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Brazil's coffee growers may face, another, exodus

Brazil's coffee growers, many of which have already relocated north to flee areas prone to frost, may undertake another, smaller exodus to cut the chance of falling victim to drought and heat, a leading coffee analyst said.

Carlos Brando - director at Brazil-based P&A International Marketing and consultant to the International Coffee Organization and the World Bank cautioned over the dent to Brazil's coffee growers from the prospect of an end to a period of depreciation in the real.

While the real in March hit a 12-year low of R$3.3162 to $1, boosting the competitiveness of Brazil's exports, such as coffee, it has since recovered to stand at R$3.04 on Friday, and "if current foreign exchange projections prove right" will stay around this level until the end of next year.

This means that "Brazilian coffee growers will progressively lose competitiveness as the cost of dollar-pegged fertilizers and agrichemicals rise", Mr Brando said.

"In the longer run, other costs, especially labour, [will also] escalate in an environment of a relatively stable real-to-dollar rate."

'Solution of last resort'

Growers have a "short-term window of opportunity" to improve their competitiveness through the likes of operational efficiencies, or investment in the likes of irrigation to boost yields, Mr Brando said.

"But if fails, there is a solution of last resort" for producers to boost their prospects to move to areas offering optimal growing conditions.

Shifts were not needed on the scale of the "macro-migrations" which took arabica growers from Parana in the south of Brazil, a state prone to frosts, to Minas Gerais nearer the equator.

Brazilian growers of the conilon robusta beans, meanwhile, are moving from their heartland of Espirito Santo further north into southern areas of Bahia.

'Micro-migrations'

However, growers might undertake "micro-migrations" into nearby areas, perhaps at higher altitudes, that offer better growing conditions.

These might even be areas that, "not long ago", were not ideal, perhaps being prone to frost, before climate change improved their coffee-growing credentials.

"Should one expect arabica [plantations] to move to higher areas and conilon to be planted in areas formerly occupied by arabicas?" Mr Brando asked.

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