffee producing communities, like those where Guillermo's family lives, the economy also rises and falls with the coffee season, making August, September and October some of the leanest months of the year for everyone, until the coffee harvest begins in November and money starts to change hands again. Guillermo's sister who is a dentist, remarked when she was visiting us last month that even her business is slow this time of year, with only people with the most serious toothaches seeking dental care.

Thankfully, our sales of Velasquez Family Coffee have helped insulate our family members a bit from the rough ups and downs of the Honduran economy. And hopefully, they will help us ride out the economic storms here at home too.