MEXICO AGREES TO SCRAP COFFEE IMPORT PERMITS

MEXICO AGREES TO SCRAP COFFEE IMPORT PERMITS

The Trade Secretariat and coffee industry signed an agreement to scrap coffee import permits, the Mexican Coffee Exporters Association said.

Import permits will be scrapped from May 19. The move had been largely expected by producers.Association assistant manager, Ricardo Sotto, said the imported coffee will be used to cover domestic market needs and will allow exporters to sell more coffee in foreign markets for higher prices.

Following the breakdown of the International Coffee Organization's quota system on July 3, 1989, Mexico increased its 1988-89 coffee exports to 4.06 million bags, up from 2.55 million previously. Before the breakdown, Mexico was only allowed to export 2.2 million bags to ICO members.

"Last year, from July 1989 through March 31, 1990, Mexico exported 6.3 million 70-kilogram bags, the biggest in history," said Domingo Muguira, owner of Cafes Descafeinados de Veracruz, Decafeinados de Chiapas and a major exporter.

Domestic consumption was covered with coffee from previous production.

To meet present domestic consumption needs, Mr. Muguira said Mexico will import between 300,000 to 400,000 bags of cheaper Indonesian coffee, from May to July.

He is not worried that imports will carry duty of 10 percent.