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The beans from Brazil

From the August 2017 issue.

Although Brazil controls much less of the global coffee industry than it did 70 years ago, shocks at the local level are still being felt around the world.

Brazilian coffee farmer

On the corner of a narrow brick street in downtown Santos, Brazil, sits a beautiful structure housing Museu do Café.

Even though the coffee museum welcomes about 300,000 visitors a year, it sees far less activity than it did nearly a century ago.

At that time, the museum was the official coffee exchange for the Brazilian coffee industry. As one of the main port cities for Brazil, a high volume of coffee was traded in the grand hall of the building, which still retains the wooden broker seating in an oval shape around the officiator’s throne.

Also intact is the massive stained-glass mural overhead, depicting the region’s transition from sugarcane to coffee and then the city’s vast expansion as the coffee industry proliferated. The stained-glass was idealised by painter Benedicto Calixto and executed by Casa Conrado.

Coffee first established roots in Brazil in the 18th century. By the mid-19th century, coffee had become the country’s number-one export, while the country had become the number-one global producer. Over the decades, as global production expanded and Brazil increasingly diversified its export markets,

Brazil’s contribution to the global coffee industry as a share of total production has steadily declined, though it still holds the number-one spot.

Today, Brazil produces about one-third of the global industry’s coffee, with the majority of exports going to the United States, the European Union (particularly Germany, Italy and Belgium) and Japan. Despite lower production in recent years due to severe drought that has affected most coffee-growing regions in the country, Brazil still far surpasses any other country’s coffee production.

As such, “Brazil has a high standard deviation, meaning any shocks to production have a major impact on the global industry,” explains Carlos Mera, Senior Commodity Analyst at RaboBank’s research arm. “You could almost ignore what’s happening in other regions and dedicate all your attention to Brazil.”

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