Brazil May Offer Subsidy to Arabica Coffee Growers

By Carlos Caminada and Shruti Singh

April 22 (Bloomberg) -- Brazil, the world's biggest coffee producer, may give arabica growers a subsidy at government-run auctions this year to ensure a minimum price after the harvest starts in June.

The government may decide as early as April 29 on the values and amounts for the subsidized sales, Lucas Tadeu Ferreira, director of the Agriculture Ministry's coffee department, said today in a phone interview from Brasilia.

The auctions, where Brazil gives farmers the difference between a minimum price and the amount buyers offer to pay, may help bolster coffee after farmers start harvesting a bigger crop than last year. The plan encourages farmers to hold on to their coffee until the auction, preventing excess supply from pushing prices down.

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