IBC EXPECTED TO MAINTAIN COFFEE EXPORT FORMULA
The Brazilian Coffee Institute,
IBC, is expected to maintain its previous pricing system when
it reopens export registrations, probably later this week,
exporters said.
    They said IBC President Jorio Dauster is likely to leave
the basic formula for the minimum registration price unchanged
but raise the contribution quota to partially offset the
effects of cruzado devaluation since April registrations were
closed in mid-February.
    To fully compensate for devaluation the quota would have to
be around 28 dlrs per bag against 7.0 when registrations closed.
    However, even a 21 dlr per bag rise in the contribution
quota would make Brazil coffees uncompetitive on world markets,
and an increase to around 15 dlrs a bag is more likely, the
exporters said.
    They added that Dauster is keen to raise the contribution
quota as the Institute needs money to repay Central Governmnet
funds released to finance IBC purchases at the guaranteed
producer price.
    Although a vote in the Monetary Council to provide more
funds for such purchases was deferred on technical grounds last
week, funds are still being released for subsequent approval.
    The sources said it is still unclear when registrations
will be reopened, although most expect it to be by the end of
this week.
    "Brazil owes it to its customers to make its intentions
know. A country like Brazil cannot afford to be permanently
closed down," one exporter said.
    However, before announcing its export policy the IBC is
likely to wait to see if tomorrow's meeting of the
International Coffee Organisation, ICO, executive board in
London decides to call a full council meeting to discuss
reintroduction of export quotas, sources said.
    There is also talk of the announcement this week of new
measures to adjust the Brazilian economy, and the IBC could be
awaiting clarification before making any move, the exporters
said.
    Another factor which could be delaying the opening of
registrations is the current strike by bank workers which,
while not affecting current shipments, could affect
documentation and currency operations for new sales.
    This would certainly be the case if the IBC was considering
obliging exporters to pay the contribution quota within two or
three days of registering a sale.
