Amadeusz Juskowiak

Producer split heats up coffee quota talks

Talks on the possibility of reintroducing global coffee export quotas have been extended into today with sparks flying yesterday when a dissident group of exporters was not included in a key negotiating forum

The special meeting of the International Coffee Organization ICO council was called to find a way to stop a prolonged slide in coffee prices

However delegates said no solution to the question of how to implement quotas was yet in sight

World coffee export quotas the major device used to regulate coffee prices under the International Coffee Agreement

were suspended a year ago when prices soared in reaction to a drought which cut Brazils output by nearly two thirds

Brazil is the worlds largest coffee producer and exporter

Producers and consumers now are facing off over the question of how quotas should be calculated under any future quota distribution scheme delegates said

Tempers flared late Saturday when a minority group of eight producing countries was not represented in a contact group of five producer and five consumer delegates plus alternates which was set up to facilitate debate

The big producers want to have the ball only in their court and it isnt fair minority producer spokesman Luis Escalante of Costa Rica said

The majority producer group has proposed resuming quotas April 1 using the previous ad hoc method of carving up quota shares with a promise to try to negotiate basic quotas before September 30 delegates said

Their plan would perpetuate the status quo allowing Brazil to retain almost all of its current 30 pct share of the export market Colombia 17 pct Ivory Coast seven pct and Indonesia six pct with the rest divided among smaller exporters

But consuming countries and the dissident producer group have tabled separate proposals requiring quotas be determined by availability using a formula incorporating exportable production and stocks statistics

Their proposals would give Brazil a smaller quota share and Colombia and Indonesia a larger share and bring a new quota distribution scheme into effect now rather than later

Brazil has so far been unwilling to accept any proposal that would reduce its quota share delegates said

Delegates would not speculate on prospects for agreement on a quota package Anything is possible at this phase even adjournment of the meeting until March or April one said

If the ICO does agree on quotas the price of coffee on the supermarket shelf is not likely to change sinnificantly as a result industry sources said

Retail coffee prices over the past year have remained about steady even though coffee market prices have tumbled so an upswing probably will not be passed onto the consumer either they said

REUTER