Brasília - This year's Brazilian coffee harvest is going to shrink by 21%, compared to the 2002/2003 harvest, reports the National Agricultural Confederation (CNA). That means 38.2 million sacks, instead of 48.4 million.

According to the president of the CNA Coffee Commission, João Roberto Puliti, coffee growers do not have working capital because their income has fallen sharply over the last three years due to a drop in international prices. That forces them to sell their crops when prices are not advantageous because they cannot stockpile their goods and wait for more favorable prices. Stockpiling is essential if the market is to be stable because the coffee harvest is biannual, with a strong harvest followed by a smaller one, explains Puliti. This year there will be a big harvest.

Puliti says coffee growers need more credit so they can stockpile. In response, the government has announced US$300 million (R$900 million) to be used for coffee stockpiles. Another solution would be purchases by the government, says Puliti. That would alleviate the situation, allowing coffee growers to stockpile their product and get a strong income next year, he declared.

Agência Brasil
Reporter:
Translator: Allen Bennett
07/23/2004