Evening star., 1925-07-01
HIGH COFFEE PRICE
PUzzL|NG BRAZIL
Dealers in Sac Paulo Believe
American PROTECTING
Is Responsible.
Correspondence of the Associated Press.

Correspondence of the Associated Press.
RIO DE JANEIRO. Brazil, June
6.-What causes the high price of
coffee? Brazil believes that the Amer
leans are gaining huge profits, and
have resolved To find out the truth.
The president Of the state Of Sac
Iaulo. in an interview has stated
that three or four men are now in
the United States trying 10 ascef-
tain the amount of profits made by
the American roaSterS. lie added
that coffee men in Sac Paulo are con
WINGED that a marketing group. some
where between the Brazilian export
er and the American consumer. is
securing profits that are large enough
10 injure the trade.
Growers Get Big Profits.
Two newspapers in Rio de Janeiro
have recently pointed out that the
profits of Bra aziIian coffee growers are
very high, and have advised caution
in continuing a policy which might
lead to serious financial trouble for
the country.
one of these papers. q formal. says
that the hostile attitude of the North
American is the result of prices
which even BraZilianS admit are eX-
tortionate.
Coffee growers should be satisfied
with less profits is the opinion OF
O Brazil, which adds that financial
returns should be confined To rea-
sonable amount Coffee at present
prices gllara antees a big income. Plan
tation owners. according To their pub
Iished balance sheets, have net profits
ranging from - TO 100 per cent on
the money invested. The America n
non-huyinC movement to force down
the price is perfectly legitimate
Producers Deny Statement.
Producers usually deny the asser-
ton that they are gaining 100 per
cent annually on the money invested.
II is pointed out that farm values
are rising rapidly. Dr. Augusta
Ramos author of a book on coffee
and a former manager of large
plantation, says that the aVera sc size
coffee farm in the Sac Paulo region
is now giving an annual profit of
$40. 900. and that the market value
of the farm would be about $50, ,00n.
He claims that the growers are secur-
ing only a reasonable profit and that
they cannot sell at a price below pres
ent quotations.
There are numerous indications
that Brazil expects to hold up the
price of coffee. The new cooperative
defense institute of Sac Paulo has
been buying on tHe santos lllitlkel
TO prevent a fall in prices. \ move
n1ent has just been started by the
State of Sac Paulo to secure co
ordinated action among the neigh
boring coffee growing states for hold
ing back entries of coffee at the port
of Rio de JaneirO, similar 10 the SyS
tenn used at Santos.
Situation Is Discussed.
The June number of Brazilian BuSi
ness. the official magazine OF the
American Chamber of Commerce foi
Brazil. publishes the following state
ment, in an unsigned article, on the
coffee situation:
We believe that moderate coun
sells will govern the future policy ot
Brazil in regard 10 her great staple
industry. for she would risk too mucf
by a prolonged attempt to circum
vent the fundamental law of supply
and demand. The continued prospect
of reasonably remuneratiVe prices is
more important to her than the TEN
porary advantage to he derived from
the extraordinary prices that have
prevailed for so long. The leader:
in her coffee industry certainly real
iZe this fact. and their objective is
market with "a minimum of f1uc
tuations around an average price
level that will assure ample returns
to the growers and yet not result il
diminished consumption abroad. II
this policy they are in complete ac
cord with the American coffee trade.