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