Cocoa Nations Meet In London

Also on the agenda is the question of how to continue funding the International Cocoa Organisation (ICCO) secretariat in London once its buffer stock sales run out in April 1998, delegates said.

At the last meeting in June, the members agreed to introduce a target range of eight per cent - allowing producers a latitude of four per cent higher or lower than the agreed output target - to help realise the group's plan to rationalise world supply.

The previous single-point target has so far been missed.

New production targets will be set at the meeting after delegates agree on a stocks/grindings ratio.

 

- the bellwether of market prices - to use.

Producer nations, spearheaded by Ivory Coast, have said they would push for a ratio of between 30 and 35 per cent. They said a 30-per cent ratio was regarded to be ideal.

Cocoa prices have historically rallied each time the stock/grindings ratio slipped below the 30 per cent mark.

No consumer proposals were seen yet but one European delegate said the consumers would insist that the ratio be realistic in order to win their support.

On the ICCO budget, both exporters and consumers say they were in favour of a drastic cut in running costs instead of raising members' contributions to help plug the revenue shortfall.

Buffer stocks sales now contribute about 40 per cent of annual budget of around pounds2.7 million a year.

The meeting will also discuss effects of an European Union proposal to allow member states to use vegetable fats in chocolate, a move that could seriously hurt cocoa demand.