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Zimbabwe benefits from quota suspension.

Renson Gasela, the chief executive of Zimbabwe's Grain Marketing Board (GMB), which is responsible for marketing the country's coffee, said that the Zimbabwean Coffee Industry stood to benefit from the further suspension until September 1992 of the International Coffee Agreement (ICA) export quotas, which was agreed at the London Meeting of the International Coffee Organization (ICO) of consumer and producer member countries.

Gasela said that the international coffee prices were subdued--currently 88 US [cents]/lb compared to US$ 1.20/lb in 1989--and farmers in some producer countries had suffered serious reductions in their returns from coffee. He added that Zimbabwe preferred a free-market because the country was able to sell its entire coffee crop without any problems, and since the suspension of export quotas, local coffee producers had received a fair return.

Under the suspended ICA export quota scheme, Zimbabwe's quota to ICO member countries was only 55% of its total production.

During the year ending March 31 1991, Zimbabwe earned Z$ 70 million (US$ 24 million) in foreign currency from coffee exports, double the previous season's figure.

Gasela said that at the London Meeting, Japan, a high quality consumer, had complained about the deterioration in the quality of coffee since the suspension of quotas and was concerned that if coffee prices remained low it would have a detrimental effect on the overall quality of the crop.

He added that Zimbabwe, which was represented by the GMB, the Ministry of Industry and Commerce and the Coffee Growers Association, assured the meeting that the country would continue to produce high quality coffee.

Gasela said that Zimbabwe needed to sharpen its marketing strategy so that by the end of the current marketing year (March 31, 1992) and in the event of the re-introduction of quotas, the country would have shown the world that Zimbabwean coffee was desirable, and therefore needed a higher export quota.

He said that Zimbabwe eagerly awaited the findings of the ICO working party formed to negotiate a new coffee agreement with new export quotas, expected next April.

Gasela added that the retention scheme proposed by Brazil and Columbia failed to get any backing from African coffee producers as well as the consumer countries.

Since the suspension of export quotas for coffee in July 1989, earnings for African producers, many of whom are dependent upon the crop for a large proportion of foreign currency income, have dropped from US$ 12 billion to US$ 7 billion. Africa's share of the world coffee market had dropped from 30% in the 1970's to current figure of 22%, due to drought, civil wars and political instability, poor marketing and a switch in consumer tastes to mild Arabica coffee from the mainly Robusta crop produced in Africa.

Elijah Mwangale, Kenya's Minister of Agriculture and chairman of the Inter-Africa Coffee Organization said that there was a new hope for a return to export quotas because of the support of the United States government and the U.S. roasters who had complained of a drop in the quality of coffee exported since the suspension of the quota scheme.
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Title Annotation:coffee industry benefits from International Coffee Agreement's 1989 suspension of export quotas
Author:Kille, Turville
Publication:Tea & Coffee Trade Journal
Date:Jan 1, 1992
Previous Article:Modern Process creates a larger force within North American roasting industry.
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