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EU – Mercosur Trade Deal is expected to benefit Brazilian coffee growers

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MILAN – The EU – Mercosur Trade Deal, signed in June 2019, is expected to benefit Brazilian coffee producers. According to the Brazilian Coffee Exporters Council (Cecafé), about 17.9 million bags (47.9% of the total), up 13.8% on year, were shipped to the European Union during the January – November period: Germany, Italy, Belgium, France and Spain were the main destinations.

In 2018, Brazil, a world leader in the coffee industry, produced 61.7 million 60-kg bags of coffee, of which thirty-six million were exported, mostly as green coffee, resulting in US$ 5.15bn in revenues. Following the EU-Mercosul Trade Deal Brazil’s exports are set to grow considerably.

The European Union was the second largest destination for Brazilian instant coffee exports in 2018 (466,000 60-kg bags), losing out only to the United States (644,000 60-kg bags). Abics (the Brazilian Association of the Soluble Coffee Industry) projects a 35% growth in export volume over the next five years.

According to the agreement, a substantial percentage of EU green coffee imports for roasting (40%) and of soluble coffee (40% to 50%) must come from Brazil. This will allow Europeans to sell roasted and soluble coffee to Mercosul countries tax free.