COCOA PRODUCERS BATTLE CONSUMERS

COCOA PRODUCERS BATTLE CONSUMERS

Producer members of the International Cocoa Organization have refused to discuss with consumers a lowering of ICCO intervention prices.

The producers claim the 1986 International Cocoa Agreement does not provide for discussion of any revision, delegates said Wednesday on the eighth day of talks here.While cocoa prices here fell to further life-of-contract lows at 947 a metric ton basis May, talks aimed at introducing a secondary price-support mechanism have reached a stalemate over the key issue of ICCO intervention prices.

At a brief council meeting, producers disputed the consumers' claim that the ICCO price range - currently 1,485 to 2,155 special drawing rights a metric ton - could be cut automatically by 115 SDRs if the two sides failed to reach an accord.

In addition, consumers' spokesman Peter Baron of West Germany said the issue of intervention prices must be settled before the stock withholding scheme can operate.

The two issues are linked because we (the ICCO Council) have to set a price which the ICCO will defend under the withholding scheme, he said.

Producers, however, said the operation of the ICCO's stock withholding scheme, which came into effect Tuesday, could not be tied to a lower price range, delegates said.

The ICCO's 10-day average indicator price is currently well below the range at 1,268.90 SDRs.

Producers' spokesman Moma Mohammed of Ghana, however, maintained that there was no reason to reduce the price range and no linkage between cutting (intervention) prices and the operation of the withholding scheme.

The withholding scheme, which allows for a maximum of 120,000 metric tons of cocoa to be kept off the market, should have come into effect when the ICCO buffer stock reached 200,000 metric tons or 80 percent of its capacity, Mr. Mohammed said.

Council Chairman Albert Russchen of the Netherlands held informal consultations with Mr. Baron, Mr. Mohammed and ICCO Executive Director Edouard Kouame in an attempt to resolve the procedural dispute, delegates said.

Both Mr. Baron and Mr. Mohammed expressed pessimism about the progress of the talks.