IVORY COAST EXPECTED TO RESUME COCOA SALES

IVORY COAST EXPECTED TO RESUME COCOA SALES

A bumper cocoa crop forecast for the Ivory Coast this year will pressure the nation into abandoning an informal policy of holding production off the world market, analysts said.

Analysts estimate that as much as 20 percent or about 130,000 metric tons of the 1987-88 crop has gone unsold.The reserved selling posture of the world's largest cocoa producer has had a modicum of success in hardening cocoa prices since it began in earnest earlier this year to withdraw from the cocoa market, said Arthur Stevenson, a tropical commodities analyst with Prudential-Bache Securities Inc.

As a result, strong premiums for cocoa of other West African origins have been paid for cocoa in several European cash markets, primarily for cocoa from Ghana and the Cameroons.

But analysts generally agree that the Ivory Coast will have little choice but to reverse its selling policy as new demands are placed on moving out the old crop (1987-88) to make room for 1988-89 production later this year, Mr. Stevenson said.

The Ivory Coast can't hold back cocoa for much longer, Mr. Stevenson said.

In the 1987-88 season (a combined total of its main crop and summer crop), the Ivory Coast will produce about 630,000 metric tons of cocoa beans, or 40,000 tons more than during the country's 1986-87 crop year, according to latest statistics from Gill and Duffus Group PLC, a major cocoa dealer.

That figure is impressive, said Mr. Stevenson, and would be a record for any one season by an individual country.

In addition to the burden of new crop supplies, the Ivory Coast relies

mainly on exports of cocoa, coffee and from tourism for most of its foreign currency earnings, analysts said.

According to Bernard Savaiko, a commodity analyst for Paine Webber Inc., the Ivory Coast is unlikely to offer anything more than a trickle onto the market until they get a more definite assessment of the summer crop harvest. Recent forecasts place the summer crop, which gets harvested between May and September, at around 50,000 tons.

That wait-and-see attitude may forestall further cocoa price declines, although strong cocoa consumption worldwide and in the United States in particular is having the most impact on warding off sharply lower prices even if the Ivory Coast resumed selling cocoa.

The failure of the International Cocoa Organization last March to agree on a price stabilizing mechanism has kept world prices hovering around six-year lows, analysts said. The agreement as it now stands is ineffective in dealing with lower prices, Prudential-Bache's Mr. Stevenson said. The spot price of cocoa on Wednesday was 71 cents a pound in the May contract on the Coffee, Sugar & Cocoa Exchange.

The key to a new agreement will be found in molding a new mechanism for price stability to replace the inefficient buffer stock purchase scheme, a cornerstone of the present agreement, most analysts agree.