Environmental Risks Amid Growing Demand For Brazilian Coffee From China – CoffeeTalk

Brazilian businesswoman Carla Guindani has been exploring the Chinese market since 2018, when she was invited by ApexBrasil to exhibit family farming products at the Shanghai International Food Exhibition. This positive reception revealed the export potential of China, and Guindani founded Raízes do Campo, a company dedicated to structuring small farmers’ production chains and marketing products such as chocolate, honey, black pepper, and coffee on national and international markets. In December 2023, the company was authorized by the General Administration of Customs of China (GACC) to export green coffee, the unroasted, raw beans of the coffee plant. The authorization was renewed in July this year and is now valid for another five years.

Raízes do Campo is betting on specialty and certified coffees, such as organic and agroecological coffees. The company works with about 2,000 cooperative families in different regions of Brazil, exporting 120 tonnes of Arabica coffee annually to Chinese coffee shops interested in specialty beans. However, Brazilian coffee exports to China have more than quintupled in the past five years, from less than 10,000 tonnes in 2020 to more than 55,000 in 2024, with a peak of 79,000 in 2023. For now, China ranks 12th among the main markets, far behind leaders such as the United States and Germany, which each imported more than 440,000 tonnes last year.

The current trade war initiated by the US may change this scenario, as it has imposed a 50% tariff on Brazilian products, including coffee. Until 2024, the country had led coffee imports for seven of the 10 preceding years. In August 2022, when the measure came into force, purchases fell to their lowest level in a decade for that month, according to foreign trade data.

The Brazilian Coffee Exporters Council (Cecafé) states that the authorisation of new companies to export to China does not mean that the country will fill any gap left by the United States. The organization’s president, Márcio Ferreira, said the measure “does not necessarily imply an increase in shipments” and stressed this progress should occur “naturally, over the coming years and decades”.

Mariana Bahia, executive director of the Chinese Chamber of Commerce in Brazil, takes a cautious view, stating that Brazilian coffee is already establishing itself as a “strategic item” for diversifying commodities exported to China. However, she explains that the Chinese market is still emerging, and coffee is gaining ground among young urbanites in China who are interested in new products. Luckin Coffee, founded in 2017, is a symbol of this popularization, with more than 22,000 stores and a reported 2024 net revenue of USD 4.7 billion.

Brazilian coffee producers, including smaller companies like Camponesa and Quilombo Campo Grande, are excited about the emerging Chinese market. Camponesa has sent samples of its Guaií coffee to Raízes do Campo for testing in the Chinese market, with the beans supplied by its partner, Quilombo Campo Grande. Camponesa purchases 1,000 bags of Arabica coffee annually and allocates 10% of that volume to Raízes do Campo for sale in China.

Coopfam, a cooperative of family-run farms in and around Poço Fundo municipality, sends over 90% of its production to the United Kingdom, Germany, and Switzerland. To meet European buyers’ increasing sustainability requirements, its 500 coffee growers have acquired Fairtrade certification, which requires fair remuneration, agricultural practices that do not degrade the environment, and for each coffee batch to be traceable. 100 of these coffee growers also have organic production.

Coopfam began the process of qualifying for export to China in 2024, but Rodrigo Araújo, Coopfam’s commercial coordinator, believes that their socio-environmental certifications are unlikely to be an advantage because they were created in Europe for European consumers and are less valued by the Chinese. However, Bahia from the Chamber of Commerce states that Chinese coffee certification does include environmental requirements, such as the GACC setting maximum limits for pesticide residues and requiring exporters to use only approved inputs and follow proper cultivation and application practices.

A 2023 study found that after 2008, the region’s coffee production can be considered “deforestation-free” under European Union classifications, and that about a third of rural coffee farms had more native vegetation than what is mandated by the Brazilian Forest Code. Guindani from Raízes do Campo, which focuses on small-volume and agroecological exports, has been through this certification process, but she fears the growing Chinese demand represents a major environmental risk.

Araújo acknowledges that Coopfam would need to expand production to meet Chinese market demand, but believes that Brazilian legislation is sufficient to curb coffee-related deforestation. The Federal University of Minas Gerais (UFMG) noted that no significant deforestation had been detected on 99% of the 115,000 Minas Gerais coffee farms registered with Brazil’s Rural Environmental Registry (CAR) after 2008. Nascimento from Camponesa believes that it should not be necessary to open up new areas to meet Chinese demand, highlighting the Brazilian government’s plan to recover 40 million hectares of degraded pastureland over 10 years and make it productive, including for coffee cultivation.

Read More @ Dialogue Earth