Decline in global market share
Revenues from the coffee industry drove the Brazilian economy until the Great Depression in the 1930s,when the price plummeted from 22.5 cents per pound in 1929 to 8 cents per pound in 1931.The tax revenues generated by tariffs provided the vast majority of the money used to build roads, ports and communication systems and allowed for Brazil to maintain a positive trade balance.
The southeast plateau between São Paulo and Rio de Janeiro is the site of the Paraíba Valley, the once prosperous but recently abandoned coffee lands. The soil there is red and highly productive, it would go on producing coffee for 30 years, while other soil did not last more than 25 years. It is called terra roxa in Portuguese (English: purple soil) because Brazilians heard Italians call it terra rossa (English: red soil).
In the 1920s Brazil was a nearly monopolist of the international coffee market and supplied 80% of the world's coffee.The country's market share has steadily declined since the 1950s as global production has risen. As late as 1960 coffee still accounted for 60% of Brazil's total exports and the country remained dependent on the single crop despite decades of industrialization with support from the government.This number was as high as 90% in some years of the 19th century.
1990s deregulations
Vertical coordination changed in the 1990s following the deregulation of the coffee market in 1990. Up to this point the industry had simply neglected quality control management because government regulations favored scale economies. As a result coffee processors begun exploring higher quality segments in contrast to the traditionally lower quality.
