UPDATE 1-Guatemala says will leave the International Coffee Organization

(Adds quote from Guatemala government statement)

GUATEMALA CITY, July 2 (Reuters) - Guatemala has decided to leave the International Coffee Organization (ICO) as of the next harvest season, the Central American nation’s government said on Thursday, as it grapples with low prices that have made profits scarce for small farmers.

“The ICO... has not helped to adequately address the international pricing crisis faced by producer countries,” the Guatemalan government said in a statement.

The ICO said in response to reports on Wednesday of Guatemala’s decision to leave the group that it was not a market regulator, and urged Guatemala to stay in the organization and work with other members.

The ICO is a London-based coffee trade group that compiles data from its 49 member countries and hosts industry forums.

Guatemala said current prices do not align with the value of its coffee.

“In many cases, they don’t cover the production costs, generating losses that have severely affected living conditions for producer families,” the government statement said.

Guatemala’s coffee exports in the prior harvest season, which runs from October to September, brought in $663.62 million. In the current harvest season through mid-June, exports have generated $467.02 million. (Reporting by Sofia Menchu; Writing by Daina Beth Solomon Editing by Alistair Bell)