Dispute between BR market and export should rise

The new figures of domestic consumption show that Brazilian people consumed 5.1 percent more between November of 2005 and October of 2006 in relation to Nov/04 until Oct /05, totaling 16.33 million bags of 60 kilos, according to the Brazilian Coffee Industry Association (Abic) report published on Febuary 1st. The higher domestic consumption is related to the better coffee quality, differentiated product and to the increasing investments in marketing.

The Brazilian consumption is increasing in the same rhythm of the global demand. On January 31st, the International Coffee Organization (ICO) published that exports enlarged 5 percent in 2006, totaling 91.62 million bags. Of this total, Brazil exported 30 percent last year.

In this context, for Brazil supplying the domestic market and keeping its position in global exports, it will be necessary 46.4 million bags in 2007: 17.4 million to attend the domestic market and 29 million for the international one, considering the forecast of a global demand increase of 5 percent.

Comparing with the national supply available in 2007, the conclusion is that one of the two destinies of trade will not increase like in the last year, since the volume in the country is not enough. Another effect should be the higher dispute between national companies and exporters, keeping prices attractive for growers.

The CEPEA/ESALQ Index for arabica type 6, delivered in Sao Paulo (capital) averaged 129.65 dollars per bag of 60 kilos last Wednesday, down 0.64 percent in relation to Jan 31st. For robusta type 6, in the origin Espírito Santo state, the Index dropped 0.2 percent in the same period, closing at 95.13 dollars per bag.

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