Two major coffee export companies of Brazil, Atlantica Exportação E Importação sa and Cafebras Comércio de Cafés by Brasil Sa, owned by Montesanto Tavares Group Participaause SA, have just applied for bankruptcy protection due to serious financial difficulties.
These companies say they are facing many challenges, including strong fluctuations in the market due to soaring coffee prices, Brazilian Real Dollars lose prices compared to US dollars, and farmers do not comply with the signed contracts – instead selling coffee at higher prices to other parties.
According to the report, the total debt of these two companies amounted to 2.13 billion Real (equivalent to US $ 367 million). The move to apply for bankruptcy protection took place after the efforts to re -negotiate the debt with the creditors failed. This event shows increasing difficulties in the Brazilian coffee industry – the largest coffee exporter in the world.
The main reason that companies fall into this situation is a combination of many adverse factors. The price of world coffee has increased sharply in recent times that Brazilian farmers “break the contract”, violated the supply contract signed with Atlantica and Cafebras to run after higher profits from other buyers. At the same time, the loss of real estate increases financial pressure when companies have to pay loans in foreign currencies.
These issues not only affect Montesanto Tavares but also reflect the overall pressure on the Brazilian coffee industry in the context of fluctuating markets.
