SAO PAULO: Brazilian coffee producers are asking the government to consider selling the estimated 1.6 million bags in its stocks to curb price volatility and speculation as market players wait for more details on the extent of drought damage to this year's crop.
The Brasilia-based National Coffee Council said in an e-mail on Friday it had raised the issue of using public stocks to control prices with the finance and agriculture ministries this week, at the request of its members.
Concerns over drought in Brazil, the world's main source of coffee, have driven arabica prices to more than two year highs in recent days. Prices on Friday eased off their highest level since February 2012 on forecasts for rain next week in Minas Gerais, the state responsible for half of coffee output.
The country's official coffee stock figures will be updated later this month. As of March 2013 Brazil had 14 million bags in both private and government stocks.
Exporter Comexim said on April 2 that number would likely fall to 11.5 million bags by July 1.
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