ICO defends official efforts to make viable the production

The International Coffee Organization (ICO) argues that national governments should support producers, where the market price is below the cost or risk cripple the production of grain. In monthly report, the Organization emphasizes the "socio-economic importance of coffee as a main source of income, especially in rural areas, means that every effort should be made by governments to support their producers."
In Brazil, the government adjusted the minimum price guarantee of Arabica coffee in early May for R$ 307 to 60 kg bag. In the market, however, the product is currently traded under R$ 300 per bag. The ICO said that the high levels achieved in coffee prices in 2011 encouraged the increase in global supply, mainly through increased crop yields. As a result, the market for Arabica beans, in particular, is saturated with supply, which caused a "downward spiral of prices."
The ICO also reports that international coffee prices rose slightly in July, supported by the possibility of frost in the coffee plantations of Brazil, but returned to give the end of the month. The average price indicator ICO composite rose 1.2% in July from a month earlier to 118.93 cents a pound, but is still at its second lowest level since September 2009.
Stocks certificates Robusta coffee futures market of the London Stock Exchange (Euronext Liffe) fell to 1.64 million bags in July, the lowest level since October 2007, "indicating sustained an appetite for this kind of coffee", cheaper than Arabica.
In New York Stock Exchange (ICE Futures U.S.), stocks certificates Arabian remain at a level of about 3.1 million bags, although some damage was reported in stored grain in Antwerp (Belgium). According to the ICO, the arbitration between Arabica and Robusta coffees narrowed further last month, with price differentials at the lowest level since December 2008.
Source: Revista Cafeicultura