SAN PEDRO SULA, Honduras—The coffee equation in Central America has changed.

This year, Honduras passed Guatemala as the top coffee producer in Central America, the region that produces the bulk of the world’s washed arabicas, the most expensive and sought-after coffee beans, which are used in gourmet blends. Honduras’s harvest this season was 3.8 million 60-kilogram bags of coffee, compared with 3.5 million bags for Guatemala.

While Colombia remains the world’s top single producer of washed arabica, the rise of Honduras provides the global coffee market with another top player, and a boost for the impoverished nation’s economy.

For Honduras, a poor nation known more for coups than coffee, besting its neighbor is sweet vindication. That’s because for years, many Honduran coffee growers smuggled their beans to Guatemala, where they would fetch a higher price due to Guatemala’s reputation for quality coffee.

Call it one of the dirty secrets to the coffee trade: Some of Guatemala’s beans were actually grown in Honduras. As Guatemala’s coffee commanded ever higher prices, it only encouraged more smuggling, creating a vicious cycle for Honduras’s coffee industry.

“We’ve actually had bigger harvests than this, but it never showed because of how much coffee was getting smuggled,” said Jorge Alberto Lanza, president of the National Association of Honduran Coffee Producers.

Follow this link to read more: