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Brazil: court battle over coffee policy.

Brazil: court battle over coffee policy

Trading in the Brazilian coffee industry ground to a halt on May 5 after a Rio de Janeiro court awarded a coffee exporter the right to ship 450,000 bags of coffee independently of the Brazilian Coffee Institute (IBC).

Umberto Modiano won a restraining order against the IBC allowing him to sell his coffee without paying its export fees and without having to bid for export rights at the auction. The IBC set up the auctions last year to distribute International Coffee Organizations export quotas more fairly.

The auction May 5, was suspended in mid-season after the news of the court decision spread. However, Modiano's triumph was short-lived because the IBC's lawyers managed to overturn the order on Friday evening. The auction was resumed yesterday setting the price for export rights at $21 to $22 a bag.

Had Modiano got his way Brazil's entire coffee policy would have been paralyzed. And since the country is the world's largest coffee producer, supplying about 30 percent of international demand, that would have immediate and far-reaching consequences.

Modiano's action was part of a broader case he had brought against the IBC arguing that its export regulations were forbidden under the seven-month-old constitution.

The IBC said it was unconcerned by the case. Bernardo Roma, the institute spokesman, said "There is nothing very special about this. Modiano has raised a constitutional question just to get publicity. We are not worried."
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Title Annotation:International Report; coffee exporter wins right to ship bags of coffee independently of Brazilian Coffee Institute
Publication:Tea & Coffee Trade Journal
Date:Jul 1, 1989
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