Brazilian Minister Delays Plan to Buy 5 Million Coffee Bags on Price Gains

Brazil, the world’s biggest coffee producer, postponed plans to buy 5 million coffee bags after prices rose, an Agriculture Ministry official said.

The government delayed plans to purchase the bags through option contracts after coffee topped 330 reais ($186) a bag in some regions, up from 280 reais in January, Gerardo Fontelles,
deputy agriculture minister, said in an interview in Brasilia yesterday. Fontelles had said in May that the country was planning to buy the coffee through options and direct purchases.

“There’s no need for purchases right now,” Fontelles said. “Prices are high enough at the moment.” Coffee growers are pushing the government to boost purchases of the bean to help them recover losses and bolster prices as trees enter the higher-yielding half of a biannual cycle. In 2009, Brazil offered to purchase 3 million bags through auctions of option contracts.
Brazil may harvest 47 million coffee bags this year, up from 39.5 million a year earlier, the ministry said May 6.