NO NEAR TERM BRAZIL COFFEE MOVES EXPECTED
The Brazilian Coffee Institute,
IBC, is unlikely to disclose its future export policy until the
end of next week at the earliest, trade sources said.
    IBC president Jorio Dauster is meeting government
ministers, producers, exporters and market analysts to assess
Brazil's position in the light of the failure of talks in
London earlier this month to set new International Coffee
Organization, ICO, export quotas.
    "The failure of the talks means Brazil has got to rethink
its position completely," one Santos exporter said.
    A meeting of the National Coffee Policy Council is set for
Thursday, March 19, and Dauster will almost certainly explain
his plan to members then before announcing any new measures.
    Dauster told reporters on his return from London last week
that no decisions would be made on exports before he had held
talks with all sectors of the industry.
    Exporters said Dauster is not under any great pressure to
start marketing coffee immediately. World prices have been
recovering from the lows which followed the collapse of the ICO
talks and Brazil has sold a reasonable 5.5 mln bags of 60 kilos
for export in the first four months of this year.
    The exporters said the key factor in the eventual opening
of May and June export registrations will be the amount at
which the contribution quota is set.
    With little expectation of other sales incentive mechanisms
such as discounts, bonuses and price fall guarantees being
introduced, the level of the quota will be decisive in
determining the competitiveness of Brazilian coffee on world
markets, they said.
    They noted that on February 16, the eve of a planned
increase in the quota, April registrations were opened and
closed after 1.68 mln bags were registered for export, a record
amount for a single day.
    If May/June registrations are opened under similar
conditions as before, Brazil would have no difficulty in
selling at least 2.0 mln bags per month.
    "The problem would be how to limit sales," one exporter said.
    Brazil's present foreign trade and payments problems mean
there are pressures from the government to boost exports to
maximise foreign exchange earnings.
    However, the sources said they expect the IBC to adopt a
marketing strategy aimed at regaining Brazil's dominant
position as an exporter, but without causing a price war.
    General opinion among exporters was that Brazil would plan
to export between 17 and 18 mln bags this year of which between
1.5 and 2.0 mln would be to non-members of the ICO.
    The 15.5 mln to 16 mln bags sold to members would be around
the figure Brazil had offered to ship if ICO quotas were
reintroduced, although Dauster has said this offer expired with
the breakdown of talks.
    With the prospects of a crop of at least 28 mln bags this
year, Brazil has the capacity to export up to 20 mln bags after
meeting local consumption of around 7.0 mln, the sources added.
    However, the sources said Brazil is unlikely even to
consider exporting such quantities, as this would almost
inevitably lead to a fall in world prices as Brazil tried to
encroach on other producers' markets.
    Maximum export earnings would be achieved by orderly
marketing of traditional amounts, thus re-establishing Brazil's
market share after last year's unusually low exports of 9.9 mln
bags, enabling it to rebuild stocks and maintaining cordial
relations with the producer group which backed Brazil's stance
at the ICO talks, they added.
 Reuter
