Rio, June 16, 2004 (Agência Brasil) - Brazil continues to lead the world coffee market in production and exportation, but it still faces the problem of the expensive "Brazil cost factor," which impedes better results in the sector. This is the judgment offered by the president of the Rio de Janeiro Coffee Trade Center (CCCRJ), Guilherme Braga, who is also director of the Council of Brazilian Coffee Exporters (Cencafe).

It is estimated that coffee exports will reach 11 million sacks in the first half of this year, growing to 15 million sacks in the second semester, for a total of 26 million sacks of exports this crop year. This corresponds to a 32% share of the world market. Overall production in Brazil, according to Braga, is expected to amount to 40 million sacks.

The president of the CCCRJ said that domestic production averages 45-50 million sacks per harvest. According to Braga, this year's production is down to 40 million sacks, because the price was not encouraging. But, in his opinion, the country is fully capable of turning out 45 million sacks annually, because it possesses advanced technology and higher productivity. For Braga, all that remains is for the price to be more attractive to yield better returns to the producers.

Braga recalls that the cost of logistics, related to movement of the product in the ports, is still high in comparison to other countries and constitutes the chief obstacle to the country's coffee activities. He pointed to the need for improvements in this area, as well as reducing bureaucracy.

The president of the CCCRJ recalled that to gain other market niches implies big investments in publicity and infrastructure to enable Brazilian coffee to compete for shelf space in foreign supermarkets with already established brands.

In addition to Europe, the United States, and Japan, traditional importers of Brazilian coffee, the Brazilian government and entrepreneurs are making an effort to expand exports to new markets, such as the Eastern European countries, which are considered potentially large buyers, Braga said.

Regarding China, Braga foresees an increase in sales over the medium and long run, but nothing that amounts to an explosion of demand, since the habit of drinking coffee still needs to be instilled in that country.

Reporter: Alana Gandra
Translator: David Silberstein