Deadline for ICO coffee talks in doubt

By Chris Mercer

- Last updated on GMT

Related tags: European union

Slow progress of talks to establish a new International Coffee
Agreement means member countries could miss the deadline for a
deal, BeverageDaily.com has learnt.

Several outstanding issues between members, including the EU and US, following negotiations in London this week have put the May deadline in doubt, an EU source said.

If that date is missed, members may be forced to extend the current agreement for an extra year, putting back potentially important reforms.

The International Coffee Agreement, signed by members of the International Coffee Organisation (ICO), is intended to provide a framework and a forum for different sections of the coffee industry to address sector-wide issues, covering production, trade and consumption.

The current agreement, signed in 2001, is set to expire in September.

However, some now believe ICO's May deadline for final proposals on a new deal looks "too optimistic"​. A last minute deal in September or perhaps a postponement until January 2008 may be more realistic.

Disagreements, including the number of votes handed to the EU, and difficulty among producer countries in co-ordinating their positions has slowed progress, the EU source said.

US proposals to "change a lot in the agreement in terms of structure and purpose"​, have also prolonged debate. The US, the world's largest coffee consumer, rejoined the ICO in early 2005.

One of its suggestions for the new agreement has been the creation of a finance forum, which may be used to facilitate investment projects in producer countries.

Nestor Osorio, ICO executive director, said the forum may include banks, such as Rabobank or the African Development Bank, and could be used to develop processing plants or enhance quality.

"[The forum] is to put together institutions that could be in a position to fund or finance activities or projects,"​ he said in an ICO press conference Thursday. But talks were still at an early stage, he added.

Osorio denied there were significant differences between the US and EU in the discussions for a new agreement.

He said ICO members had discussed a range of issues, including the need to promote consumption in producer countries and emerging markets, like China and Russia.

It was also envisaged that a new agreement would last for longer, possibly between eight and 12 years.

Everyone had agreed that sustainability, in terms of the environment, social and economic, would remain a central part of a deal, Osorio said.

Several major coffee firms have faced renewed criticism recently for treating producers unfairly.

ICO figures show that coffee growers were last year being paid less for their beans than in the 1980s, despite prices continuing to recover from a market crash in 2003.

Related topics: Tea and Coffee, Markets

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