ICO BOARD SEEN UNLIKELY TO SET NEW COFFEE TALKS
Chances that the International Coffee
Organization, ICO, executive board meeting this week will agree
to resume negotiations on export quotas soon look remote, ICO
delegates and trade sources said.
    ICO observers doubted Brazil or key consuming countries are
ready to give sufficient ground to convince the other side that
reopening negotiations again would be worthwhile, they said.
    ICO talks on quotas last month broke down after eight days
when producers and consumers failed to reach agreement.
     "Since we have not seen signs of change in other positions,
it's difficult to see a positive outcome at this stage,"
Brazilian delegate Lindenberg Sette said. But quotas must be
negotiated sometime, he said.
     The U.S. has indicated it is open to dialogue on quotas
but that Brazil must be flexible, rather than refuse to lower
its export share as it did in the last negotiations, delegates
said.
     At this week's March 31-April 2 meeting, the 16-member ICO
board is scheduled to discuss the current market situation, the
reintroduction of quotas, verification of stocks and some
administrative matters, according to a draft agenda.
    The fact that Brazilian Coffee Institute president Jorio
Dauster, Assistant U.S. Trade Representative Jon Rosenbaum and
chief Colombian delegate Jorge Cardenas are not attending the
meeting has signalled to most market watchers that it will be a
non-event as far as negotiating quotas is concerned.
    "I would imagine there will be a lot of politicking among
producers behind closed doors to work up some kind of proposal
by September (the next scheduled council meeting)," Bronwyn
Curtis of Landell Mills Commodities Studies said.
    Traders and delegates said they have seen no sign that a
date will be set for an earlier council meeting.
    If the stalemate continues much longer, analysts expect the
coffee agreement will end up operating without quotas for the
remainder of its life, to September 30, 1989.
    When talks broke down, the U.S. and Brazil, the largest
coffee consumer and producer respectively, blamed one another
for sabotaging negotiations by refusing to compromise.
    Brazil wanted to maintain the previous export quota shares,
under which it was allocated 30 pct of world coffee exports,
but consumers and a small group of producers pressed for shares
to be redistributed using "objective criteria," which would have
threatened Brazil's share.
    At a recent meeting in Managua of Latin American producers,
Costa Rica and Honduras said they were willing to put their
objections as members of the group of eight ICO "dissident"
producers aside, in order to stem the damaging decline in
prices, Nicaraguan External Trade Minister Alejandro Martinez
Cuenca told reporters Saturday. He was in London to brief
producers on the Managua meeting.
    However, other producers said they were not aware of this
move toward producer solidarity.
    London coffee prices closed at 1,276 stg a tonne today,
down from around 1,550 at the beginning of March.
 Reuter
