UPDATE 1-Guatemala to leave International Coffee Organization – sources

(Adds context on coffee pricing, ICO comment)

GUATEMALA CITY, July 1 (Reuters) – Guatemala has begun the
process to leave the International Coffee Organization (ICO) due
to concern over falling coffee prices, a Guatemalan government
official and another person familiar with the matter said on
Wednesday.

Coffee is the second most important agricultural export for
the Central American country, which is struggling to recover
from a 2012 roya fungal outbreak, in addition to the economic
challenges of the coronavirus crisis.

The Guatemalan official said Central American countries were
seeking alternatives to support the coffee industry due to
pricing concerns as global coffee prices are trading at low
levels. Guatemala mainly produces Arabica.
The ICO said it had not been officially informed of
Guatemala’s plan to withdraw from the International Coffee
agreement, but that it was aware “some forces in the country”
were dissatisfied with ICO’s handling of the pricing crisis.

“We hope that these rumors will not materialize,” ICO said
in a statement, urging Guatemala to work with other members to
develop a new agreement.

It added that it was not able to act as a market regulator.
(Reporting by Sofia Menchu;
Additional reporting by Maytaal Angel in London
Writing by Diego Ore and Daina Beth Solomon; Editing by Sandra
Maler)

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