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How Healthy Is The World’s Coffee Giant?

So runs Bob Hilliard and Dick Miles Coffee Song recorded by Frank Sinatra in 1946. Those billions have made Brazil the world’s largest coffee producer, followed by Vietnam and Colombia. Brazil, The Coffee Giant, outstrips them all. What happens to coffee in Brazil has an impact on the price and possibly the availability of all our coffees, whether Brazilian coffee or not.

If there is one single thing that the pandemic has taught us is that what happens in another part of the world can have a fundamental effect on us and the way we live. No matter how remote or far away from our day to day lives it may seem.

Coffee is the world’s most popular drink with two billion cups drunk each day. So, what happens to the health of The Coffee Giant, and those other major producers, will have a fundamental impact on our enjoying our favourite coffee.

Coffee isn’t indigenous to Brazil. She didn’t start off her love affair with coffee by being its number one producer. It first appeared from French Guyana and was planted and grown in the State of Para in 1727.  This was the time of the famous Portuguese Empire. Historians tell us it was a somewhat more enlightened administration compared to those administered by other European powers throughout South America.

The government of Brazil could see the how coffee drinking was taking off in the world around them. There were huge financial advantages of growing it and exporting it commercially. They looked at their neighbours and, to use a modern phrase, they wanted some of the action. But they were rebuffed.  The Governor of French Guiana refused to sell them coffee plants or raw coffee beans from which they could grow coffee plants.

Brazil’s opportunity to reverse this situation came when a border dispute between The French and The Dutch threatened to provoke a war. Both Guianas asked Brazil to act as a mediator.  Lieutenant Francisco de Melo Palheta was despatched as mediator. Little did they know he had a secret and more important mission! He must acquire and bring back raw coffee beans.

He succeeded in both parts of his mission. The border dispute was settled. And with the aid of The French Governor’s wife, whom legend has it he seduced, he managed to smuggle raw coffee beans out of French Guiana. The bouquet she presented him with was spiked with raw coffee beans and coffee was successfully grown in the state of Para.

By 1840, coffee accounted for 43% of Brazil’s exportable trade. Brazil has been by far and away the world’s largest coffee producer for the last 150 years. But when troubles come in Brazil they can send ripples through the entire coffee drinking world.

A number of factors came together to make coffee a success for Brazil. The climate and the soil were ideal for large scale coffee growing. Rainfall was good, and the soil, the product of volcanic eruptions during the earliest days of earth’s evolution was perfect. Vast areas of Brazil were devoted to the production of coffee which flourished in ideal conditions. The Government was enthusiastic and labour was plentiful. Plus the majority of people fell in love with coffee drinking. There was an immediate demand for coffee for home consumption as well as the external markets clamouring for supplies of coffee beans.

However, as the years went by, the world’s coffee giant would suffer terrible problems. Problems through over production and conversely, when the climate turned hostile. Devastating frosts would wipe out large proportions of the crop leaving the farmers with nothing to sell.

The farmers expanded their production. They believed that the golden years of bumper harvests and the world demand for coffee would go on growing year after year. They bought more land and grew more coffee until every warehouse was packed to capacity with coffee ready for export. In 1906 with prices at an all-time low, if the bumper Brazilian crop was released it would drive prices down to almost zero. The whole economy, depending so much on coffee, was in danger. Drastic action was needed.

To cope with the problem of overproduction, the state made itself the purchaser of the entire crop. The farmers were paid and the coffee held in specially constructed warehouses. The coffee was only released when the market demanded supplies. Interest rates were low and so the Brazilian economy was protected.

Unfortunately, the coffee farmers did not take the warning of over production seriously and diversify. The government was buying their coffee and in the following years, they continued to expand coffee production until every warehouse was chock full of coffee. The world market price crashed. An even bigger solution was needed to stop the price continuing to spiral downwards and Brazil’s entire economy going with it.

The situation demanded unprecedented action. It began in 1931 when the state began the destruction of millions of bags of coffee held in Brazilian warehouses. Coffee was burned. It fuelled railway engines, unsuccessful attempts were made to turn it into cattle feed, and to create a kind of plastic material. Coffee was taken out to sea to be dumped.

As I write this piece, I have a cutting taken by my father from The Daily Telegraph showing coffee being dumped into the sea. There is an armed policeman on board just to make sure that the procedure is completed. The cutting is dated 14th August 1937, a few weeks before I was born.  The practice of dumping coffee into the sea had to be abandoned. Authorities discovered the local population on the shore line gathering the raw beans, drying them and attempting to get them back into circulation. Burning ended in 1944. In fourteen years around seventy-eight million bags of coffee had been destroyed. Brazil has diversified its economy since the heady days when coffee accounted for fifty per cent of its total exports.

Was it the memory of Brazil’s benign weather turning hostile and the effects of the devastating black frosts destroying so much of the coffee crop, that encouraged the farmers go on planting coffee when they should have held back? Perhaps? Brazil’s black frosts can irrevocably damage the tiny plant cells of the coffee tree. As the sap freezes, massive areas of coffee can be destroyed almost overnight. The farmers livelihood wiped out not just for a season but for years. After experiencing some devastating frosts farmers gave up and harvests grew smaller. World markets have been spooked by news of the coffee giant overproducing and by the possibility that the coffee crop would be substantially smaller?

When I joined the company in July 1953, news of a frost in the coffee growing regions of Brazil had broken on the world coffee markets. But the markets at first did not believe it to be serious. Pundits said that Brazil was frequently talking disaster and we had heard it all before. But by the end of the year and the beginning of 1954, coffee prices on world markets were reaching unprecedented levels. Vast areas of coffee were destroyed. Consumers still remembered the burning and dumping of coffee and would not believe it could be serious.

Fact finding missions by the Brazilian authorities and the United States government came up with the figures that as much as twenty seven percent of all coffee trees in Brazil were destroyed. I remember the devastating frost of 1976/77 and the frosts and drought if 1994 when the coffee markets once again re-acted violently.

The World’s Coffee Giant is now at the centre of another crisis. The Coronavirus outbreaks in South America and its President questioning the seriousness of the Pandemic. Brazil is the second most affected country after the United States. Infection rates have been rising, and with them fears of an economic crisis. We hear of coffee farmers finding it difficult to get enough skilled workers because of local movement restrictions. In May, an important coffee growing region’s underfunded health system was on the verge of collapse. Though there is some positive news of vaccine tests being carried out on hundreds of Brazilian volunteers.

Our suppliers tell us there are ample supplies of coffee in the short term. The Brazilian Institute of Geography is forecasting a record coffee cop of around 57 million bags. We all find ourselves in a period of uncertainty. It may be that we have to wait until the early days of next year before the picture for Brazil becomes clearer.  The certainty is that the markets will be watching.

But all this is about much more than crop sizes or market prices or politics. It’s about people’s lives, and the lives and wellbeing of their families. We enjoy our cup of coffee because of the devotion and expertise of countless men and women who work in the global coffee industry. I fear that Brazil and its farmers may need a period of intensive care before it can be said that all is well with the World’s Coffee Giant.

With my very best wishes

Tony Higgins


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