New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-09-23
Brazil Worries
Over Its Large
Coffee Surplus
Government Warehousing
of New 16,5OO,O00-Bag
Crop Proposed

over how to care for its surplus pro-
duction Of coffee, the 1918 crop in
that country being estimated at 16,b0O,-
600 bags. Government officials es well
as fnanciers, according to Charles l..
Hoover, the American Consul at Sac
Paulo, are considering the possibility
that 100000 bags of the new crop may
have to be held, and are dcvising proper
means to handle the situation so that
prices may not fall to ruinously low
point. The problem of handling this
years coffee harvest is Of paramount
Importance to both the government and
the planters on account Of the ex-
traordinary circumstances affecting the
market. On the one hand, the war i'm
pedes or reduces the consumption in
various countries that formerly bought
large quantities; on the other, bump
err crop has been assured by favorable
climatic conditions, and the yield has
been further greatly increased by new
plantations coming into bearing.
Government May Store Crop
The programme that may be adopted
provides that the surplus be handled
through q system Of government ware
houses, which would so control the en-
tire crop that large quantities would
not be dumped on the market at any
one time. It Is not proposed that :he
government should buy the coffee, but
merely store it and issue warehouse re-
ceipts which would be negotiable at the
banks. 1t Is feared that in case the
Federal government undertook to pur-
chase the entire surplus an issue of
100000 contos (about S50,000,OOO) Of
new paper would be required, which, II
placed in circulation within a short
space of time, would probably cause Sc
rious economic disturbances. The de-
tails of the plan have not been finally
worked out, but it is estimated that
under a warehouse system not more
than $4,000 contos (about Sl2,50o,0OO)
will be required, or perhaps much less
than that sum, as it is expected that
when it becomes known that the gov
ernment is determined to release only
such amounts of coffee as can be sold
without breaking the market, the con-
fdence thus established will be SUM-
cient 10 maintain prices without any
extensive issuing of warehouse receipts.
16,4I7,O00 Bags for Export
According to the estimates of the
government statisticians, the exports
from the various ports of Brazil for the
wear ended June 30 were. in 6O-kilo
bags: From Santos, 9,S03,044; Victoria,
$4,000; Rio, 2,366,l30; Bahia, $4,000;
other ports, 10000; total, 12,S9S,l74.
Basing their estimates upon the most
authentic information obtainable, the
government officials place the quaint
ties available for expectation from the
new harvest at the following figures:
From Santos, 1902 900 bags; Rio,
1900 900; Victoria, 100000; Bahia, $780,
coo; other ports, $4,000; total, lS,4l',-
coo.
In spite Of the difficulties caused by
the war the coffee market IS not IN
bad condition, for the principal dis
tributing centres have only limited
stocks on hand. As the 19t7-1S pro-
duction of Brazil is estimated at To-
4l7,O0O bags and the production Of the
remainder Of the world at a maximum
Of 100000 bags, the total production
should be around 2l,2l7,000, or little
more than in 1915-r6. The certain
consumption is placed at 14,6O0OOO
bags, which would leave a world sur
plus of 6,6l7,000 bags; but should the
war end within the next few months
this surplus, it is expected, would be
absorbed rapidly.
Failed to Get Loan Here
The present situation recalls to mind
the efforts made early this year by
Brazilian interests TO borrow from New
York bankers against coffee stored In
the city OF Santos, Brazil. At the time
it was stated that the attempt had
failed. New York bankers who were
sounded on the proposition pointed out
that the project savored too much of
the old valorization scheme of 1908,
which got into such bad odor with the
United States government.
Financing Brazil's coffee crop with
large portion of the world engaged in
war has been a serious problem. OrdI-
narily European assistance would be
sought to help carry the burden, but
the planters have been forced to forego
any financial aid from that source.