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Brazil’s Coffee Consumption May Accelerate After Prices Fell

Coffee consumption in Brazil, the world’s largest producer of the commodity, may accelerate in 2012 after prices fell, according to research company P&A Marketing International.

Arabica coffee prices on ICE Futures U.S. have dropped 28 percent this year. Brazil’s demand growth slowed to 3.7 percent last year from 4 percent in 2010 and almost 5 percent in 2009, Carlos Brando, a director at the Brazil-based research company, said at a conference in Geneva today.

“There is a chance that demand will rebound again this year,” Brando said in an interview today at the conference. “If the high prices were a factor limiting consumption, this pressure has eased.”

Growing consumption in Brazil alone will not be enough to spur more production, Brando said. Brazil produced 43.5 million bags of coffee last season, according to the government. “Prices will have to go up if the market wants to keep the Brazilian coffee factory running,” Brando said.

Yields in coffee plantations will rise to an average of 22 bags a hectare (2.2 acres) for the past four years from 20 bags a hectare in the previous four years, he said.

To contact the reporter on this story: Isis Almeida in London at ialmeida3@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net

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