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Coffee Producers Support Lifting of Export Limits

January 21, 1986|Associated Press

LONDON — Coffee-producing countries decided Monday to back the suspension of all remaining limits on exports in an attempt to check the rise in prices, which recently hit an eight-year high.

"Producers agreed that we are ready to anticipate the suspension of quotas immediately, provided that controls are kept," said spokesman Jorio Dauster of Brazil after a meeting of producer countries at the International Coffee Organization conference, which opened here Monday.

Officials from consuming countries had a separate meeting Monday, and the two sides will discuss the question of suspension together today, delegates said.

The 75-nation organization regulates the $10-billion annual world trade in coffee through a system of export quotas.

Goal Is Stability

The aim is to keep the prices stable within a range of $1.20 to $1.40 a pound. Prices have recently moved above $2, pushed up by heavy speculative and trade buying that has developed because of huge drought losses in Brazil, which normally produces 30% of the world's coffee.

The organization has already increased the global export quota to the maximum permitted, and the only weapon left to it to take the steam out of the market is the suspension of quotas, delegates of the organization said.

Under organization rules for the 1985-86 coffee year ending Sept. 30, 1985, all quota limits are automatically suspended if the average price reaches $1.50 a pound and remains above that level for 45 market days.

This 45-day period will be up Feb. 18, and the organization's secretariat said in a document released Monday that the suspension of quotas appeared certain.

Many producers believe that it is important to act before the end of the 45-day countdown. At the end of December, Colombian President Belisario Betancur called for the immediate suspension of quotas.

"It is important to bring back prices to a level that will not damage consumption," Colombia's ICO representative, Nestor Osorio, said Monday.

He said Colombia--the world's second-biggest producer after Brazil--does not want to see a repetition of what happened in 1977-78, when consumption dropped after prices rose to record levels after a severe 1975 frost in Brazil.

Producer delegates said they are anxious to maintain controls over the market once quotas are suspended.

The controls are designed to keep a check on the movement of coffee entering world trade so that an accurate picture is available of exports and imports. They monitor movement through such means as export stamps and certificates of origin.

Such information will be critical in facilitating the reintroduction of quotas at any future date, the sources said.

Customs Concerns

Many coffee organization consumers are believed to favor the relaxing of controls if quotas are suspended in order to remove a burden from their customs sectors, delegates said.

The biggest of the organization's consumers is the United States.

The opening of the organization's talks in London coincided with the release of estimates by the secretariat showing that exports of coffee to all destinations last year reached a record annual figure of 70.98 million bags. One bag contains 132 pounds of beans.

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