Brazil, the largest coffee grower, will hold an auction on contracts for as much as 3 million bags of the beans within eight days, a government official said.
The state-controlled bank Banco do Brasil will receive 1 billion reais ($434.6 million) to finance coffee growers’ inventories and costs to help farmers hurt by the lowest prices in four years, Janio Zeferino da Silva, head of Agriculture Ministry Coffee department, said.
“They need funds to keep producing,” Silva said in a phone interview from Brasilia. “With the auction, we are taking off the market coffee that could be exported.”
Coffee prices have dropped 20.76 percent this year in New York trading. To help growers, Brazil President Dilma Rousseff announced in August a series of measures such as the options auction at 343 reais per 60-kilogram bag and 3.16 billion reais in government loans.
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