COCOA COUNCIL HEAD TO PRESENT BUFFER COMPROMISE

  International Cocoa Organization, ICCO,
  council chairman Denis Bra Kanon will present a compromise
  proposal on buffer stock rules to producer and consumer
  delegates either later today or tomorrow morning, delegates
  said.
      Bra Kanon held private bilateral consultations with major
  producers and consumers this morning to resolve outstanding
  differences, mostly on the issues of how much non-member cocoa
  the buffer stock can purchase and price differentials for
  different varieties.
      Delegates were fairly confident the differences could be
  worked out in time to reach agreement tomorrow.
      Some consuming member nations, including Britain and
  Belgium, favour the buffer stock buying more than 10 pct
  non-member cocoa, delegates have said.
      The consumers argue that buying cheaper, lower quality
  non-member cocoas, particularly Malaysian, will most
  effectively support prices because that low quality cocoa is
  currently pressuring the market.
      Producers, meanwhile, say non-member cocoa should make up
  at most a very small percentage of the buffer. They say
  Malaysia should not be able to benefit from the ICCO unless it
  is a member, and if the buffer stock bought Malaysian cocoa
  Malaysia would have no incentive to join, delegates said.
      As to differentials, Ghana apparently wanted a higher
  differential for its cocoa than is outlined in the most recent
  proposal, so it would have a better chance of having its cocoa
  bought for the buffer stock, producer delegates said.
      Some consumers wanted differentials to be adjusted in a way
  that would not promote buffer stock purchases of the more
  expensive cocoas, such as Ghanaian and Brazilian, they said.
      Other technical points need to be sorted out, including
  limits on how much cocoa the buffer stock manager can buy in
  nearby, intermediate and forward positions and the consequent
  effect on prices in the various deliveries, delegates said.
  

