BRAZIL KEEPS COFFEE QUOTA FORMULA

BRAZIL KEEPS COFFEE QUOTA FORMULA

Brazil will not change the way it distributes its monthly quota allocated by the International Coffee Organization, said Jose Hugo De Castello Branco, spokesman for the country's minister of commerce and industry.

The current distribution formula consists of 67.5 percent of each company's past export performance, 22.5 percent on stocks and 10 percent on an auction system.However, exporters agreed to resume auditing their coffee stocks by private, independent auditing companies, Mr. De Castello said.

Until December of last year, companies declared their stock levels to the Brazilian Coffee Institute based on independent auditing reports paid for by each company. Most companies abandoned the independent audits in January saying they were too expensive.

The result, according to institute sources, was that many companies began to over-report their stocks in an effort to win larger export shares.

This, in turn, caused a statistical paradox, with Brazil reporting its total January stocks at 16.0 million 60-kilogram bags and its February stocks at 17.8 billion. The difference was almost certainly due to false reporting, Mr. De Castello said.

A market analyst said the government decision is likely to clear the way for an early opening of April export registrations.