Drought drains Brazil's robusta warehouses of coffee, forces layoffs

martes 27 de septiembre de 2016 13:16 GYT

* Robusta output seen worsening in 2017

* Warehouses expected to close

* Olam executive says warehouse at 25 pct capacity

By Reese Ewing

SAO PAULO, Sept 27 (Reuters) - Brazil's robusta coffee industry is laying off workers who transport, process and store the commodity in warehouses that are nearly idle two years into the worst drought in eight decades, according to traders and industry executives.

Though prices have never been higher at 427 to 434 reais (US$132-$134) per bag for conilon, the variety of robusta grown in Brazil, producers expect another bad crop in 2017 as they tear up trees ruined by drought. At current prices, Brazil's 2016 robusta crop is worth $1.2 billion.

Exports of conilon are down 90 percent over the past 12 months versus the previous year, the coffee exporters association Cecafe said.

Despite a major recovery in arabica production in the surrounding regions due to the return of rains, the 2016 conilon crop in the main producer state, Espirito Santo, has fallen 40 percent to 5.95 million bags since peaking in 2014.

"Warehouses and segments of the coffee industry here are putting employees on leave and transferring some to other areas," said Luis Polese, president of coffee trade association Sindicafe. "Unfortunately, less skilled workers are being let go." He could not say how many workers have been laid off.   Continuación...