Brazil will sell coffee stocks bought from producers via a put options program last year to take advantage of good market conditions, Agriculture Ministry said on Thursday.
The volumes and dates for auctions will be specified on Friday, the ministry's coffee department head Vilmondes Olegario da Silva said in a statement, adding that the coffee would enter the market in about 40 or 60 days.
"Internal coffee stocks are smaller now and there is capacity to absorb the product, especially in the external market," he said.
Last year, when both the crop and prices were much lower, farmers exercised options to sell coffee to the government for nearly one third of the total 3 million 60-kg bags available. The program was designed to support 2003/04 crop prices.
The statement came after a meeting of the main coffee policy body known as CDPC.
The ministry also said it was negotiating with the Finance Ministry the freeing up of funds to equalise interest rates for loans to coffee farmers. The government is expected to spend 60 million reais ($20 million), which should help to raise some 600 million reais in credit for producers.
So far this year, the government has extended until 2005 loan deadlines for producers and agreed to 500 million reais of storage and harvest aid for the 2004/05 coffee crop. Coffee farmers also say they want a new options program so as to stop damaging price swings.
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