Brazil’s largest roaster looks to expand in other markets

Três Corações, Brazil’s largest coffee roaster with 27 per cent of the market, plans to expand in South America through acquisitions in Argentina, Chile, Uruguay, Paraguay and Bolivia, P&A Marketing reports in its February Coffidential newsletter. A joint venture between the Brazilian São Miguel and the Israeli Strauss groups, Três Corações has acquired eight coffee companies in Brazil since 2005. Bloomberg says the company has greatly contributed to consolidation in the national coffee market. Três Corações coffee sales reached US$ 1.3 billion in 2018. On the production side, prolonged drought has caused the abortion of coffee cherries in specific Brazilian regions, Revista Attalea Agronegócios reports. Research has confirmed that coffee trees lose leaves in productive branches and this causes the abortion process of fruits that are not hydrated after spending a long period under water stress and even with the occurrence of small amounts of rain. According to Cecafé, the Brazil contributed to 32 per cent of world coffee exports in 2019. Brazil exported 35.2 million bags in 2018, of which 31.5 million were green coffee, 15 per cent more than in the previous year. The largest buyers of coffee from Brazil in 2018 were the United States, 6.2 million bags, Germany, 5.6 million bags, and Italy, 3.1 million bags. China is proving to be a growing market for Brazil, with sales of the Veloso Green Coffee Company to the country growing 30 per cent per year, says O Estado de S. Paulo. CeCafé says revenue from China increased 143 per cent compared to 2017 to US$26.9 million compared to 2017. Coffee consumption in China rose from 300,000 to 3.8 million bags between 2008 and 2018, an increase of more than 1000 per cent, according to the United States Department of Agriculture. Conab expects Brazilian coffee production to reach from 50.5 million to 54.5 million bags in the 2019/20 crop. The volume may be 11.6 per cent to 18.1 per cent lower than the record 61.7 million bags registered in 2018/19. The decrease was already expected due to the off-year in the Arabica biennial production cycle, but the volume expected is high for a crop with this characteristic.