The new two-year extension of the 1986 International Cocoa Agreement will have very little, if any, impact on the current state of the market, traders and analysts believe.

The extension, ratified last week by delegates to the International Cocoa Organization, has no real effect other than continuing to hold the organization's 250,000-metric-ton buffer stock off the market.''The market understood that if the ICCO had failed to extend the agreement, then roughly 50,000 tons of buffer-stock cocoa would have been sold annually for the next five years," one London desk trader said. "In terms of an entire year's crop, that's not a large percentage, but over five years it's certainly enough to have a bearish effect on prices."

Supply and demand fundamentals are the driving forces behind the futures market at present, serving to raise prices from real-value all-time lows in early February to constantly rising six-month highs during the past week, traders said.

Since prices began their precipitous fall last August, when price regulatory chapters in the 1986 ICCA were effectively suspended by the movement of world prices below intervention levels, the market has been basically free.

After falling to all-time lows, prices have begun to find new levels based on fundamentals rather than on artificial mechanisms such as those imposed by the ICCA.

Traders believe the ICCO had an opportunity to influence prices with the agreement's control mechanisms but failed to do so because of in-fighting between producers and consumers.

''The cocoa agreement failed because of the lack of flexibility in the SDR intervention levels," one London trader said. "The organization set the SDR level for both buying and selling by the buffer stock at ridiculous levels, and when the market fell far beneath those levels, they weren't flexible enough to change them."

(The 1986 ICCA set market price levels in Special Drawing Rights - SDRs, which are valued on a weighted average of five principal trading currencies - at which the buffer-stock manager had to buy and sell buffer-stock cocoa.

(In theory, when the market price fell to a certain SDR level, the manager bought cocoa to support prices, up to the buffer-stock maximum of 250,000 tons. When the price rose to a certain level, he sold from the buffer stock.

(But the levels set by the agreement were quickly made impractical by the downward slide of world prices, and the manager had no power to change his intervention levels.) Traders compared the cocoa pact with the rubber agreement, which has successfully supported that market. "The rubber buffer- stock manager could buy and sell when the market dictated, not at levels dictated by some antiquated pricing mechanism," one trader said. "For the cocoa agreement to survive as a viable market force, it will have to incorporate flexibility."

But some traders believe fundamentals will override any attempted artificial intervention. "There is no doubt that the cocoa market has been for the past several years an oversupplied market," said an analyst with a London-based trade house.

''But this year," the analyst said, "there is unease on total production figures. World production is definitely less than last year for several reasons: weather patterns, husbandry, and not least of all the fact that prices were at all-time lows."

Additionally, astute long positioning by three major trade houses, coupled with persistent unrest in the Ivory Coast, the world's largest producer, have forced prices higher over the past two months.

''The market believes that SucDen, Phibro and Rayner are all extremely long cocoa," one trader said. "Those three houses have bought most of the current and new-crop African and Indonesian cocoa, and are holding it and only selling in bits. This serves to tighten supply and drive prices up.

''But they are having to pay holding costs for the cocoa," the trader said, "And as money for that doesn't grow on trees, the commodity will eventually have to come on the market. And when it does it will have a negative price effect." So the trade sees the two-year extension period as a time of free- market pricing, and some feel the ICCO is a group whose time has past.