Brazil is currently the market leader in the production of instant coffee, but that position is being threatened by a shortage of coffee beans within the country coupled with a huge international rise in the cost of robusta beans.
The country has been hit by three years of severe droughts, leading to a drop in crop yields of robusta coffee beans by up to sixty percent for some coffee growers.
Brazil has had a strong position in the production and export of coffee since the nineteenth century, but the country is now considering importing beans. According to the director of the Brazilian Coffee Industry Association, Brazil has not imported significant quantities of green (unprocessed) coffee beans in the whole of its history of coffee production, although they have imported roasted and ground coffee.
Brazil does not have a ban on the import of coffee beans, but they have imposed a tariff of 10% on imported beans. The government may approve a temporary reduction of this tariff to 2% for the import of around sixty thousand tonnes of beans, however.
The Brazilian shortage of robusta coffee beans has seen the price rise dramatically to almost match that of the higher quality Arabica bean used for ground coffee. The price of robusta beans has also increased internationally, reaching a five-year high of $2173 per tonne on the London markets this month.
The coffee growers in Brazil are, unsurprisingly, very resistant to any import of coffee beans, fearing cheaper imports from countries such as Vietnam and the Ivory Coast. They fear a similar fate to the cocoa growers in Brazil, who struggled to recover after a series of poor harvests led to the importing of cocoa beans in the 1990s.
Even if the government approves the import of coffee beans in Brazil, coffee traders could remain reluctant to ship their product to a country where the import of coffee beans is controversial, and there is much support for the coffee growers.
But Mr Lima of Abics, the Brazilian instant coffee growers’ association, says that if the Brazilian growers want to remain competitive, then they should not fear the import of coffee beans.