August 7, 2013, 11:24 a.m. ET
Brazil Launches Measures to Boost Coffee Prices
Government Will Buy Up Supply as Bumper Crop Is Expected
By JEFFREY LEWIS
SÃO PAULO—Brazilian President Dilma Rousseff said Wednesday that the government will launch two programs to buy as many six million bags of coffee to help prop up growers' incomes, the Agência Estado news agency
The government will offer growers options contracts to sell as many as three million 60-kilogram (132-pound) bags of coffee at 346 reais ($150.55) per bag, Estado cited the president as saying. The contracts will have a delivery date in March 2014.
Ms. Rousseff also said the government will buy as many as another three million bags at 307 reais per bag, though she didn't give any more details, according to the news agency.
An agriculture ministry spokeswoman couldn't immediately confirm the report.
Arabica prices have tumbled 18% this year on expectations for a record off-year coffee harvest. Brazil's two-year coffee production cycle is characterized by alternating years of higher and lower productivity—with 2013 being a down year. But dry, temperate weather in Brazil's main growing regions is expected to help
this year's harvest come close to last year's record.
Arabica-coffee futures rose Wednesday immediately after the report, with the contract for September delivery on the ICE Futures U.S. exchange up in late-morning trade 2.2% at $1.2075 a pound.
Brazil, the world's biggest coffee grower and exporter, has used option contracts in the past to augment growers' income.