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ICO in need of buttressing.

ICO in need of buttressing

Back in August last year this journal became the first to say in cold print what a lot of trade experts had only been saying in private: that the days of the International Coffee Organization were numbered. In these turbulent times, is it now any safer?

In 1174 AD, when the Princes of the Church were planning a new cathedral for the Tuscan city of Pisa, they told the architects that they wanted a handsome bell tower to go with it. What they got was 180 feet of dazzling white marble, in eight elegant stories, set on foundations that were only three feet deep. Not surprisingly, it soon developed a decided tilt, and ended up 16 feet out of true.

But in spite of everyone's predictions, it didn't fall down, and in the end the city fathers made a virtue of necessity and turned it into a tourist attraction. For 800 years people came from all over the world to gape at it, and it never budged another inch. Now, however, traffic and pollution are threatening to finish what the force of gravity failed to achieve, and it has been closed until further notice. Nobody knows if it will ever open again.

The ICO's headquarters in London's Berners Street are housed in a fairly unmemorable office block which meets all the relevant building regulations, and it's the organization itself which seems to be leaning out of the vertical these days. What threatens it is not shallow foundations, so much as a general lack of interest in its continued survival.

The consumer countries have become increasingly impatient at what they see as the unrealistic aspirations of some of the producer countries, and they have been infuriated by the unofficial market which has been allowed to flourish, with non-Member buyers being awarded what were in effect premiums, while Member countries paid both their ICO dues and higher prices for their green supplies. The quota system, while it remained in force, also denied roasters the quantities of higher quality Arabicas that their customers were demanding, and that didn't make the organization any more popular, either.

Now, as we predicted last year, many are suggesting that the expiry of the lease on the Berners Street premises next year should provide an ideal opportunity for relocating a much-truncated ICO in some less pricey area. In spite of a recent cooling in demand for central London offices, rents are still high, and the suggestion is that a smaller ICO could perhaps be more economically located in the newly-developing London Docklands area, where poor demand has blunted the appetites of property developers.

With the exception, perhaps, of the African producers and the tidy-minded Colombians, the producers seem also to have responded pretty feebly to the consumer attitudes. With oil prices now running at well over $20 a barrel again they desperately need higher prices for their exports, but while Brazil continues to be preoccupied with its internal troubles there is no real impetus for any moves to shore up the ICO.

Moreover, both the United States and the nations of the European Community are preoccupied with other issues these days. Apart from the horrifying implications of the Middle Eastern crisis, the Europeans are worrying about the run-up to the single market in 1992 as well as the practical consequences of the Eastern European upheavals, while the U.S. finds itself increasingly forced into the role of the world's policeman.

In the circumstances, the fate of the world's coffee industry seems to everyone outside of the coffee industry to be a matter of extremely marginal importance. There is still some residual consumer goodwill around, but the supply is limited, and it would not be sufficient to meet any really serious call for a reconditioned Agreement, let alone a brand new one.

For some time now, the meetings at Berners Street have been almost embarrassingly inconsequential affairs, as though the participants were conscious that their deliberations didn't matter all that much. Unless something is done to change attitudes, and soon, the September meetings could well turn into a funeral wake. In an increasingly disorderly world, however, even an imperfect system of regulating the international trade in this precious commodity is worth preserving.
COPYRIGHT 1990 Lockwood Trade Journal Co., Inc.
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Copyright 1990 Gale, Cengage Learning. All rights reserved.

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Title Annotation:International Coffee Organization
Author:Clark, Richard
Publication:Tea & Coffee Trade Journal
Date:Sep 1, 1990
Words:708
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