How To Export Coffee From Brazil to the European Union
Brazil is the largest producer and exporter of coffee in the world. The region that imports the most coffee from Brazil is Europe. In this article, we will learn how to export coffee from Brazil to Europe.
Market Size
According to the Ministério da Agricultura, Pecuária e Abastecimento, which is Portuguese for Ministry of Agriculture, Livestock and Supply or MAPA - Brazil produced more than 45 million sacks of coffee in 2014. Although this was a slow year compared to 2013 when Brazil produced more than 50 million sacks of coffee, it is still an impressive figure, representing 32% of the world production of coffee.
According to Conselho de Exportadores de Café, Portuguese for Council of Coffee Exporters - CECAFÉ - Brazil exports the majority of the production - more than 36 million sacks of coffee were exported in 2014.
Coffee is Brazil’s sixth most important agribusiness export, in terms of revenue, trailing only to soy products, meat, sugar, ethanol industry, forest products, cereals and flours. Coffee exports accounted for more than USD 6,8 billion in 2013.
According to the Brazilian Ministry of Development, Industry and Foreign Trade, MDIC, eight out of ten of the largest importers of coffee from Brazil are from the European Union. The top 10 importers of Brazilian coffee in 2013, in terms of revenue, were:
- United States - USD 884 million
- Germany - USD 859 million
- Japan - USD 454 million
- Italy - USD 454 million
- Belgium - USD 358 million
- Spain - USD 117 million
- Sweden - USD 106 million
- France - USD 102 million
- United Kingdom - USD 97 million
- Republic of Slovenia - USD 91 million
Thus, the exports for countries that are part of the European Union that rank in the top 10 importers of Brazilian coffee accounted for nearly USD 2,2 billion in 2013. The EU region is an interesting market for Brazilian coffee exports and the future scenario looks promising. Between 2012 and 2013 Brazilian exports of coffee to Europe grew 9%.
It is also worth mentioning that the European Union has the highest consumption per capita of coffee in the world. The European Union consumes 2,5 million tons of coffee per year, which is equal to 4 kilos of roasted coffee per person.
How to export from Brazil
In order to perform any foreign trade operation, the exporter must first be registered with Secex, the Secretariat of Foreign Trade, through Siscomex, the Foreign Trade Integrated System. However, before being able to access Siscomex, the exporter will need a Radar license - a license granted by the Receita Federal do Brasil, which is the Brazilian Federal Revenue Service.
Getting a Radar License
There are two different types of Radar licenses:
- Radar Pessoa Jurídica
- Radar Pessoa Física
The Federal Revenue Service defines the financial capacity of a legal entity through an analysis made every six months, and through this analysis, the Federal Revenue Service decides on which type of license it will grant to the legal entity.
There are three different types of Radar Pessoa Jurídica.
The Limited Radar, which is valid for legal entities with a financial capacity of less than USD 150.000.
The Unlimited Radar, which is valid for legal entities with a financial capacity of more than USD 150.000.
The Express Radar, which is valid for the following entities:
- Legal entity formed as a joint-stock company, with shares traded on the stock market or over the counter market, and its wholly-owned subsidiaries
- Legal entity authorized to use the Despacho Aduaneiro Expresso, which is Portuguese for Express Customs Clearance
- Publicly owned company or mixed capital company
- Entities of direct public administration, autarchies and public foundations, autonomous public agencies, international organizations and other extraterritorial institutions
- Legal entity that intends to operate exclusively in export operations
It is noteworthy to mention that all legal entities performing only export operations can qualify for the Express Radar license, without need of fiscal analysis that would otherwise be demanded if the entity also performed import operations.
Siscomex
Siscomex is a computerized system available via this link, and responsible for integrating information on foreign trade operations such as:
- Registry
- Follow up
- Control
Siscomex allows users to promptly keep up to date with cargo entering and exiting Brazil, since intervening agencies that may take part in any foreign trade operation are able to, at various stages of the operation, control and interfere in the process of the operation. Through Siscomex itself, the exporter can exchange information with all intervening agencies for authorization, if applicable, and supervision.
Necessary documentation
Once the exporter is registered with Siscomex and can engage in foreign trade, some documents are required.
The first one is the Registro de Exportação, which is Portuguese for Export Registry or simply RE. The RE states the commercial, financial, exchange and tax information which will characterize the export operation, defining its customs treatment. This document must be registered with Siscomex. For exports under USD 50.000, a Declaração Simplificada de Exportação, which is Portuguese for Simplified Export Declaration or DSE, must be completed instead of the RE.
In order to complete the customs clearance process for the export of goods, the following documents must be sent to the Federal Revenue Service for analysis and must accompany the goods until their customs clearance abroad:
- Export Contract
- RE or DSE
- Registro de Operação de Crédito, which is Portuguese for Credit Transaction Registration, for exports that will be paid over a period longer than 360 days
- Registro de Venda, which is Portuguese for Sales Record, a document required for when commodities are sold
- Commercial invoice
- Declaração de Despacho de Exportação, which is Portuguese for Declaration for Export Clearance, a document based on the RE or DSE
- Packing list
- Bill of lading
International Requirements
An agreement by the International Coffee Organization requires that all coffee exports must have a certificate of origin. In Brazil, MDIC is responsible for issuing the certificate of origin for coffee.
European requirements
The European Union, EU, has several requirements for imports.
Sanitary and Health requirements
In order to ensure that food imported to the EU is safe and free from toxins, these imports should comply with the EU food safety standards and respect the maximum level of contaminant per product. Coffee cannot be exported to the EU if it presents residues of pesticides exceeding the maximum levels permitted, thereby posing an unacceptable risk to humans.
All health and safety requirements by the EU can be found in this link. The code for coffee is 0901, with different varieties of coffee which can be chosen.
Labelling requirements
The EU requires that food labels are informative enough to allow consumers to easily identify the main benefits and possible side effects that may arise from the consumption of a food product. Thus, all food labels must display the following information:
- Trade name of the product or description of the food product. Trademarks and brand names can only be used in addition to the trade name or description, never alone. The food product’s physical condition and the treatment under which it was submitted - for example if it was roasted or if it is soluble - must also be included
- Name and address of the manufacturer or packager, or of an EU-established seller
- Net quantity
- Ingredient list. Substances that may cause allergic reactions or intolerances must also be indicated
- Origin
- Any special conditions for conservation or use
- Expiry date, preceded by the words "best before"
- Number of batch, in the case of pre-packaged food
- Preparation instructions
Also, the label must be visible and easy to understand. It must appear in a language that is easily understood by European consumers. Normally, this means the official language of the European country in which the product will be commercialized, but additional labels in other languages may also be present.
Other specifications apply for different types of coffee and must be present on the label. For coffee extract, for instance, soluble or instant coffee, labels such as “Coffee extract©”, “soluble coffee extract©”, “soluble coffee©” or “instant coffee©” mean that the package contains the concentrated product obtained from the extraction of roasted coffee beans, by the use of only water. Also, the term "concentrated" may only appear on the label if the coffee extract is more than 25% by weight, while the term "decaffeinated" must appear if the caffeine content is less than 0,3% by weight of the coffee extract.
In the case of solid or paste coffee extract, the dry content must not be less than 95% of the weight for dried coffee extracts, and between 70% and 85 % of the weight for coffee extract paste.
In the case of liquid coffee extract, the dry matter content must be between 15% to 55 % of the weight in the liquid coffee extract. If the product contains sugars, whether or not roasted, the proportion should not exceed 12% of the weight and the label must include the terms “with”, “preserved with”, “with added” or “roasted with” followed by the name of the types of sugar used.