Guatemala's coffee crop hit by killer fungus
* Fungus affects up to 40 pct of Guatemala's coffee trees
* Outbreak cuts harvest forecast
* More aggressive variety threatens farmers
By Mike McDonald
GUATEMALA CITY, May 8 (Reuters) - A mutant strain of one of the world's most devastating coffee diseases is attacking crops in Guatemala, putting farmers on high alert for a wider outbreak across Central America.
Growers are battling a new form of leaf rust fungus, or roya, which kills leaves on coffee trees and makes the weakened plants produce less.
Leaf rust usually infects coffee grown at lower altitudes where it is hotter and wetter, conditions in which the fungus thrives, but a new type is creeping up to higher, cooler areas.
That is a big worry for gourmet coffee roasters who rely on arabica coffee grown in the mountains or on slopes of steep volcanoes. Together, Central America and Mexico produce around a fifth of the world's arabica, a higher-quality variety favored by most top-end roasters such as Starbucks.
"We haven't seen leaf rust at this intensity ever before in Guatemala," Ricardo Villanueva, president of Guatemala's coffee growers' association Anacafe, told Reuters.
Nearly 40 percent of Guatemala's roughly 677,000 acres (274,000 hectares) of planted coffee land has been affected by the disease, he said.
Before the scale of the problem emerged, Anacafe estimated Guatemala would produce 3.7 million 60-kg bags of coffee this crop cycle, which began last October and ends in mid-2012.
Damage from leaf rust forced it to cut that estimate by 8 percent, or 300,000 bags, with the 2011/12 crop now expected to come in at 3.4 million bags.
Smaller and medium-size farmers who cannot afford expensive fungicides to treat the problem have been hardest hit.
"Last year there was a little bit, but this year all of a sudden: boom," said Luis Zelaya, a Guatemalan coffee grower whose farm is near the colonial city of Antigua, famous for growing some of the best coffee in the world.
Zelaya will see a 15 percent drop in production in 2012 at his medium-sized plantation because of the infection.
The more common type of leaf rust has existed in Guatemala for decades, but serious outbreaks have been rare.
Traditionally, leaf rust strikes coffee trees planted in low areas lying 1,300-2,600 feet (400-800 meters) above sea level. The mutant has now adapted to higher elevations and is reaching new heights in Central America, said Luis Osorio, technical secretary for Conacafe, Nicaragua's coffee council.
"We are seeing a mutation to a more aggressive variety of the fungus," said Tomas Nottebohm, president of Guatemalan coffee exporter Transcafe, who said the new strain may be resistant to standard fungicides.
Two years of heavier-than-normal rains in Central America created moist breeding grounds for the fungus, which can spread on trees once they are infected.
Osorio said Nicaraguan coffee farmers do not know whether the mutant form of roya has arrived at their farms since there has been no national study. However, they are worried about what is happening in Guatemala.
Neighboring El Salvador was battered by heavy rains last October, which knocked ripe coffee cherries off trees and hit production. Leaf rust so far is not a problem.
"For years, people haven't paid much attention to it because the frequency was mild and the incidents were low," said Juan Barrios from the Finca La Merced, an award-winning coffee farm near Guatemala City. "It's been building up to a perfect storm."
The rust produces spotted, yellow-orange stains on the coffee plants, making it easy to detect.
It can take up to three years to get rid of the disease with chemical treatment and if fallen leaves are left on the ground the rust can seep into the soil, causing longer-term damage.
More than a third of Carlos Torrebiarte's certified coffee crop is infected on his farm near Lake Atitlan, in western Guatemala. In the upcoming 2012/13 season, which begins next October, his yield will likely fall 30 percent.
Torrebiarte lacks the means to buy enough fungicide, which would cost him around $80 per 2.5 acres (1 hectare).
"We don't have the products or the tools to fight this disease. The country's small and medium producers don't know what to do," he said.
A strong leaf rust attack in Colombia in 2010 infested a third of that South American nation's crop, prompting growers to cut trees and replant with resistant varieties.
The world's No. 2 arabica producer missed production targets for three consecutive years due to the rust.
Losses in Colombia roiled international coffee markets scrambling for arabica supply and helped push coffee prices to a 34-year peak at $3.0890 per lb in May 2011.
Prices have since dropped about 40 percent, hitting a 19-month low at the beginning of the week at $1.7360 per lb, around levels that the market saw in the last half of 2010.
That leaves farmers with fewer resources to invest in chemicals to wipe out the pest.
The region's coffee associations will meet in El Salvador this month to discuss a 10-year, $3.3 million program to research new types of coffee more resistant to leaf rust.
Discouraged by piles of debt, higher production costs and drops in global coffee prices, few Guatemalan coffee farmers have the resources to plant new trees.
"At these prices, no one is inspired to plant more coffee," Anacafe's Villanueva said. "Since 2008, we have been stuck."