DJ Brazil\’s Coffee Producers Active As Prices Soar This Week

SAO PAULO (Dow Jones)–Brazil\’s coffee producers have seen fast-paced trade for their physical coffee as international and local prices skyrocketed this week. 

Producers in Brazil–the world\’s top coffee exporter–have seen trade flowing briskly due to attractive prices, Lucio Araujo Dias, commercial manager at Brazil\’s biggest coffee cooperative, Cooxupe, told Dow Jones Newswires on Thursday. 

Producers have been hitting target prices of around 300 Brazilian reals ($168) per 60-kilogram bag for good-quality arabica coffee, with fine coffees climbing to BRL345 per bag, Dias said. 

Nearby July coffee on ICE Futures US settled down 2.40 cents at $1.5635 a pound Thursday, after jumping on June 15 to its highest prices since March 2008. 

There is strong demand for fine coffees such as washed and semi-washed coffees with origins such as Colombia and Central America seeing tight supplies. Moreover, Brazil suffered quality problems with last year\’s crop suffering from rain. Meanwhile, new beans still aren\’t arriving fast enough from the harvest to quench buyers\’ thirst. 

\”Buyers are really trying to find a good supply of washed and semi-washed beans,\” said Jacques Pereira Carneiro, director of CarmoCoffees dealing in fine and specialty coffees in Minas Gerais, Brazil\’s No.1 coffee producing state. 

This week has been very volatile, with prices soaring to BRL330-BRL340 per bag for a good-quality semi-washed coffee, Carneiro said. 

Washed and semi-washed coffees use driers and pulping machines to remove the cherry skins. The beans then dry on the farm\’s patios. This process helps to create a more subtle taste and high prices. Regular arabica coffees use less careful sorting methods and allow the cherries to dry in the yards. 

John Wolthers, a trader at coffee exporter Comexim in Santos, said Brazil\’s producers are demanding good prices for scarce good-quality arabica coffee. Little coffee has been carried over from the old crop, he said. 

Buyers face a confusing mix of whether to wait for lower prices ahead of the bumper crop or to buy Some companies are rushing to buy, while others are postponing purchases, he said. \”It\’s a confusing period for buyers,\” he said. 

Brazil is the world\’s No.2 coffee consumer after the U.S.  
 
By Tony Danby, Dow Jones Newswires; 55-11-3544-7074; Anthony.Danby@dowjones.com