text: Demands for commodity auction rule changes to stop overbidding for cocoa export contracts will dominate talks in Abidjan next week on progress with Ivorian agriculture reforms, donor and industry delegates say.
  "We are now ready to revisit the issue and the possibility of amending rules," a World Bank official told Reuters.
  Ivory Coast's Consultative Committee, set up in October to review progress on a World Bank Agricultural Sector Adjustment Credit (ASAC) timetable, meets in Abidjan on February 5-7.
  A clear agenda was expected to emerge after intitial meetings between the Ivorian government, industry and international trade officials.
  Exporters want immediate changes to the auction, which is aimed at ensuring price competition and market transparency.
  "Exporters have to pay too much, sell at a loss and get into (contract) positions they don't really want," one told Reuters.
  The World Bank sponsored the auction as part of a $150 million ASAC loan dating back to 1994 on condition that rules and penalties were applied.
  "The problem is that the Caistab (Caisse de Stabilisation marketing board) has not given us sales data since September," said one bank official.
  Contract allocation was previously handled by the Caistab as a state commodity marketing monopoly.
  Donors in September agreed to two modifications but said initial overbidding and concentration of export rights in a few hands had waned since the system was put in place in May 1996.
  "We cannot wait until next year (Oct-Sept 1997/98) for changes," one exporter told Reuters. "Two thirds of each year is sold forward so new rules would not bite until 1999."
  "Support for the system is disappearing, especially for physicals traders," another said. "There's a lot of forward buying for 1997/98 to ensure smooth debloquage."
  Ivorian ministry officials along with International Cocoa Organization, World Bank, International Monetary Fund, European Union, industry and trading representatives will attend talks.
  "The market has certainly fallen below the price of some people's contracts," said one exporter. Auction rules were partly the problem but recent low world demand and price could also mean some would hold on to stocks for a March premium.
  Warehouses at Ivorian ports are full to normally operating capacity estimated to be at least 380,000 tonnes.
  There is also discord over auction penalty rules.
  "Penalties are not being applied so the system is really not working," one European-based buyer told Reuters.
  Exporters say penalties are unclear. "The rules are too blurred and are being applied when they shouldn't," said one.
  Export contracts are auctioned in two daily sessions but exporters are banned for five sessions if they fail to put up a bank guarantee of 25 CFA per kilo within three days of bid confirmation by the Caistab.
  "We are still in disageement with the Caistab about the levels of interest rates," said one exporter. Before the reforms, the Caistab put up guarantees on behalf of exporters.
  The World Bank in late 1996 agreed to a proposal for an 85-15 percent split between sales to local exporters and by the Caistab directly to international traders.
  "If international traders' bids do not at least match the best local exporters' bid they should not be allowed to buy," said one exporter.
  The World Bank has not agreed to parts of a GEPEX exporters' forum proposition to spread contracts more widely, between five highest bidders in each session.
  "We have agreed the principal of differentiated prices and the 85-15 rule but not the five bidders proposal," said a World Bank official.
  The World Bank wants bidders held to the price they bid, rather than winning contracts but at the second highest bid price -- a rule which it says encourages overbidding.
  ($1=551 CFA francs)
  -- Abidjan newsroom + 225 21 90 90
  