10 Oct, 2008 - Coffee traders in Brazil say business has slowed this week due to the continuing global financial turmoil and a chronic lack of credit.
One coffee trader for exporters Comexim said Brazilian traders faced “confusion and insecurity” because of the fiscal crisis, which unsurprisingly was curbing trade.
Current interest rates had quadrupled compared to those offered before the credit crunch, he said, and that there was also less demand from International buyers in Europe.
One source at Interagricola in Santos, said international trading companies were buying small volumes of between 5,000 and 10,000 60-kilogram bags of coffee this week. Another trader agreed that most buyers are waiting for the financial situation to improve before making larger purchases.
Industry sources suggested that producers are adopting a similarly cautious outlook and are selling just enough to cover costs - looking for prices of around BRL300 a 60-kilogram bag for good quality coffee to sell.
Brazil is forecast to produce 52 million 60-kilogram bags of coffee in 2008-09.