Brazil May Offer Subsidy to Arabica Coffee Growers

By Carlos Caminada and Shruti Singh

April 22 (Bloomberg) -- Brazil, the world's biggest coffee producer, may give arabica growers a subsidy at government-run auctions this year to ensure a minimum price after the harvest starts in June.

The government may decide as early as April 29 on the values and amounts for the subsidized sales, Lucas Tadeu Ferreira, director of the Agriculture Ministry's coffee department, said today in a phone interview from Brasilia.

The auctions, where Brazil gives farmers the difference between a minimum price and the amount buyers offer to pay, may help bolster coffee after farmers start harvesting a bigger crop than last year. The plan encourages farmers to hold on to their coffee until the auction, preventing excess supply from pushing prices down.

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Brazil Coffee Crop to Rise Less Than Forecast on Rain

By Carlos Caminada and Andre Soliani

Jan. 8 (Bloomberg) -- Coffee output in Brazil, the world's biggest producer of the commodity, will rise less than analysts expected after scant rainfall hindered flowering.

Production will rise to between 41.3 million and 44.2 million bags this year from 33.7 million bags in the previous May-to-October harvest, the Agriculture Ministry's stockpiles agency, known as Conab, said today in a report distributed in Brasilia.

Below-average rainfall from August to October in Minas Gerais state, which accounts for about half Brazil's output, prevented trees from flowering properly. Output will still rise from last year because Brazilian coffee trees entered the better- yielding half of a two-year cycle.


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ICE Coffee Review: Eases; Brazil Rainfall Monitored

INO News

Pit-traded arabica coffee futures ended lower Friday on ICE Futures U.S. after speculators took profits when origins clipped a rise through Thursday's high, brokers said. Brazil's weather outlook has improved with rain in the forecast, but it's unclear if the nation will get enough moisture for a successful October-November tree blossoming.

ICE pit December closed 40 points lower at $1.25 a pound after an early rise to $1.26.

"Speculators did some selling today and the screen weakened after the pit closed, but it's in much lighter volume than yesterday," a New York desk manager said. "No one can make any pronouncements about Brazil's crop yet because we don't know how much rain they'll get. I've seen pictures of trees that look good and pictures that look bad."

Meanwhile, a growing portion of Brazil's coffee production is irrigated - possibly as much as 30% of groves, he estimated.

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Coffee soars as rain slows in Brazil

By Andres R. Martinez
Bloomberg News

CHICAGO: Coffee rose to the highest price in 30 months as forecasts for dry weather in Brazil, the largest producer, renewed speculation that crops might be damaged by a prolonged period of below-normal rainfall.

No significant rain is expected to fall in Brazil's major coffee-growing states of Minas Gerais and São Paulo at least until next week, according to the forecaster Meteorlogix. Prices jumped 11 percent in September as the lack of moisture raised concern that the flowering of coffee trees may be disrupted.

"There is still no rain, just dryness," said Donna Heidkamp, a broker at RJO Futures in Chicago.

Coffee futures for December delivery rose 6.4 cents, or 5 percent, to $1.3505 a pound on ICE Futures, formerly known as the New York Board of Trade.

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