Sao Paulo, Brazil — "There's an awful lot of coffee in Brazil," goes the old refrain. And even though Brazil is less dependant upon coffee export earnings that it once was, coffee is still big business here.
That's why this past winter's frost, which nipped millions of coffee trees in Parana, Sao Paulo, and Minas Gerais States, has caused Brazilians some anxious moments.
The early July frost, particularly in Parana State, which accounts for a quarter of Brazilian production, did considerable damage.
World coffee prices quickly went up 25 percent on first word of the frost, but they have now eased back to about what they were before the reports.
For one thing, damage to the 1981-82 crop, although severe, was less than originally estimated. Then, too, both Brazil and Colombia have enormous stockpiles of coffee in their warehouses which will soon be released to help keep the price of coffee on the world market low. Moreover, world demand for coffee seems to be slowing, particularly in the United States and Western Europe.
Thus, the price climb in mid-July, based on the cold weather snap in southern Brazil, now appears to have been little more than a tempest in a coffee cup.
These wintertime frosts, however, have been troubling Brazil's coffee industry for the past decade. A severe frost in 1975, damaging more than half of Brazil's coffee plantings, caused upheaval in the coffee industry here -- and sent world coffee prices soaring.
That earlier frost prompted many Brazilian farmers to switch from growing coffee to other crops. Further, a government effort to promote agricultural diversification for the past three or four years has had some success.
Moreover, there has been a major reorganization in Brazil's coffee industry, which has made the country's southern coffee plantations much more productive than before, garnering bigger yields on smaller acreage.