NO NEAR TERM BRAZIL COFFEE MOVES EXPECTED

  The Brazilian Coffee Institute,
  IBC, is unlikely to disclose its future export policy until the
  end of next week at the earliest, trade sources said.
      IBC president Jorio Dauster is meeting government
  ministers, producers, exporters and market analysts to assess
  Brazil's position in the light of the failure of talks in
  London earlier this month to set new International Coffee
  Organization, ICO, export quotas.
      "The failure of the talks means Brazil has got to rethink
  its position completely," one Santos exporter said.
      A meeting of the National Coffee Policy Council is set for
  Thursday, March 19, and Dauster will almost certainly explain
  his plan to members then before announcing any new measures.
      Dauster told reporters on his return from London last week
  that no decisions would be made on exports before he had held
  talks with all sectors of the industry.
      Exporters said Dauster is not under any great pressure to
  start marketing coffee immediately. World prices have been
  recovering from the lows which followed the collapse of the ICO
  talks and Brazil has sold a reasonable 5.5 mln bags of 60 kilos
  for export in the first four months of this year.
      The exporters said the key factor in the eventual opening
  of May and June export registrations will be the amount at
  which the contribution quota is set.
      With little expectation of other sales incentive mechanisms
  such as discounts, bonuses and price fall guarantees being
  introduced, the level of the quota will be decisive in
  determining the competitiveness of Brazilian coffee on world
  markets, they said.
      They noted that on February 16, the eve of a planned
  increase in the quota, April registrations were opened and
  closed after 1.68 mln bags were registered for export, a record
  amount for a single day.
      If May/June registrations are opened under similar
  conditions as before, Brazil would have no difficulty in
  selling at least 2.0 mln bags per month.
      "The problem would be how to limit sales," one exporter said.
      Brazil's present foreign trade and payments problems mean
  there are pressures from the government to boost exports to
  maximise foreign exchange earnings.
      However, the sources said they expect the IBC to adopt a
  marketing strategy aimed at regaining Brazil's dominant
  position as an exporter, but without causing a price war.
      General opinion among exporters was that Brazil would plan
  to export between 17 and 18 mln bags this year of which between
  1.5 and 2.0 mln would be to non-members of the ICO.
      The 15.5 mln to 16 mln bags sold to members would be around
  the figure Brazil had offered to ship if ICO quotas were
  reintroduced, although Dauster has said this offer expired with
  the breakdown of talks.
      With the prospects of a crop of at least 28 mln bags this
  year, Brazil has the capacity to export up to 20 mln bags after
  meeting local consumption of around 7.0 mln, the sources added.
      However, the sources said Brazil is unlikely even to
  consider exporting such quantities, as this would almost
  inevitably lead to a fall in world prices as Brazil tried to
  encroach on other producers' markets.
      Maximum export earnings would be achieved by orderly
  marketing of traditional amounts, thus re-establishing Brazil's
  market share after last year's unusually low exports of 9.9 mln
  bags, enabling it to rebuild stocks and maintaining cordial
  relations with the producer group which backed Brazil's stance
  at the ICO talks, they added.
  

