Ag minister grants BRL 6.3 billion for coffee industry in Brazil

In a significant development for the coffee industry, Minister of Agriculture in Brazil, Carlos Fávaro, officially inked contracts on Thursday, August 17th, facilitating the allocation of funds from the Coffee Industry Defense Fund (Funcafé) to 44 financial institutions responsible for overseeing financing operations during the upcoming 2023/24 harvest.

During a symbolic ceremony, Minister Fávaro signed two distinct contracts. The first was with Banco do Brasil, representing a consortium of 23 public and private banks designated to manage Funcafé’s resources for the forthcoming harvest. The second contract was with Sicoob, serving as the representative for 21 cooperatives that will also partake in providing essential financing support to coffee growers.

Minister Carlos Fávaro expressed his admiration for the impressive advancement witnessed in the coffee industry in Brazil. He further pledged his commitment to designate BRL 40 million within the 2024 Annual Budget Law project, aimed at fostering actions geared towards coffee certification and bolstering the production chain.

See below how Brazilian coffee exports behaved from Jan 2019 to June 2023. The chart below was designed using DataLiner data.

Brazilian coffee exports | Jan 2019 – Jun 2023 | WTMT

Source: DataLiner (click here to request a demo)

Addressing the industry’s perspective, Pavel Cardoso, President of the Brazilian Association of the Coffee Industry (Abic), highlighted the significance of capital injection for the coffee industry. Specifically, the provision of R$ 883 million in the working capital line, along with an additional R$ 1.4 billion earmarked for the coffee acquisition line, has the potential to help companies navigate the financial challenges stemming from production drops and the sudden surge in coffee prices following the 2021 frost, which had disrupted cash flows.

Edegar Pretto, President of the National Supply Company (Conab), underscored the organization’s strategic readiness to receive and store coffee if the need arises. Notably, Conab boasts three specialized storage facilities located in Paraná, São Paulo, and Minas Gerais.

Reflecting on the past season, the 2022/23 harvest proved remarkable for Funcafé as it witnessed a record-breaking level of investment. Financial agents proficiently allocated 93% of the available resources to coffee growers, with a substantial sum of BRL 5.6 billion out of the total BRL 6 billion being effectively distributed. Throughout the season, these funds reached an impressive 65,000 beneficiaries across 15 states and the Federal District, reinforcing the vital role played by Funcafé in sustaining and nurturing the coffee sector.

Source: Globo Rural

To read the full original news report, please visit: https://globorural.globo.com/agricultura/cafe/noticia/2023/08/ministro-da-agricultura-oficializa-crdito-de-r-63-bilhes-para-a-cafeicultura.ghtml

Sharing is caring!