The Economics, Exportation & Fossil Fuels
of the Brazilian Coffee Trade
Economics
The growing popularity of Brazilian coffee over the decades has significantly impacted the country's economy and coffee companies. [2] Facing challenges in sourcing high-quality coffee to meet the demands of his business, Ernesto Illy introduced an innovative governance model in Brazil, leveraging the opportunities created by the sector's deregulation.
In 1991, the first coffee contest was held, and premium prizes were awarded to the finalists. This economic incentive encouraged Brazilian producers to supply high-quality beans for the company consistently. [2] Today, Brazilian Arabica coffee makes up over 60% of Illy's blend. This initiative demonstrated to producers, exporters, and industries that Brazil could produce exceptional coffee and set a new standard for quality.
[2] Since 2012, Illy has operated an integrated model, purchasing directly from coffee producers and maintaining its own trading and laboratory facilities for coffee quality analysis. The social sciences provide valuable insights into Brazil's nineteenth-century coffee-export economy. [4] Historical analyses of modern economic growth have thoroughly documented the advantages of the international division of labour, particularly during the rapid trade expansion of the nineteenth century. Trade played a key role as an "engine of growth" for the economic development of recently settled regions.
Exportation
[1] Increases in coffee output and/or the value of coffee exports result in a higher overall product, influencing various aspects of the economy, including income, government revenues, secondary and tertiary sector activity, investment, foreign exchange earnings, and imports. Researchers modelled the coffee sector and traced its connections to other parts of the Brazilian economy.
[1] Their findings suggest that the key linkages operate through 1) the effect of coffee production on demand for secondary and tertiary sector output; 2) the impact of coffee earnings—both wage income and non-wage receipts—on consumer demand; 3) the effect of coffee export tax payments on government revenues and, in turn, government spending for consumption and investment; 4) the influence of increased foreign exchange earnings (when the value of coffee exports rises) on imports and, subsequently, on capital formation; and 5) the effect of higher foreign exchange earnings on money supply and prices.
From a natural sciences perspective, understanding the growing, harvesting, and exporting of coffee beans in Brazil reveals key environmental and agricultural factors. [2] In 2015, Brazil harvested 43.2 million 60-kg bags of green coffee, with 32 million Arabica coffee and 11.2 million Conilon varieties. [2] The country has 2.3 million hectares of coffee cultivation and approximately 287,000 producers, predominantly small and family-run farms. With its vast size, Brazil boasts a variety of climates, landscapes, altitudes, and latitudes, making it possible to produce a wide range of coffee types and qualities.
Fossil Fuels
Brazil has a long-standing agricultural tradition and has been the world’s largest coffee producer for over a century. [3] This work explores alternatives for utilizing agricultural residues from coffee production, analyzing them from both environmental and economic perspectives. [3] When examining the energy potential from coffee husks (available energy) across Brazilian states, the total amount of power produced is estimated at 54,333.9 kW. However, it is important to note that this power could only be generated if all of the country’s coffee waste were directed to a single electricity production plant. This scenario would not be practical in reality.