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 Brazilian Ministry of Agriculture, Livestock and Supply forecasts show that by 2014 the world will be consuming 144.6 million bags of coffee, against the current 118.9 million. This means that, in the period, global coffee consumption is going to grow on average 2% a year. In Eastern Europe and Russia, consumption has been growing 3% a year, and in Brazil the growth has been 4%.
And specialists in international consumption understand that in 2014 Brazil should answer to at least 30% of global coffee exports. This means that over the next decade, foreign sales of Brazilian coffee should exceed 43 million bags. Last year, exports totaled 27.2 million bags to over 70 countries. The minister of Agriculture, Luis Carlos Guedes Pinto, pointed out the importance of the coffee productive chain to Brazilian agribusiness and recalled that, in 2006, coffee exports totaled US$ 3.3 billion - growth of 14.8% when compared to the previous year. And, in terms of revenues, coffee sales should continue growing for at least the next three years. "Good coffee prices, both on the domestic and foreign market are making coffee farmers increase the average productivity of their crops. In some producer regions, coffee farmers are renewing their crops. Therefore, to continue leading the coffee export market, the Brazilian government and private organizations are doing their homework. The intention is to answer to the growing global coffee demand, guaranteeing the Brazilian leadership in the market that has an annual turnover of US$ 91 billion," stated the minister. One of the most recent measures taken by the federal government, to result in greater stability and income for the sector, was the decision to simplify the operations of the Funcafé, a fund turned to the coffee sector. That is, the National Monetary Council (CMN) made use of the proposal made by minister Guedes Pinto to include lines of credit for production expenses, harvest, storage and Financing for Coffee Purchase (FAC), in the Funcafé. According to Guedes Pinto, this, in practice, means that "starting now, this measure does not need to be submitted to the CMN, which will permit Finance and Agriculture ministers to add to and relocate the volume turned to the four lines of credit forecasted in the budget, currently at US$ 9.9 billion." "With this measure it will no longer be necessary, with each harvest, to present to the CMN the lines of credit for coffee farming. This will reduce the bureaucracy in the decision-making process, making the financing available to the sector at the most opportune moments." In the market's opinion, this reduction of bureaucracy in credit should give farmers greater security, as they will have funds to invest in their own activity, improving the cultural understanding of the crops and, consequently, the average productivity of coffee farms. Another factor stimulating producers was the CMN decision of maintaining minimum prices for the 2006/2007 crop, US$ 74 per 60 kilogram bag of Arabica coffee, and US$ 42 per bag of Conillon. With regard to the future of Brazilian coffee farming, some bet that the country can even expand to as much as 35% is participation in the global coffee market. According to exporters. Brazil is the only coffee producer with chances of offering the drink for all tastes. This fact, according to them, grants the country an advantage among consumers. "With a diversified coffee production park, which makes it possible for the country to produce both Robusta and Arabica coffee, we may supply coffee to all of the countries of the world," guaranteed the former president of the Brazilian Rural Society (SRB), Luiz Haffers, one of the greatest Brazilian coffee producers. In fact, today 25% of the Brazilian coffee production is of the Robusta variety and 75% of Arabica. In the understanding of the director general of the Brazilian Coffee Exporter Council (CeCafé), Guilherme Braga Abreu Pires, to accompany the growth of global coffee consumption, keep and maintain the current 30% share of the global market and answer the growing domestic demand, which should reach 20 million bags per year, Brazil will have to increase the production to 60 million bags a year. "With a coffee crop of 6 billion trees and an area of 2.2 million hectares, Brazil will have to increase the average number of bags of coffee produced per hectare. This average is currently between 19 and 22 bags per hectare and should grow to 28 bags per hectare. This is very possible when considering the excellent advances that are being made in Brazilian research," he stated. In the evaluation of the market, if the perspectives for the medium and long-term are making Brazilian coffee exporters and producers optimistic, in the short term they are all gleeful. And with good reason, as forecasts show that revenues generated with foreign sales of coffee are going to continue growing in coming years. And the reason for this is that there is a balance between offer and demand for coffee on the market. "In practice, this means that the world finds itself closer to a scenery of lack of coffee than to one of excess, which explains the good prices reached by the product on the foreign market," explained Guedes Pinto. In fact, for a global consumption of 118.4 million bags, production of coffee in the 2005/2006 crop was 122 million bags. When considering that global stocks (carry-over), including the Brazilian, total 31.9 million bags, it is not hard to see that the market works with tight margins when faced with the growth of global consumption of the drink. In the face of this situation, exporters and managers of cooperatives believe that the prices of coffee will continue firm. There will not be an explosion of coffee prices, but the tendency for this year is for a 10% to 15% increase in comparison to the price last year. And high international prices are also due to the fact that there is going to be a drop in the next Brazilian coffee crop. To the former minister of Agriculture, Livestock and Supply and current coordinator of the Agribusiness Center at Getúlio Vargas Foundation (FGV - one of the foremost Brazilian universities), Roberto Rodrigues, the sector's optimism is based on real factors. "All you have to do is observe the appreciation of the price of the bag of coffee, which in 2003 cost US$ 50 and now costs, on average, three times this value. That is the result of a political base that we have been working on over the last four years: including a financing policy and storage to make offer grow at lower levels than demand," explained Rodrigues, recalling that in 2003 alone the government bought over one million bags of coffee. "We also worked on a policy of renegotiation of producer debts, sold more than half the coffee stocks we inherited from the Brazilian Coffee Institute (IBC - from the 1980s) - thus increasing the volume of funds in the Funcafé. We also invested heavily in the promotion of Brazilian coffee." To Rodrigues, the scenery has improved very much in recent years. But, he warns that if Brazil wants to consolidate itself as the greatest producer of coffee in coming years and supply the global and domestic demand, it will be necessary to invest in three fundamental aspects: finding mechanisms to reduce producer debt - which is still the weakest link in the chain -, expanding negotiations with sales of roasted and ground coffee and, finally, permitting farmers, through cooperatives, to negotiate directly with buyers and, preferably, process their coffee. "And it is necessary for farmers to continue investing in technology, in the same way as it is important for the Genome Project to advance and bring new kinds of coffee, more resistant to rust, tolerant to drought, etc," recommends the former minister, adding that investment in roasted and ground coffee is the main aspect. This is because Brazilian coffee needs more added value. "While investment is not made in this sector, Germany and Italy will continue exporting coffee without planting a single grain - which is not possible," stated the former minister. Débora Rubin and Geovana Pagel also contributed to this article. Anba - www.anba.com.br
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Thus assuming you keep your 30 % market share, your overall production should be 43/44 millions bags, not 60 millions as said.
60 miilions bags represent 42 % of the world consumption.
Therefore, unless the article meant that it is 144,6 millions bags EX-Brazil consumption, something is wrong...in the above maths.
Lets face it if the consumption difference will be around 26 millions bags (144,6 - 118,4) and assuming Brazil will be at 30 or 35 % market share, this would need an additional 7,8 to 9,1 millions bags.
Finally on the minimum price. Is Brazil not vehemently against agriculture subsidizes ??????
Ohhhh...I see....you are against the subsidizes only when others do it, but NOT when Brazil does.
Afterall you produce "only" around 30 % of the world production. What about the other producing countries, mostly poorer than Brazil ?????
Dont you do exactly the same with coffee, than your critics against the EU/USA and their grains subsidizes ?????
Strange isnt it ? Without the Brazilian subsidizes, your country would produce less coffee thus allowing poorer countries to produce and export more ! Correct ?
Is this not the Brazilian theory.....concerning the grains ?
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