Brazil coffee producers could
hold back 8m bags
BRAZILS coffee producers should be able to hold back as many as 8 million 60kg bags from sale due to government harvest financing, according to Banco de Brasil.
Brazil is now harvesting and shipping its 1998-99 crop, which at an estimated 35m bags should be the largest for 10 years and a sharp improvement from the 23m-25m bags produced in 1997-98. The government hopes to maintain prices by spreading sales out over the year.
The bank will finance up to 70% of the average internal price of the previous month, on which interest would be payable. No trigger price is in effect. It gave no timeframe for the retention.
Last week, Brazils National Monetary Council cut the financing rate for farmers to a fixed 9.5% from the variable rate of 14%, in a move to promote stock retention.
- Financial Times 06/08/98 page 36 (News Digest)