Go Back

Brazzil - Economy - August 2004

Coffee Profit Is Up in Brazil

According to the Brazilian Ministry of Agriculture, the coffee market
has shown signs of recovery this year. 13.9 million sacks were
exported between January and July, compared to 14.2 million
sacks during the same period last year. Although this year's
export volume was less, revenues were up US$ 232 million.

Nádia Faggiani


Picture The estimate for Brazil's 2004/2005 coffee crop is 38,264 million sacks, 32.8 percent more than the previous harvest of 28,820 million sacks.

However, according to the Secretary of Production and Commercialization, Linneu Costa Lima, it is possible that the crop will be smaller than the Ministry of Agriculture's prediction, since the country's production was damaged by the rains in May and June of this year and is liable to be adversely affected by further rainfall in September.

Costa Lima considers it possible that the market will react by raising coffee prices. The average export price per sack, which was US$ 46 in 2002, rose to US$ 56 last year and US$ 74 this year.

"The market is reacting. The Brazilian crop is late and may yield less and of poorer quality. If the supply is smaller, the price will have to adjust," Costa Lima affirms.

A survey conducted by the National Supply Company (Conab) demonstrates that there is an equilibrium between supply and demand. Growers are expected to have the crop ready by September 15 and be prepared for the possibility of additional rainfall.

So far, according to the Conab, only a small portion of the crop has been harvested, and only 33 percent has been processed for export. The months of May and June are regarded as the best time to harvest.

According to the Ministry of Agriculture, the Brazilian government is trying to make sufficient funds available for commercialization, so that growers need not make hasty sales to cover harvesting expenses.

The government has already allocated US$ 165 million (500 million reais) to commercialization, but these resources can only be used when the coffee is ready for export.

Another US$ 99 million (300 million reais) will be made available to growers as a result of a decision by the National Monetary Council (CMN).

Minas Gerais is the principal coffee-growing state in Brazil, with 18.6 million sacks. Second place belongs to Espírito Santo, with 6.4 million sacks. São Paulo is third, with 5 million sacks.

In the assessment of the Ministry of Agriculture, the market has shown signs of recovery. 13.9 million sacks were exported between January and July of this year, compared to 14.2 million sacks during the same period last year.

Although this year's export volume was less, revenues were up US$ 232 million. (US$ 1.29 billion in 2004 versus US$ 798 billion in 2003).

Workshop on Wine

Specialists from the Brazilian Agricultural Research Company (Embrapa) and universities in Spain and Portugal will take part in the First International Workshop on Research about Wine Production in Tropical Regions, from August 17 to August 19.

The idea of the event, which will be held at the Technological Institute of the state of Pernambuco (Itep), is to gather scientists to discuss the application of science and technology to the production of wine grapes in regions with tropical climates.

According to Jorge Tonietto, an Embrapa researcher, tropical climates and soils contribute to the production of grapes that result in wines with original flavors.

The wines produced in the São Francisco Valley, in Northeastern Brazil, have been gaining a growing share of consumer markets at home and in Europe.

In the region, which is home to eight wineries, six million liters are processed annually, representing 15 percent of domestic wine production.

This activity currently accounts for US$ 4.97 million in annual business, but entrepreneurs expect that the amount will increase to US$ 16.5 million in the next four years, based on the use of new production technologies.

Sorghum Program

Five thousand farmers in 110 municipalities of the state of Pernambuco, in Northeastern Brazil, will be benefited by a program to stimulate the production of grain sorghum.

The idea is to expand cultivation, ensuring at the same time the application of advanced technology in technical assistance and rural extension, in order to generate more jobs and income and provide better conditions to compete on the market.

The Ministry of Agrarian Development will offer US$ 9.26 million (R$ 28 million) in rural credit to use for the program, with the goal of increasing the area under cultivation to 50 thousand hectares by 2005.

According to the State Secretary of Rural Production, Gabriel Maciel, sorghum can replace up to 50 percent of the corn utilized as feed and in food mixtures by the poultry sector. He explained that greater productivity and resistance to pests and drought are among the advantages of sorghum in relation to corn.

"Sorghum is an energetic cereal with characteristics similar to corn and easily adapted to the hot climate of the Northeast, where it is grown in the states of Pernambuco, Rio Grande do Norte, Bahia, and Ceará," he informed.

In human alimentation it is used in typical regional dishes, such as couscous, popcorn, cornmeal mush, and corn dodgers. Sorghum meal is also used to make cookies, pasta, and bread.

Data from the Rural Extension Directory of the Pernambucan Agricultural Research Company (IPA) indicate that the sorghum harvest in the state should amount to 12 thousand tons.

Farmers who invest in sorghum will receive guarantees from the National Supply Company (Conab) and the Pernambucan Poultry Association to buy 40 percent and 30 percent, respectively, of all they produce.

Nádia Faggiani works for Agência Brasil (AB), the official press agency of the Brazilian government. Comments are welcome at lia@radiobras.gov.br.
Translated from the Portuguese by David Silberstein.

Discuss it in our Forum

Send your comments to Brazzil

Anything to say about Brazil or Brazilians? Brazzil
wishes to publish your material. See what to do.