Isaura Daniel
São Paulo – The Arabs are drinking more Brazilian coffee. When compared to 2003, Brazilian exports of green coffee to the region rose 94%, in revenues, and 36,4% in volume shipped. The Arab population consumed 853,000 bags of Brazilian green coffee, expenses of US$ 59.2 million with imports, or an increase of US$ 28.8 million when compared to the previous year. The figures do not include sales of soluble coffee, which is traded in the industrialized form.
The growth in sales to the Arab countries was well above the total growth of exports of Brazilian green coffee, which rose 2% in terms of volume and 31.6% in terms of revenues. If soluble coffee is added, the figures do not change much. Brazil had revenues of US$ 2.02 billion with exports of all kinds of coffee in 2004, a figure 31.4% greater than in 2003, and traded a total of 26.4 million bags, or 2.8% more than in the previous year.
The Arab country that bought the largest volume of Brazilian green coffee was Syria, followed by Lebanon, Tunisia, Jordan and Algeria. Other countries that bought the product include the United Arab Emirates, Egypt, Saudi Arabia, Libya, Morocco, Kuwait and Oman. "Brazil has traditional buyers in Lebanon, Syria and Egypt," stated the director general of the Brazilian Coffee Exporter Council (CeCafé), Guilherme Braga.
The Council directory believes that the expansion in sales to the region should continue in 2005. "We may sell more to the Arab market, which has an enormous potential. The Arabs like coffee," stated the president of the CeCafé Deliberative Council, João Antonio Lian.
Braga explained that a large part of sales to the Arab countries take place through European companies. Some of the consumers of Brazilian coffee in the region, as is the case of Syria, have trade agreements with the European Union, a fact that simplifies trade relations and also export financing.
The volume sold to the Arabs, however, is still very low when compared to total Brazilian green coffee exports. The Arabs purchase just 3.6% of the total traded by the country on the foreign market. Participation, however, has already grown in relation to 2003 when the region purchased 2.7% of the volume sold by Brazil on the foreign market. The greatest buyers of Brazilian coffee on the foreign market are Germany, the United States, Italy, Slovenia and Belgium.
Price on the rise
The good figures for export of Brazilian coffee in 2004 are attributed mainly to the price increase. This is so true that the growth of revenues was well above the volume traded. This, according to Braga, should continue in 2005. CeCafé forecasts a 25% increase in the price if the commodity in the first half of this year, when compared to the second half of 2004. "There has been a reasonable balance between world production in the last two years and this good relation should continue in the short term," he explained.
CeCafé forecasts 17% growth in coffee export revenues, including green and soluble, but a 12% drop in volume. One of the reasons for this drop is the lower crop estimated by the Brazilian government. The National Food Supply Company forecasts a drop in the Brazilian coffee crop from the 38 million bags in the 2004/05 harvest to between 31 and 33 million bags in the 2005/06 crop, as coffee farming is cyclic.
Due to the price increase forecasted, however, exports should continue high and may even compensate part of the revenues that Brazilian agribusiness will have with soy, which is the main product in the Brazilian export basket, due to price reductions last year.
Among the new markets to be explored by Brazilian coffee this year, according to the executive director of the Brazilian Instant Coffee Association (Abics), Mauro Malta, are the new members of the European Union. Producers also tried to expand the 8,700 tonne tariff-free quota guaranteed to Brazilian coffee sold to the block, due to the entry of ten new countries, but they had no success.
According to Malta, the European Union wants the topic to be included in their negotiations with the Mercosur. The volume that is sold above the quota currently has a surcharge of 9% on entry into the bloc.
Largest exporter in the world
Brazil is currently the largest coffee exporter in the world and answers to 29.3% of global trade of the product, following Vietnam, Colombia and Indonesia. Even if Brazilian exports drop in 2005 in terms of volume, the country will continue leading the world market. Vietnam, which is in the second place, sells 14.8 million bags, 10 million less than Brazil.
