KEY POINTS:
SAO PAULO - A cup of coffee can turn too bitter to drink in hours, but unroasted, well stored coffee beans can last up to 30 years, and Brazil's government is capitalising on this fact.
With world coffee supplies tight and prices high, Brazil plans to zero out all that is left of its federal coffee stocks, much of which are beans nearly 30 years old, an agriculture ministry official said.
"The only thing lost is the color. The bean yellows. But experts say that coffee that is well kept in the warehouse will last for 30 years," said Lucas Tadeu Ferreira, planning coordinator for the ministry's coffee department.
The government sold 100 per cent of the 40,000 bags auctioned yesterday in a public auction. Nearly all of the 60-kg bags were from the 1977/78 harvest and they sold at a final price of 245 reais ($167) a bag -- a premium of 44 per cent over the opening price of 170 reais.
"Our goal is to zero out these coffees, to turn them into cash for Funcafe," Ferreira said, referring to the federal coffee development fund, Funcafe, used to finance growers.
Government coffee stocks are estimated at 1.9 million 60-kg bags, their lowest level since the stocks were begun and 85 per cent less than their level 10 years ago.
Since the beginning of 2006, the government has sold 1.13 million bags, generating 195 million reais. Most of the bags auctioned were about 20 years old.
"There isn't any coffee around. The stocks are low and the producer knows this and is slowing sales. So everybody is cautious and is buying what there is," said Jorge Queiroz, a market analyst for Conab, the government's crop supply agency.
Queiroz feels the buyers are justified in paying premiums for the 30 year old coffee because of the coming downturn in output from Brazil's coffee trees in 2007/08 and the irregular flowering in many areas of the coffee belt due to drought.
Brazil is the world's largest producer and exporter of coffee. The vast majority of its coffee exports are green, or unroasted, beans.
- REUTERS
