MALAYSIA DECLINES TO STATE POSITION ON COCOA PACT

  Government officials in Malaysia, a
  major cocoa producer, have declined to say whether it will join
  the International Cocoa Agreement (ICCA) for which buffer stock
  rules were agreed in London last week.
      Ministry of Primary Industries officials said in January
  the cabinet would decide on Malaysia's participation, but so
  far a decision has not been announced. The government is said
  to be in favour of joining the pact, but local cocoa growers
  and traders told Reuters they are against the idea because
  certain provisions in it may be to their disadvantage.
      Malaysia is the world's fourth largest cocoa producer. The
  government feels that the pact, through its buffer stock
  mechanism, can help stabilise prices in a market which is
  labouring under surpluses, officials said.
      But growers and traders are concerned Malaysia's
  participation in the pact will require them to pay a levy for
  exports of cocoa to non-member countries of the ICCA.
      They estimate the levy at around 100 ringgit a tonne at
  current prices and said they are not prepared to accept it
  because a big portion of Malaysia's cocoa exports, officially
  estimated at 112,000 tonnes in 1986, goes to non-members.
      Most growers and traders added they are also against a
  buffer stock measure under the agreement which requires
  withholding of cocoa stocks when prices slump.
      Malaysia, which produced 117,000 tonnes of cocoa last year,
  might be forced to withhold up to 70,000 tonnes worth some 30
  mln ringgit under such a measure in the long-term, and this
  might affect their economic viability, they said.
      "The cost of maintaining such a stock can be high and it
  will be a real messy business for the government and the trade
  if it ever occurs," an industry source said.
      The growers and traders also said that under new buffer
  stock rules Malaysia can continue to benefit even if it is not
  a member of the pact, as the buffer stock manager is also
  allowed to buy from non-members for the stockpile.
      Under the new rules purchases from non-members, such as
  Malaysia, will be limited to 15 pct of the total stock.
      Malaysia has come under pressure from some producers to
  join the pact soon, officials said, but they noted that it need
  not rush to do so as there are provisions which allow countries
  to join the agreement even at a later date.
  

