COCOA BUFFER STOCK ACCORD CLOSER, DELEGATES SAY

  The International Cocoa Organization
  (ICCO) moved closer to an agreement on buffer stock rules, with
  many delegates saying they expect to reach an accord by Friday.
      "Everyone is convinced the buffer stock rules should be in
  place by Friday so the buffer stock can be put into operation
  Monday," a consumer delegate said. "The atmosphere is excellent."
      Other delegates said the buffer stock might not be
  operational by Monday but could be in place by around April 1,
  if the rules are agreed by Friday.
      A detailed package on how the buffer stock manager will buy
  and sell cocoa was presented to a buffer stock working group
  this afternoon -- a big step toward a "very interesting stage of
  negotiations," delegates said.
      The package, based on negotiating principles informally
  agreed by delegates, has been forged bit by bit during
  fortnight-long meetings by ICCO Executive Director Kobena
  Erbynn and a small group of other delegates.
      Producers, the European Community (EC) and consumers are
  scheduled to consider the paper separately and then jointly
  tomorrow.
      Under the proposal, the buffer stock manager would buy
  cocoa from origins or the second-hand market on an offer
  system. He would alert the market via news agencies as to when
  he wanted to buy cocoa and include shipment details and tonnage
  desired, delegates said.
      The manager would buy cocoa on a competitive basis, rather
  than choosing the cheapest cocoa as before, giving preference
  to ICCO member-country exporters. Standard price differentials
  would be fixed for each origin, similar to golf handicaps, to
  determine the relative competitiveness of offers of various
  cocoas from different origins, they said.
      The differentials could be reviewed at the request of a
  member country or recommendation of the buffer stock manager,
  the delegates said. Revision would be decided by a majority
  vote of the ICCO council.
      Buffer stock purchases from non-ICCO member countries would
  not be allowed to exceed 10 pct of the total buffer stock, they
  said.
      The purchases would be limited to 5,000 tonnes of cocoa per
  day and 20,000 tonnes per week, and could be bought in nearby,
  intermediate and forward positions, they added.
      One of the underlying ideas of the rules package is
  "transparency," meaning virtually all the buffer stock manager's
  market activities will be public and he will have as little
  discretion as possible, delegates said.
      After the tin market collapse in 1985, when the
  International Tin Council buffer stock ran out of funds, cocoa
  delegates are anxious to install safeguards in the cocoa market
  mechanism, they said.
       Earnest debate on the buffer stock proposal is expected to
  begin late tomorrow, as delegations feel the pressure of the
  approaching Friday deadline, when the ICCO meeting is due to
  adjourn, delegates said.
      The ICCO failed to agree buffer stock rules in January when
  the new International Cocoa Agreement came into force. The
  existing buffer stock of 100,000 tonnes of cocoa was frozen in
  place with its bank balance of 250 mln dlrs -- both untouchable
  until rules are agreed.
       Though the current semi-annual council meeting is not the
  last chance for delegates to cement buffer stock rules,
  producers are keen to get the wheels of the market-stabilizing
  mechanism turning to stem the decline in world prices,
  delegates said.
  

