Brazil crisis not to boost coffee exports -Abecafe
Reuters, Thursday, January 21, 1999 at 13:13
RIO DE JANEIRO, Jan 21 (Reuters) - Brazil's currency crisis
will not trigger a surge in coffee exports in the short term
because growers will probably wait for better prices due to an
expected production shortfall, a leading exporters group said
Thursday.
In a statement, the Brazilian Association of Coffee
Exporters (Abecafe) said output from the current 1999/2000
coffee crop, which should be harvested from May, would not be
enough to satisfy either internal or external demand.
And as most producers had raised enough cash from previous
sales, they were unlikely to rush into quick sales now after
Brazil's recent devaluation of its currency, the real, because
coffee prices could be expected to rise from July, it said.
"The real's devaluation should not cause an increase in
coffee exports in the next months. The fall in the real should
only have an effect in the long term by raising the national
coffee-grower's competitivity against external competitors."
"Most producers today are capitalized and are not in a
hurry to sell coffee now because they are able to anticipate
better prices from July as according to the forecast, the
1999/2000 crop will not be enough to meet internal and external
demand for Brazilian coffee," the statement quoted Abecafe's
director Roberto Sarcinelli as saying.
Abecafe cited government figures released on Wednesday
showing Feburary export registrations at just 762,563 60-kg
bags, well below the average monthly volume of 1.8 million bags
posted for the second half of 1998. March registrations
totaled a mere 264,552 bags, it said.
Earlier this week, Abecafe said Brazil's government would
need to sell more than half of its current coffee stocks over
the next 18 months to ensure stable local supply.
Using last month's official estimate of 23.15 million 60-kg
bags for the 1999/2000 crop, Abecafe said five million bags --
or some 277,000 bags every month -- would have to be auctioned
out of the current 9.5 million held in government stocks.
"Adding the 17 million (bags) of coffee remaining from the
1998/99 harvest with the 23 million expected for the next,
Brazil will have a gross total of 40 million bags for the next
18 months, which is not enough to meet internal and external
demand," it said.
The regular auctions, held as an electronic sale by Banco
do Brasil, are open to all of Brazil's coffee industry --
exporters, roasters and the soluble sector -- which compete to
buy old-crop stocks stored in authorised warehouses.
Copyright 1999, Reuters News Service
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