Brazil Is Studying More Coffee-Support Measures, Official Says

  SAO PAULO  -  The Brazilian government is studying more measures to help coffee

growers, who are dealing with about $2.36 billion in debt, an official from the

agriculture ministry said Wednesday.

  As prices for arabica coffee, the mostly widely grown variety, trade near

seven-year lows, Brazil's government has taken steps to support the coffee

industry, which produces about 2% of the nation's total exports by value.

  The government's latest effort was last week, when it suspended loan payments

for coffee producers. But farmers say the move doesn't do enough.

  Grower groups would like to see the government establish a strategic coffee

stockpile, let growers pay debts with coffee and provide more financing options

for mechanization.

  "We're looking at all the proposals; nothing has been ruled out yet," Janio

Zeferino, director of the Agriculture Ministry's coffee department, told The

Wall Street Journal.

  More measures will be implemented if the most recent moves don't boost

prices, Mr. Zeferino said. He couldn't say how long the government would wait

before deciding if more is needed, adding any new steps would be announced

"when appropriate."

  Arabica coffee traded on the ICE Futures U.S. exchange is down about 25% this

year, trading at $1.0810 a pound Wednesday. Futures rose as high as $1.12 a

pound last week in anticipation of what the government would propose, but

prices quickly pulled back after the debt-payment suspension was announced.

  Producers said the debt measure deals only with the effects of low prices,

not the price itself. Coffee growers have been taking on debt while they wait

to sell their beans at higher prices.

  Mr. Zeferino estimated that coffee farmers owe 6 billion reais.