Frosts Heat Up Demand for Colombian Coffee : Agriculture: Damaged crops in Brazil mean a boom for other growers after four years in the red.

Two bitter freezes in Brazil have pulled this country out of a four-year crisis and pushed it toward what could be one of the greatest coffee booms in its history.

Coffee growers in this Andean nation, which produces more coffee than any other except Brazil, have suffered through four years of low prices. But they have watched their prospects soar since frost hit Brazil on June 27.

A more brutal cold front struck Brazil’s most productive coffee district July 10, and experts here estimated losses at 40% to 50% of Brazil’s 1994-95 harvest.

With coffee prices skyrocketing in world markets, Juan Manuel Santos, Colombia’s minister of foreign trade, predicted a bonanza not seen since the mid-1970s. The National Federation of Coffee Growers announced the second increase in a month in the price it pays suppliers, to $199.08 for a 125-kilo load from $173.43.

“This is a happy end, after four hard years and complicated negotiations” between the government and coffee growers, said Jorge Cardenas Gutierrez, general manager of the coffee federation.

Finance Minister Rudolph Hommes exulted: “The Virgin has now appeared to us twice.” He was referring to the most recent price rise and to more gradual increases over the last 60 days that resulted from a six-month retention plan led by Colombia, Brazil and Central American nations seeking to control export sales and force prices up.

Colombian growers, who have been operating in the red, are feeling relief. Since the International Coffee Agreement--which set world export quotas and kept prices relatively high--expired in 1989, prices had nose-dived to 55 cents a pound from $1.40.

Coffee had represented prosperity otherwise unavailable in rural Colombia. Towns and municipalities accustomed to having access to roads, telephones and electricity went into a tailspin. Coffee growers, accustomed to the nation’s highest standard of living, despaired of their futures.

Since the crisis in Brazil, which supplies about 22% of world coffee demand, the U.S. Department of Agriculture estimates that demand will exceed supply by 9 million sacks next year.

Experts predict that Colombian coffee prices could exceed $3 a pound before year’s end. Government planners here have stopped talking about keeping coffee growers afloat and started worrying about inflation from the foreign earnings the boom is expected to generate.

Still, most growers do not expect immediate recovery. Many farms are deeply in debt, and many are fighting a rear-guard action against the coffee borer, or la broca, an insect that invaded plantations in 1993 and can now be found on 40% of Colombia’s 2.7 million acres of coffee land.

“The crisis hit us very hard,” said Alexander Garcia, a third-generation farmer who sold vehicles and apartments to keep his 87-acre plantation going in the face of heavy losses last year. “We’ve lost a lot of money and still aren’t being paid what a shipment of coffee is worth.”

This year’s production of 11.5 million sacks is far short of last year’s harvest of 15 million sacks, because many growers have cut back. And while growers are trying to increase production to take advantage of the rising prices, they are wary of the pitfalls of a boom and the dangers of triggering another price drop.

“If prices rise too high and production soars, we could saturate the market again and cause prices to slump,” said one official of Colombia’s coffee federation, who estimated the ideal harvest at 15 million sacks.

“Excessive prices could also diminish consumption, which would be against our interests.”