U.S. Won't Join Coffee Pact Without Key Modifications

From Reuters

The United States took a tough stand Monday at the start of talks in London to prop up coffee prices, saying it would not join a new price pact unless producers ended cheaper sales to countries outside the accord.

The 74-nation International Coffee Organization's existing agreement runs out at the end of September, and market analysts have said prices could collapse without sufficient support.

The United States, the world's biggest coffee consumer, has long complained about cheaper sales to mainly Eastern bloc and Arab countries that are not members of the price agreement.

Some West European nations have also said they are against extending the agreement in its present form.

The United States said it wanted to ensure that a new agreement would provide U.S. processors with enough high-quality coffee.

U.S. officials said they would float some ideas during the current talks on how to increase the availability of this type of coffee, grown largely in Latin America and East Africa.

Talks Began in November

Brazil offered to meet U.S. demands with proposals for tighter export controls to solve the problem of cut-price sales.

Brazilian negotiator Lindenberg Sette said these aimed to "make sure what coffee goes where and at what price."

Talks to renew the pact started last November when producers and consumers reached a stalemate over ending the two-tier market.

Talks this week aim to find if there is room for compromise.

The United States said it wanted to reach some conclusion by April 14, after the organization's next full council session.

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