7:54 AM Jul 2, 1993

COCOA TALKS TO RESUME 5 JULY

Geneva 2 July (TWN) -- Consultations with producers and consumers of Cocoa have cleared the way for resumption of the negotiations for an agreement to replace the 1986 International Cocoa Agreement, due to expire on 30 September 1993, and negotiations under UNCTAD auspices will now resume in Geneva on 5 July, an UNCTAD press release announced Thursday.

The fifth session of the UN Negotiating Conference will run till 16 July.

The decision to convene the fifth session followed consultations by the President of the Conference, Peter Lai of Malaysia and a recommendation of the International Cocoa Council which met in a special session in London 9-12 June and adopted a decision containing a set of elements for the new agreement.

In terms of this, the new agreement would no longer have any provisions for a buffer stock and the existing buffer stock of a little under 231,000 tonnes would be disposed off under "controlled liquidation" according to modalities to be decided by the Cocoa Council at its next session in September.

A major source of discord between producers and consumers in the four sessions of the cocoa negotiations has been the question of arrears of some producer countries under the 1986 agreement -- under which producers collect a levy and remit to the Council, but some of them caught in the debt crisis failed to clear their arrears.

The consumers had been insisting that in the new agreement before they are called upon to share in the costs of any buffer-stock of withholding operations, those in arrears should pay up the arrears and thus enable financing at the first instance.

Under the elements now put forward, the arrears of countries would be set off against their shares in the proceeds of the liquidation of the buffer stock.

The buffer stock itself is a relatively small part of the world cocoa stocks, now estimated at roughly 1.4 million tonnes. At its peak in 1990-1991, these stocks stood at 1.56 million tonnes, but two consecutive years of production falls have helped reduce it.

The new agreement would have a production management policy, as already tentatively agreed to at the Conference session in July 1992.

Under the elements proposed by the Cocoa Council, the consumer countries would participate in this production management policy.

National policies and programmes are to be coordinated, under the July 1992 accord, by the Cocoa Council committee, taking into account the production management programme, which would "recommend the application of any measures and activities, including where appropriate diversification, likely to help re-establish a lasting equilibrium between world cocoa supply and demand as soon as possible."

On the basis of annual world production and consumption forecasts adopted by the International Cocoa Council, the Committee would also "fix indicative figures for annual levels of global production necessary to achieve and maintain equilibrium between supply and demand in accordance with the aims of the Agreement."

Each producing country would be committed to draw up a programme for the adjustment of its production, in terms of the production management programme that the producer countries as a group would implement. Each country would also regularly inform the Committee of the results of its national programmes and these detailed reports would be then placed before each regular session of the Cocoa Council which would then review the general situation and make recommendations.

On the consumption side, a Committee would be set up aimed at reviewing "trends and prospects of cocoa consumption and to identify the obstacles to the expansion of cocoa consumption in both exporting and importing countries", and through a subcommittee undertake promotion of cocoa consumption.