The world's largest coffee exporter is going to import coffee. What's going on?

Mention Brazil, samba, carnival and, of course, coffee.

With its unique geographical location and natural conditions, coupled with hundreds of years of coffee cultivation history and traditional skills, Brazil has always occupied the top export position in the world coffee market. But now that things have changed, they are also thinking about importing coffee.

The export volume of Brazilian coffee has always been unmatched by other regions. For 2016 alone, the top five exporters were Brazil, Vietnam, Colombia, Indonesia and Honduras. Among them, Brazil accounts for 15% of the world's coffee exports.

Exports are based on production, and Brazil also leads the world in coffee production. The top five countries in global coffee production in 2016 are in line with their exports, with Brazil and Vietnam firmly in the top two.

Now, Brazil wants to import coffee, and the preferred source is Vietnam. Brazilian coffee companies hope to import coffee beans from Vietnam to meet their production needs. Vietnamese coffee is good and cheap, and more importantly, it has a stable production, and the variety is in line with the shortage of Brazilian coffee varieties: Robusta.

Robusta and Arabica are the two major varieties of coffee in the world, and the ratio of them has been stable at about 4:6 for a long time. The main difference between the two lies in particle size and growth position. Arabica is a variety of Starbucks raw materials with high mountain beans, small grains and low caffeine content; Robusta is low mountain beans, medium grains, high caffeine content and "strong". It is also the raw material variety of Nestl é instant coffee and many coffee products manufacturers in Brazil.

In Brazil, both varieties of coffee are grown, with Arabica growing over a larger area along the south-eastern coast of Brazil, while Robusta is mainly concentrated in ESP í rito Santo and Rond ô nia. The Alabica growing area is in good weather this year, but the Robusta growing area is not so lucky.

Production of Brazil's Robusta has fallen sharply recently because of days of drought. And this is not a short-term phenomenon. Brazil's Robusta coffee production has also experienced an overall decline in recent years. Since 2009, production has peaked at 1300 million bags (60 kg bags). In a normal year, Robusta's production has been stable at around 1100 million bags, while at the end of 2016, Brazil's Robusta production reached its lowest level in 12 years, producing only 8 million bags, which is difficult to meet demand, resulting in a continued rise in the price of raw beans in Brazil.

According to the official forecast of the Brazilian government, Robusta's annual production this year will maintain an annual growth rate of 21%, but the total production will still be below the all-time high. As a result, Temer's government intends to introduce foreign coffee, which has also caused different voices in Brazil.

Brazilian coffee product processors welcome Vietnamese coffee. For a long time, they are subject to local protection policies and can only use local Robusta as raw materials to make instant coffee. Now, once they liberalize the import of coffee raw materials, they have more choices. The use of lower-priced Vietnamese raw materials can also save costs.

But Brazil's local Robusta growers have expressed their dissatisfaction through various channels, saying repeatedly that they can complete the annual production as planned and will guarantee "the same price as Vietnamese coffee."

In a report earlier this year, Evair Vieira de Mello, a member of the Brazilian House of Commons representing ESP í rito Santo, the main producer of Robusta, told the Financial Times that the government's forecast of the inventory of Robusta in Brazil (less than 2 million bags) was wrong and that the actual inventory was 4.4 million bags, enough to supply the market.

The exchange of voices has intensified, and the Temer government, which is in a whirlpool of government trust, has not yet made a final decision. But there is a precedent for similar incidents. Last year, the Brazilian government granted a small authorization to buy coffee beans from neighboring Peru, but quickly cancelled it under pressure from local growers.

What will happen this time will only be revealed in time.

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