How Brazil and Vietnam are tightening their grip on the world's coffee
Updated : 2019-08-22 13:50:06
A towering machine rumbles through the fields of Julio Rinco's farm in the Brazilian state of Sao Paulo, engulfing whole coffee trees and shaking free beans that are collected by conveyor belts in its depths. This automatic harvester is one of several innovations that have cut Rinco's production costs to a level that few who use traditional, labour-intensive methods can match. With increasing use of mechanization and other new technologies, the world's top two coffee producers, Brazil and Vietnam, are achieving productivity growth that outstrips rivals in places such as Colombia, Central America and Africa. They are set to tighten their grip. A plunge in global coffee prices in recent months, to their lowest levels in 13 years, has begun to trigger a massive shake-out in the market in which only the most efficient producers will thrive, according to coffee traders and analysts. Rival producers elsewhere in the world are increasingly likely to be driven to the margins, unable to make money from a crop they have grown for generations. Some are already turning to alternative crops while others are abandoning their farms completely. Such shifts are almost irreversible for perennial crops like coffee, as the decision to abandon or cut down trees can hit production for several years.