Report No. EC- 165 This report may not be published nor may it be quoted as representing the view of the Bank and its affiliated organizations. They do not accept responsibility for its accuracy or completeness. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION INTERNATIONAL COFFEE AGREEMENT, 1968 Background and Analysis August 1968 Economics Department Prepared by: Shamsher Singh TABLE OF CONTENTS Page No. INTRODWCTION I. HISTORICAL BACKGROUND, 1954-1962 1 II. INTERNATIONAL COFFEE AGREEMENT, 1962 8 (1) The Regulation of Exports 9 (a) Basic Quotas 9 (b) Annual Quotas 10 (c) Price Policies 12 (d) The Control System 14 (2) Production Controls and Diversification 16 (3) Expansion of Coffee Consumption 17 (a) 'Obstacles to Consumption 17 (b) Promotion 17 (4) Evaluation of the 1962 Agreement 18 III. INTERNATIONAL COFFEE AGRBEMENT, 1968 21 (1) Basic Quotas 21 (2) Waivers 23 (3) Price Policies 24 (4) New Markets 25 (5) Processed Coffee 26 (6) Production Goals 27 (7) Diversification Fund 28 (8) ICO Executive Director 30 (9) Concluding Remarks 30 IV. APPENDIX (1) International Coffee Agreement, 1968 - Annex A, Basic Export Quotas (2) International Coffee Agreement, 1968 - Annex B, List of Non-quota Cemntries of Destination (3) Statistical Tables INTRODUCTION . Coffee exports frcm the developing countries, vralued at about $?2,300 million in 1966, presently account for nearly six percent of their total exports. In this respect coffee (after petroleum) is the most important primary product exported by these nations. It is grown and exported by numerous tropical countries and is the most important single source of exchange earnings for more than a dozen nations. Like most primary products exported by the developing countries, coffee has historically experienced wide price fluctuations. In order to stabilize prices, the major producing countries made a series of efforts in the 1950's to regulate exports but these met with only limited success. These efforts, however, paved the way for the negotiation of a broader International Coffee Agreement in 1962, involving the principal producing and consuming countries of the world. The Agreement set up an International Coffee Organization and this, and the quota mechanism and other provisions of the Agreement, was designed to achieve "a reasonable balance between supply and demand on a basis which will assure adequate supply of coffee to consumers and the markets for coffee to producers at equitable prices." The International Coffee Organization can be credited with con- siderable success in stabilizing prices and therefore the export earn- ings of a considerable nurmber of the developing countries. The Inter- national Coffee Organization has estimated that it has made possible an increase in the total coffee export earnings of the coffee producing countries of at least i5OO million a year. W4ith a transfer of resources of this magnitude from the industrialized coffee consuming countries to the coffee producing countries, the possibility of the use of these funds for financing development is an important development opportunity for the coffee producing countries. The Agreement of 1962 is due to expire on September 30, 1968, and will be succeeded by the recently negotiated International Coffee Agreement of 1968. Since this marks the end of a phase in the history of the International Coffee Agreement, a brief staff study reviewing the background and analyzing the 1968 Agreement is presented for general infonaation. The study has been prepared by Sbamsher Singh of the Export Pro- jections and Trade Division, Economics Department, under the supervision of Mr. A. J. Macone, Chief. It has benefited greatly from comments made by 11r. George Kalmanoff, Head of the International Group of the Economics Department, by Miss Gertrud Lovasy, Adviser, and a number of authorities outside the Bank. Andrew M. Kamarck Director EJconomics Department I. HISTORICAL BACKGRCUND, 1954-62 1. The seeds of the first International Coffee Agreement (of 1962), due to be succeeded on its expiration on September 30, 1968 by the recently renegotiated International Coffee Agreement (of 1968), have a slow history of germination extending over an eight-year period of downward drift in coffee prices (Chart 1). 1/ 2. The origin of the international accord goes back to 1954,- when the Organization of the American States (OAS) established a Special Commis- sion on Coffee to make22a detailed study of the world coffee situation and of its future outlook"- to serve as a basis for a possible International Agreement. Coffee prices at that time were at an all time peak because postwar demand had recovered rapidly whereas production had remained low owing to the virtual cessation of planting during the 'thirties, a period of record low prices, and the war. However, plantings in Latin America and Africa following Wforld War II, stimulated by the high prices of that period, had begun to bear fruit and it was expect~4 that a period of sur- pluses lay ahead. The Coffee Commission's report-/published in 1955 clearly forecast a vast oversupply. 3. The danger of catastrophic price declines (the Brazilian frost of 1956 had only temporarily checked the downward price trend) prompted the OAS to commission, in 1956, the drafting of an international coffee agreerient even though the United States had indicated that it was not prepared either to negotiate an agreement or to participate in it. The United States held the view that price determination should be left to the forces of supply and demand. 4. The OAS Secretariat prepared two draft agreements, ¶pe containing price stabilizing devices and the other lacking such devices. The former was considered not feasible politically while the latter would have required the participation of countries outside the Americas and placed it beyond the jurisdiction of the OAS. Consequently, nothing came of the effort. 1/ In 1940 a quota and price agreement was negotiated by the United States and fourteen Latin American producers but this was designed to meet conditions created by the w-far. European markets had virtually closed, shipping had become scarce and controls on distribution had been insti- tuted by many countries. The agreement aimed at promoting "orderly marketing of coffee" between Latin America and the United States. After the lifting of most of the wartime U.S. controls on prices and distri- bution in 1946, the agreement was liquidated in 1948. 2/ OAS: IA-ECOSOC Resolution No. 34. 3/ QAS: "The Coffee Economy and the Future," Washington, D.C., 1955. 4/ OAS: '"roposals for an International Coffee Agreement,"r Washington, D.C., February 1957. MOVEMENT OF COFFEE PRICES SPOT NEW YORK (CENTS PER POUND) 80 - - ----- --- - -----r 80 AGREEMENT OF MEXICO (7 LATIN PRODUCERS) 70[ I -- -- -\ ABORTIVE RIO AGREEMENT 70INTERNATIONAL _ 7 ;f > \ / /\' 0_ESTABLISHMENT OF COFFEE COFFEE STUDY GROUP AGREEMENT IV A* .Jv *, / \\ LATIN AMERICAN I OF 1968 60 ----!----- * --- --- COFFEE AGREEMENT -------- -_- ____ 60 PRODUCERS' NTERNATIONAL COFFEE AGREEMENT ,, ....... j S .. ; * y , eINTERNATIONAL COFFEE COLOMBIA 5 0 * _ _ Jt _ _\ _ +\J^i\ . ~~~~~~~AGREEMENT OF 19,62 MAMS - 5 40 4-- _ ___ 40 40 t _ 1 ,, , ,_, , ^, , - t -- ~~~~~~~~~~.... ___.....40 30 ~~~~~~~~~~~~~~~BRAZIL 7-- s SANTO: 42 / t / _ _ _ _TOS ANGOLAN AMBRIZ 2AA *. PRIME WASHEDT 2 0 -- -- -20 Io 10 -- --- | - . : , . _ ._ 10 O I~ Q,!: , 950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 (Jan.- Jun. C) (R)IBRD-3966 - 3 Producers' Agreements, 1957-62 5. Production continued to expand, ushering in an era of rising surpluses (Chart 2), and prices started tumbling again in 1957, after a brief respite in 1956 induced by the Brazilian frost. Starting in 1957, a series of emergency producer agreements to hold the price were concluded, at first confined to Latin America, but gradually becoming more comprehen- sive and including African countries. None of these proved very effective. Agreement of Mexico, 1957 6. In 1957, seven Latin American countries- signed an agreement in Mexico City to regulate exports. Brazil agreed to retain at least 20 per- cent of its exportable production, while the other six each agreed to re- tain 10 percent. Minimum prices were not mentioned in the Agreement. Partly because of its limited membership, however, the Agreement of Mexico failed to stem the price decline and lapsed on September 30, 1958. Abortive Rio Agreement, 1958 7. Meanwhile, efforts to reach a more broad-based agreement had continued. A Commission.._/created by the Latin American nations convened a Coffee Conference in Rio de Janeiro in January 1958 to consider a re- drafted version of the non-price type of agreement previously prepared by the OAS.J In the final accord signed by fourteen Latin American countries and Portugal, the all-important provision of marketing quotas was left aside. The agreement simply provided for the creation of an International Coffee Crganization to undertake a continuing analysis and study of problems, trends and developments in the coffee industry. However, this accord never took effect because other developments in 1958 led to the establishment of a still more broadly based Coffee Study Group, which for the first time included the major African exporting countries and the United States. Establishment of Coffee Study Group, 1958 8. As the coffee situation further deteriorated, the United States policy relative to stabilization of commodity prices had undergone changes clearing the way for the convening, in June 1958, of a meeting of the major importing and exporting countries. This meeting decided to create a perma- nent Study Group on Coffee with headquarters in Washington. The United States was elected to the chairmanship. 1/ Brazil, Colombia, Mexico, El Salvador, Guatemala, Costa Rica and Nicaragua. 2/ Comision Organizadora de la Organizacion Internacional del Cafe. 3/ ICO: Document No. ICC-l-1 dated June 28, 1963, page 3. WORLD SUPPLY AND DEMAND FOR COFFEE (MILLION BAGS OF 60KG.) 90 T - - - r 90 80 - - t --- -- 80 I YEAR-END STOCKS- * ,, / '_ 70 70- - - % '_ 60 - ''n60 EXPORTABLE PRODUCTION- ! -'. 50 i . ,_-50 40 * _ .40 t/-S H -| A~~~EXPORTS 30 C=~ -;--+30 20- 20 10-I-- - -- --- 40 0 0 '46/47 '49/50 '52/53 '55/5G '58/59 '61/G2 '64/65 '67/68 '69/70 COfFEE Y{EAR ENDING SEPTEMBER 30I NOTE: In recent years some of the stocks were not of exportable qua0iy D SOURCE: See Appendix Tables 2 ant 3; eorJher years also from LlSb4 IBRD -3967 -~~~~~~~~~~~~~~~~~h 9. The Coffee Study Group so established remained mainly preoccupied with assembling statistics and seeking cormon ground for a broad-based agreement involving the participation of both the lWestern Hemisphere and the African producers. The differences between the two important regions centered on the fact that the Latin imerican producers wanted to establish a system of retention quotas whereby members would be obliged to withhold a certain proportion of the base year (1958/59) output. This implied that there was no limit on the volume of exports so long as a country withheld a stipulated quantity from the market. The African countries favored speci- fic export quotas based on recorded exports or exportable production using 1957 as the base year. The Latin American producers were unwilling to accept specific quotasl/ because these would have virtually precluded sales of coffee from previous crops unless, of course, their production fell below the quota. On the other hand, retention quotas, which allowed ex- ports of existing stocks, worked against the interests of the African producers who held little, if any, accumulated stocks. Efforts to devise a plan acceptable to both groups proved fruitless, but the Study Group continued in existence. Latin American Coffee Agreement, 1958 10. Hard pressed by the sharp fall in the price of Arabicas during 1958 (Robusta prices did not fall in 1958 because of a shorter 1957/58 Robusta crop),!/ fifteen countries concluded the "Latin American Coffee Agreement" establishing a system of retention quotas. As a gesture of cooperation France and Portugal, on behalf of their dependent territories in Africa, announced that they would voluntarily limit their exports. Belgium (for the Congo), Ethiopia and the United Kingdom (for its depen- dent territories in Africa) made no commitment. The Agreement went into force on October 1, 1958. 11. Despite these moves, however, prices continued to fall as pro- duction rose sharply and stocks piled up, with the stock accumulation concentrating almost entirely in Brazil. In the face of this situation and the obvious need for an agreement with a wider participation, the Latin American producers decided to accede to the viewpoints of the African producers and accepted the principle of specific export quotas and other modifications in the Agreerment. 1/ ICO: Document No. ICC-l-l, page 7. 2/ Two main types of coffee are grown in the world - Arabica and Robusta. Arabica is grown in the Western Hemisphere and also in Eastern Africa. Robusta is grown mainly in Africa and Asia. Only Trinidad in the WHest- ern Hemisphere grows Robusta. A few countries produce both varieties, distributed in roughly the following proportions (in percentage of Arabica/Robusta): Angola 3/97, Uganida 10/90, Cameroon 30/70, India 50/50, Tanzania 70/30. In view of some quality differences the ICO further divides Arabicas into three groups, namely, (i) Colombian Mild Arabicas (principally grown in Colombia, Kenya and Tanzania), (ii) Other Mild Arabicas (principally in Central America and Mexico), and (iii) UTnwashed Arabicas (principally in Brazil and Ethiopia). For country details see Table 4. - 6 - The Short-term International (Producers') Coffee Agreement, 1959/60 to 1962/63 12. Enccuraged by the new flexibility in the position of the Latin American producers and impelled by the sharp drop in prices of all types of coffee in 1959, a year in which world coffee production reached an all time high of 66.4 million bags, the Coffee Study Group renewed its efforts to bring together the Western Hemisphere and the Eastern Hemisphere coun- tries into a common agreement. 13. Consensus was finally reached on the text of a new agreement and in September 1959, Portugal, the French community (including Cameroon and Togo) and the fifteen Latin American countries-lsigned the new accord. known as the Short-term International Coffee Agreement. The British and Belgian delegations did not sign the Agreement but announced unilateral ceilings on the exports of their overseas territories. 14. The significance of the new Agreement, both institutionally and economically, was that for the first time African, as well as the Latin American, producers were brought together in a formal, binding arrangement, thereby marking an end to the narrower regional arrangements of earlier years. These seventeen participants accounted for over 85 percent of the world exportable production of coffee. The inclusion of importing coun- tries in the arrangement as a next step was yet to come. 15. The 1959 Agreement contained formulas for fixing specific export quotas- once and for all abandonrig the more elastic retentioa of export- able production concept. It laid dowin the principle that the total exp9rt quota would be determined in relation to world demand. "New markets, "a' 1/ Brazil, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador. Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Peru and Venezuela. 2/ H.M. Stationery Office, London: "International Coffee Agreement," Washington, D.C., September 24, 1959. 3/ Country quotas were determined on the following basis: (a) a figure of 90 percent of the expe:its that took place during the best calendar year in the period 1949-1958; and (b) for countries with an exportable production of less than two million bags, at their choice, either (a) or a maximum of 88 percent of the exportable production estimates published by the U.S. Department of Agriculture in January-March of the coffee year in which they accede to the Agreement. 4/ A "new markett" was simply one which had historically absorbed little coffee but which offered potential for increased purchases and which, with these criteria, could be differentiated from a traditional or established market. The new market concept introduced a measure of flexibility into the apportionment of the world market implied under the export quota arrangements. - 7 - which were distinguished from traditional markets and to which partici- pating countries could export outside their respective quotas, were specifically listed by countries. These concepts, although modified some- what over time, have remained at the core of the International Coffee Agreements of 1962 and 1968. 16. The Agreement, extended from year to year until it lapsed in October 1963, provided a transition from the short-term producers' agree- ments to the long-term International Agreement of 1962, which came into force in July 1963. In this period, the United Kingdom joined on behalf of Kenya, Tanganyika and Uganda (the former French African territories meanwhile became independent members), thereby raising the membership to 28 coffee-producing countries and territories, controlling over 90 percent of world exportable production. The major non-signatories remained the Congo (Kinshasa), Ethiopia, India, Indonesia and Rwanda-Burundi. 17. Although the various emergency producers' agreements could not prevent the price decline, the increased cooperation and understanding among the major coffee producers brought about by these accords must be credited at least with (a) slowing the price declines that would otherwise have occurred under the pressure of rapid expansion in supplies from new coffee areas, and (b) laying a firm basis for concluding in 1962 an inter- national accord on a still wider basis and including the major exporting countries. v 8 - II. INTERNATIONAL COFFEE AGREE4ENT, 1962 18. A principal weakness of the short-term International Agreement of 1959 was that consuming countries were not parties to it. This fact rendered virtually impossible the policing and enforcement of annual ex- port quotas. The interests of the producers, who were keen to involve the consumers in any long-term accord, received a big boost when, in March 1961, President Kennedy stated&/that "...the United States is ready to cooperate in serious case-by-case examinations of commodity market problems ..." with a view to bringing an end to the pattern of frequent violent changes in commodity prices. 19. Following this show of interest on the part of the country then accounting for 50 percent of world coffee Imports, the work of the Coffee Study Group was2r,eactivated. The Study Group published a comprehensive ten volume document!' on the World Coffee Problem. In addition, the Group pre- pared3y. paper on "Proposed Principles to Underlie a Long-Term Coffee Agree- ment"T- which served as a basis for the drafting of an International Agreement which was circulated to all interested governments at the end of 1961. 20. In July/August 1962, an International Coffee Conference was con- vened under the aegis of the United Nations. The Conference, presided over by the Honorable Mitchell Sharp of Canada and attended by 71 coffee-exporting and coffee-importing countries (with 58 countries participating actively) successfully negotiated and adopted the Agreement, officially designated as the International Coffee Agreement, 1962. The Conference reconvened on September 28, 1962 and finally approved the text of the Agreement, subject to ratification. Twenty-four countries initialed the document at that time and by November 30, 1962, the closing date, the governments of 54 exporting and importing countries had initialed the Agreement. This marked the cul- mination of the efforts which began in 1954. 4/ 21. The five-year Agreement was established- at a time when average coffee prices had declined by 40 to 50 percent from the high levels that 1/ White House: Address of the President on the Latin American Program, March 13, 1961; point five of the Ten-Point Plan. 2/ Coffee Study Group: "The World Coffee Problem, Present Status of the Industry and Future Prospects (A Long-Term Study),IT Document No. CSG-I- 17/60. 3/ Coffee Study Group: "Proposed Principles to Underlie a Long-Term Coffee Agreement," CSG-I-28/61, Rev. 1, September 29, 1961. 4/ The Agreement came into force provisionally on July 1, 1963, definitively on December 27, 1963, and is due to expire on September 30, 1968. During this period the membership of the International Coffee Organization, the administering body of the Agreement, has grown from 54 governments (32 coffee exporting and 22 coffee importing countries) accounting for about 95 percent of world exports and imports to 67 governmants (42 exporting and 25 importing) accounting for roughly 99 percent of world exports and 95 percent of imports. had prevailed in the early and mid-1950ts and the danger of further price declines had not abated. The Agreement had in view the principal objective of achieving t"a reasonable balance between supply and demand on a basis which will assure adequate supplies of coffee to consumers and markets for coffee to producers at equitable prices, and which wil] bring about long- term equilibrium between production and consumption."2' 22, This objective was to be attained principally through operating a system of variable export quotas to insure adequate supplies at remuner- ative prices and in the longer run it was envisaged that policies directed toward diversification from coffee to other economic pursuits would relieve the pressure of over-supply. 23. The Agreement did not expressly define the "tequitable" level at which prices would be stabilized but implicitly set a floor price by record- ing that "the Members agree on the necessity of assuring that the general level of coffee prrices does not decline below the general level of such prices i 1962."l Later on, beginning in 1965, the International Coffee Council_ adopted a flexible price stabilization system designed to mitigate short-term price fluctuations but adjustable each year to changing market conditions. 24. Thus the operation of the Agreement has revolved around the regulation of exports, incorporating the quota mechanism and the pricing policies, and the longer-term objective of production controls and diver- sification. Since these fundamental aspects of the 1962 Agre,:ient have been essentially preserved under the renegotiated Agreement, it is worth- while reviewing them as a basis for a discussion of the 1968 Agreement in Chapter III. The ICO has also dealt with the important questions of the removal of obstacles to consumption and the promotion of coffee consumption. THE REGULATION OF EXPORTS 25. The regulatory system under the 1962 Agreement comprised basic export quotas, effective annual export quotas (including waivers, special export entitlements and penalties), price policies (including a quota adjust- ment mechanism) and an enforcement or control system. Basic Quotas 26. The basic quotas, listed in an Annex A to the Agreement, determine the basic percentage share assigned in any given year to each exporting member country in the aggregate exports to the traditional markets, i.e., all coun- tries other than those listed as "new markets" or Annex B countries. These 1/ International Coffee Agreement, 1962: Article 1, Clause 1. 2/ International Coffee Agreement, 1962: Article 27, Clause 2. 3/ The highest legislative authority of the International Coffee Organi- zation. - 10 - basic quotas are expressed in the Agreement in absolute terms, i.e., in terms of a specific number of bags of coffee for each country. However, the operational significance of each quota is not in its absolute value but in its implied ratio to the total basic quota since, as will be seen, the annual quota can differ substantially from the basic global quota in the Agreement, and is pro-rated to each country in proportion to its percentage share of the basic quota in the Agreement. 27. The Agreement does not contain the formula used in arriving at the basic export quotas. A rough, highly pragmatic formula was, however, hammered out at the Coffee Conference with an eye to permitting the neces- sary accommodations among countries needed to help them reach an agreement. Countries were allowed to choose either two years 1961/62-1962/63 or four years 1959/60-1962/63 as a basis for computing their base year exportable production (using USDA data). These computed base figures were then reduced by the following percentages - for base estimates up to 25,000 bags, nil; 25,000 - 500,000, 6%; 500,000 - 1,OOO,o00, 8%; 1,000,000 - 2,000,000, 10%; over 2,000,000, 12%; Brazil, 30%. The result for each country was then further reduced by 1%. However, so many exceptions to this formula were made that in the end, the original formula was followed only in the case of Colombia. Finally, a further reduction was negotiated in the Brazilian quota and all other countries received upward adjustments of their formula- derived quotas. For the producing countries who joined the Agreement in later years, their basic quotas were negotiated with the Coffee Council in each case. 28. As noted above the basic quotas do not cover exports to countries designated as "new markets.'? This is a measure to encourage increased coffee consumption in such countries. These "new markets,t specifically listed by country in Annex B to the Agreement, are defined as those "hari,g a low per capita consumption and considerable potential for expansion."_' They comprise Japan, USSR, Poland, Hungary, Republic of South Africa, Thailand, countries surrounding the Persian Gulf and a number of other smaller importing countries. However, any coffee re-exported from any of these countries is charged to the quota of the country of origin. In addition, the exporting member countries are expected to limit their aggregate exports to the new markets to the level of consumption requirements of those countries as determined by the Coffee Council at the beginning of each coffee year. Annual Quotas 29. VLile the basic quotas provide the basic guideline for sharing the market, the annual quotas reflect the Coffee Council's estimate of the market requirements from year to year. To arrive at the annual global quota the Coffee Council each year makes a determination, at least 30 days before the beginning of the new coffee year on October 1, of the total world 1/ International Coffee Agreement, 1962: Article 40, Clause 1. - 11 - import requirements (at an undefined "fair" price level). This figure is then successively reduced by estimates of (a) probable exports from ncn- member countries, (b) estimated shipments from dependent territories to their respective metropolitan countries and (c) estimated exports by member countries to non Suota markets. It is further adjusted for likely changes in inventories.- The resultant global quota is then distributed pro rata among the member exporting countries. In practice, however, the system has not operated quite as rigidly as this because the pro rata distribution has been modified by the grant of numerous waivers, special export authorizations to individual countries to relieve financial diffi- culties, such as are caused when an unusually large crop greatly exceeds a country's normal quota. 30. Indeed, a number of countries were dissatisfied with their basic shares right from the inception of the Agreement. To assure a possible revision of their basic quotas, the Agreement provided that "during the last six months of the coffee year en ding 30 September, 1965, the Council shall review the basic export quotas- This mandate, coupled with the provisions relating to production controls, created difficult issues for the Council when it took up the review of basic quotas in 1965. The larger producing countries, principally Brazil and Colombia, ware unwilling to agree on a revision of basic quotas without simultaneous specific guarantees that efforts to control production would be intensified by the member countries. They felt that the viability of the Agreement itself would be endaigered unless production was controlled. (Surveys and studies by th1e Council on this issue revealed that most exporting countries were expectLig their exportable production to grow much faster than the expected future increase in world demand.) On the other hand, almost all countries, except the two principal producers, feared that production controls would probably reflect historical shares in world trade andthis exert a relatively heavier incidence on their future output. The issue was never resolved for the remaining life 1/ For example, in September 1967, the global quota for 1967/68 was arrived at as follows: Million bags Percent of 60 kilos each Share World Import Requirements 51.2 100.0 Less shipments from non-member exporters 0.4 0.8 Less certain shipments from dependent territories (e.g. from Angola to Portugal) 0.5 1.0 Less shipments to non-quota markets 2.7 5.2 Inventory changes 0.0 0.0 Global Quota 1477. 93.0 2/ International Coffee Agreement, 1962: Article 28, Clause 2. - 12 - of the 1962 Agreement. However, widespread resort to the grant of waivers-/ by the Council in 1966/67 and 1967/68, as interim relief to most of the disgruntled countries, and leniency in the imposition of penalties for over- shipment had virtually the same effect as the revisan of basic quotas. Price Policies 31. The most important provision affecting the adjustment of quotas was the price policies pursued by the Council. The Agreement had stipu- lated that prices should be "equitable" and if there were "marked price rises or falls occurring within brief periods_,i12/implying a period of a couple of weeks or so, the quotas might be adjusted by the Council with a view to stabilizing the market. It did not state, however, what specific price level was considered "equitable" for the exporters and importers although the Agreement envisioned, as mentioned before, that the general level of coffee prices should not be allowed to decline below the general level of such prices in 1962. Accordingly, in 1963/64, the first full year of the Coffee Organization's existence, quotas were adjusted frequently, either upward or downward, with a view to maintaining prices stable at what- ever levels were determined to be agreeable to the Council. This system proved awkward, time-consuming and impractical and at times raised uncer- tainties in world markets regarding possible Council action thereby desta- bilizing prices. 32. With a view to streamlining the operation of the quota system and increasing market stability, a semi-automatic method of adjusting quotas was introduced f March 1965, whereby the Council established an Indicator Price Range,- with a floor of 38 cents per pound and a ceiling of 44 cents (see table below). If the indicator price remained below the floor for fifteen consecutive days, the global quota (and hence the pro- rated country quotas) was adjusted downward and if it stayed above the ceiling, quota was adjusted upward. There were, however, limitations on 1/ Article 60 of the Agreement provided that the Council might grant a waiver to a member country which, on account of exceptional or emer- gency circumstances, force majeure, constitutional obligations et al, was likely to suffer serious hardship. The affected countries argued that even bumper crops came under that rule, contending that large unsold stocks would put an unbearable burden on their respective economies. 2/ International Coffee Agreement, 1962: Article 34, Clause 5. 3/ The indicator price was defined as the sLmple arithmetic average of the daily (New York spot) prices of the three basic groups of coffee, namely, Mild Arabicas, Unwashed Arabicas and Robustas. The Mild Arabicas' price was based on Colombian Mams, El Salvador Central Standard, Guatemala Prime Washed and Mexico Prime Washed; Unwashed Arabicas referred to quotations for Santos 4 and the Robusta price was based on Angola Ambriz 2AA, Ivory Coast Superior 2 and Uganda Native Standard. - 13 - the extent to which quotas could be adjusted in this manner.- The system remained in effect for the coffee years 1964/65 (second half) and 1965/66. Although it wvas an improvzement over ad hoc adjustments of quotas, the system, nevertheless, tended to treat coffee as a homogenous commodity and dis- regarded differential price movements in the various types of coffee. HISTORY OF INDICATOR PRICE RANGES (U.S. ¢ per lb. ex-dock New York for prompt shipment) 1964t/65 & 1963/64-/ 1965/66 1966/67 1967/68'_ Floor Ceiling Floor Ceiling Floor Ceiling Floor Ceiling Colombian Mild Arabicas - - ( (_ 43.50 47.50 38.75 42.75 Other Mild Arabicas - - ( ( 40.50 44.50 37.25 41.25 Unwashed Arabicas - - 37.50 41.50 35.25 39.25 Robustas - - _ - 30.50 34.50 30.50 34.25 Average of the three gradesh/ 38.00 44.00 a/ Specific price not in force. b/ A:lithmetic average of Mild Arabicas (Colombian Milds and Other Milds), Unwashed Arabicas and Robustas; system introduced in March 1965. c/ Computed as follows: (i) Colombian M,Eams is taken as representative of Colombian Mild Arabicas; (ii) the arithmetic average of El Salvadoran Central Standard, Guatemalan Prime lWashed and Mexican Prime Washed is taken as representative of other M4ild Arabicas; (iii) Santos 4 is taken as representative of Unwashed Arabicas; and (iv) the arithmetic average of Angolan Ambriz 2AA and Ugandan Native Standard is taken as repre- sentative of Robustas. 33. Most of the importing countries and a number of the exporting coulitrIes (particularly Robusta exporters) favored a system of selective adjustment of quotas whereby they would be adjusted separately for the major groups of coffee to reflect more accurately differences in the supply- W-Liafta anci price movaluints affecting each group, as opposed to the one indicator price system unAer which such distinctions were ignored. Acqui- escing to these demands for ftatrther rationalizing the price mechanism and to insure that the supply of the various types of coffee was made more responsive to changes in consumer denand, the Council. rnplaoed the composite Indicator Price Range system with a selective system. 1/ For example, 1964/65 quotas could be adjusted upward or downward to a maximum extent of 6 percent (Resolution No. 67). - 14 - 34. Under the "Selective Price System" four price ranges were estab- lished for the four main groups of coffee, Colombian Mild Arabicas, other Mild Arabicas, Unwashed Arabicas and Robustas. and member exporting coun- tries were classified into these four groups.1V The ranges were determinoed after extensive discussions among the member countries and consultations with the private trade and reflected historical price relationships among the four groups of coffee. If the daily average price of any group, taken over a period of fifteen consecutive market days, remained below the floor or above the ceiling, the quota for that particular group was adjusted downward or upward. There was, however, a limit on the extent to which the quota for any group could be adjusted downward although no such restric- tion was applicable to upward revisions. 35. Thus, over the life of the 1962 Agreement, the price policy of the Council was gradually refined and increasingly differentiated. 36. The gradual shift to the selective adjustment of quotas has also represented, of course, a further modification of the strictly Eyr rata principle of market sharing. A year by year comparison of the in.ttial country quotas fixed at the beginning of a coffee year and the final quotas as they stood at the end of the year are presented in Table 4 to show the extent to which country quotas were modified during the course of various years. The differences between the initial figures and the corre5ponding final figures reflect changes resulting partly from price stabilization adjustments and partly from the grant of waivers, etc., authorized during the course of that year. The Control System 37. The enforcement of quota controls has remained a difficult problem throughout the life of the Agreement. The difficulties stemmed from the continued tendency of production to exceed demand and the attempts of some countries to unload their surpluses by using the existence of non-quota markets as a device for evading the quota restrictions. In view of the regulation of exports to quota markets, virtually the entii^e pres3ure of oversupply shifted to the non-quota markets and had the effect of creating a sort of two price system, one for the quota and the other for thgnon- quota markets, with prices being considerably lower in the latter.-' This 1/ For practical reasons, the entire output of a country was allocated to the predominant type produced by that country. 2/ The following estimates of average import unit values for 1963/65 tend to substantiate this hypothesis: US $ per bag (i) Western Europe, U.S.A. and Canada (Main traditional markets) 48.80 (ii) Japan (New market) 42.30 (iii) Underdeveloped (Traditional markets) 39.70 (iv) Underdeveloped (New markets) 32.90 Source: Compiled from tho data published by the FAO based on Traditional and New Markets as defined by the ICO. - 15 - two price system tended to aggravate the control problem because it made it lucrative for traders to tranship or divert coffee from the Inew markets? to the traditional markets. Thus, the existence of su-k markets tended to work as a loophole in the evasion of the quota system._ 38. To cope with the problem of evasion of quotas, the Agreement provided for a system of Certificates of Origin and Re-export to accompany all shipments of coffee from member countries. In this way a check could be provided that total imports into quota countries from each member ex- porting country did not exceed that country's export quota. The system, however, became fully operative only late in 1964/65, partly because a legislative delay in the United States, the main importer, had impeded its universal application. Unfortunately, even when fully implemented this system proved to be of only limited effectiveness. In 1965/66, large scale evasions of the control system came to light. ICO estimates indicated tha t as much as two and a half million bags of the so called "tourist" coffee 2 reached the traditional (i.e. quota) markets from exporting members without being debited to their quotas. Such illegal shipments exerted downward pressure on prices and placed a considerable strain on the operation of the Agreement. In 1965/66, prices, on the average, declined by about 10 percent, although causes other than quota evasion also contributed to this decline. 39. In 1966/67, therefore, the Council adopted additional measures to close the loopholes in the control system. To discourage above-quota exports to quota markets through the device of tourist coffee, it directed that future imports by members from non-members must be limited to average annual imports in 1960/62 from those countries. The adoption of this measure also meant that thenceforth non-members would not share in the growth of the quota markets. In addition, a system of coffee export stamps was introduced to reinforce the Certificates of Origin. Exporting members were provided with a quantity of stamps each quarter corresponding to their authorized exports for that quarter. This was designed to put a stop to the practice of some exporting member countries of issuing certificates in excess of their quotas. Importing members were required to refuse admission to coffee not duly stamped. 4o. Although the Control System has been strengthened greatly, parti- cularly since the Stamp System was introduced, it is not fool-proof. Prob- lems continue to be encountered with regard to certification of re-exports, 1/ It may be pointed out that some exporting countries, as a measure of restraint and pursuant to a provision of the Agreement (Art. 40), restrict exports to non-quota markets. 2/ Coffee trans-shipped by exporting member countries through non-member exporting countries or re-exported from the non-quota markets in order to disguise its origin. In this way, an exporting member country could increase its exports to quota markets beyond its legal quota. - 16 - especially those involving Western European ports.- Moreover, unusually large imports into some of the Annex B (non-quota) markets seem to imply the possibility that they will be re-exported in the future. Nonetheless, the encouraging fact is that the ICO has increased its surveillance of all coffee shipments and the Council has shown readiness to adopt additional control measures to cope with new situations. However, the success of the control system will necessarily depend on the extent of cooperation extended by the member countries. PRODUCTION CONTROLS AND DIVERSIFICATION 41. Recognizing that as long as surpluses continued to accumulate there could be no permanent solution to the coffee problem, the Agreement had stipulated that "not later than one year after the Agreement enters into force, the Council shall ... recommend production goals" for each member country anid for the world as a whole. But the problem of control- ling production on an internationally coordinated basis proved to be such a difficult and involved task that it has remained unresolved for the life of the 1962 Agreement. 42. Arrangements were made in November 1965 for a stucy to be sponsored jointly by the ICO, FAO and the World Bank to make supply and demand projections, and consider the conditions of coffee production including the problems and possibilities of diversification. The aim was to examine the possibilities for achieving equilibrium in the coffee economy and to provide a rational basis for discussion and action on pro- duction goals and consequent diversification. Pending the completion of the study, expected in the latter part of 1968, the Coffee Organization prepared interim studies projecting supply and demand to facilitate its negotiations on longer-term issues of production control and diversifica- tion. However, the Council was unable to conclude its work on the estab- lishment of production goals. 43. Intertwined with the issue of production targets has been the question of assisting the surplus-ridden countries in diversifying out of coffee into other economic pursuits. It was felt that the availability of financial and technical assistance would facilitate the implementation of production controls. In 1966, the Council approved in principle the estab- lishment of a Coffee Diversification Fund but let the scale of contributions and the size of the Fund quite open. In 1966 and 1967 discussions on the establishment and management of the Fund were continued by committees established by the Coffee Council. Certain international institutions (the World Bank, the Inter-American Development Bank and tne Food and Agriculture Organization of the United Nations) participated in some of these discussions in a technical advisory capacity. Finally, new guide- lines for the Diversification Fund were embodied in the renegotiated Agree- ment of 1968. These are discussed in detail in Chapter III. 1/ Re-exports of coffee are chargeable to the quota of the country of origin but proper certification is required in order for this system to work, - 17 - EXPANSION OF COFFEE CONSUMPTION 44. Other problems dealt with by the ICO have included the removal of obstacles to consumption and the promotion of coffee consumption. Obstacles to Consumption 45. The growth of coffee consumption in a number of countries is considered to be adversely influenced by various hindrances such as quota restrictionss import duties (including preferential tariffs), fiscal leviess etc. It has been estimated that in 1962 duties and fiscal charges levied on coffee amounted t Vabout 30% of the value of coffee imported into the developed countries.- In recognition of the fact that such measures "may to a greater or lesser extent hinder the increase in consumption of coffee," the Agreement (Article 47) had provided for an undertaking from the member countries that they would "investigate ways and means by which the obstacles to increased trade and consumption could be progressively reduced and even- tually, whenever possible. ated, or by which their effects could be substantially diminished.'12 Although the Coffee Council has provided a useful forum for the airing of country viewpoints on this very sensitive issue, little meaningful results were achieved during the life of the 1962 Agreement. 46. A recurrent issue related to the problem of import duties, although it is more directly relevant to trade discrimination than to the problem of coffee consumption, is the matter of preferential tariffs. Due to his- torical reasons, preferential tariffs on coffee tend to benefit only cer- tain countries, mostly in Africa. During the negotiation of the 1968 Agreement the Latin American countries strongly advocated the abolition of such preferential tariffs and quotas (as well as other restrictions). A number of countries, principally the Common M4arket and the Associated States, were opposed to any unconditional abolition of preferences. Al- though provisions similar to those in Article 47 of the 1962 Agreement (see above) have been retained in the 1968 Agreement, it remains to be seen if any meaningful progress will be made in this field. Prmoction 47. As a further means of expanding coffee consumptions, the exporting countries agreed to finance promotional activities and to this end the ICO established a World Coffee Promotion Committee (WCPC) in 1964. The acti- vities of the Committee cover advertisings, public relations, consumer education and research. The Committee operates a Promotion Fund financed by a compulsory levy on exports of coffee to quota markets. In 1965/66, the Committee spent about $5 million on coffee promotion in the major 1/ UNCTAD Proceedings, Vol. III. Commodity Trade, 1964; based on page 35. 2/ 'International Coffee Agreement, 1962: Article 47, Clause 5(a). - 18 - consuming countries. In 1966/67, the campaign funds were raised to $7 million, with $4.4 million earmarked for promotion in the United States alone. The 1967/68 promotion fund was also set at about $7 million. EVALUATION OF THE 1962 AGREEMENT 48. In spite of the many strains to which the Agreement has been subjected and the lack of substantive progress towards the longer-term goal of bringing about an equilibrium between supply and demand, the achievements of the International Coffee Organization have been substantial. 49. The importance of the Coffee Agreement does not rest solely on the fact that coffee is the most important agricultural commodity exported by the developing countries or that this is the anly international commodity accord that has been continuously in meaningful and effective operation in recent years. The significance of the Agreement also 3:es in the fact that it has been able to prevent a collapse of the coffee market, by insulating oversupply through an export quota mechanism. This has been achieved with- out a significant disruption of normal trade practices. 50. It is also worth noting that the main price objective of the Agreement has been stabilization of prices at reasonable levels. As will be seen from Chart 1, when the Agreement was negotiated in 1962 most coffee prices were at postwar lows. Thereafter prices firmed in 1963 and then rose somewhat sharply in j2L96h. However, the 1964 increase was due to severe frost damage in Brazil.;V Since then Arabica prices have gradually declineds, reflecting continued heavy pressure of supplies and Robusta prices have remained stable, reflecting lesser supply pressure, and relatively stronger demand. The Agreement in effect has tried to stabilize prices, rather than trying to raise them or peg them at a fixed level, by using its quota mecha- nism to cushion the effect of changes in supply on prices. While prices under the Agreement have remained well below postwar highs, it is generally agreed that these price levels have been satisfactory for both producing and consuming countries. 51. It is hard to quantify the benefits to the producing and consuming countries that have accrued over the life of the Agreement. It is widely recognized that an assured supply of a commodity at a stable price is one of the important prerequisites for the orderly growth of the market for that product in an economically advanced society. In the case of the developing countries, their export earmings derived from coffee have risen by about $500 million between 1962, the year of lowest prices (and the one preceding the vgreement) and 1966 when total exports amounted to about $2,320 million:_/(at prices higher than those of 1962 but well below the high levels of the 1950's). But it is a moot point to say that without the 1/ According to estimates published by the United States Department of Agriculture, in 1964/65 Brazilian exportable output declined to 3 mil- lion bags as compared to 21 million bags in 1963/64. During the same period, world exportable production dropped by 20 million bags. 2/ See Table 8. The value of exports in 1967 declined by over $100 million as compared to 1966, due to a fall in price, - 19 - Agreement coffee earnings would have stagnated at the 1962 level. In the absence of the Agreement, prices might have fallen further (IC0 had esti- mated that without the 4greement prices would fall to one half of their current /19667 level).&4 But it is also likely that in due course a chaotic price slump would have reacted on production and (although to a lesser extent, due to the relative inelasticity of demand) on consumption, reinforcing the traditional boom and bust swings in earnings from coffee. In this connection, it is worth pointing out that the total annual vaLue of coffee exports since 1954 has not yet matched the high level of two and a half billion dollars reached in that year, although in the intervening thirteen years the annual volume of exports has increased by two-thirds from 29 million bags in 1954 to 50 million bags in 1967 (Chart 3). To avoid comparing single years it is interesting to note that coffee earnings of the developing countries averaged $2,350 million per annum in 1953/57 as compared to $2,180 million per annum in the most recent period of 1963/67 (Table 8). 52. The foregoing also brings out that the Agreement has not maximized the coffee earnings of exporting countries but this in fact was not an ob- jective of the Agreement. Such an objective would have required severe supply cutbacks and consequent higher prices. However, such measures, unless accom- panied by a successful diversification, would have led to unemployment and possibly displacement of populations within the coffee producing countries. At the same time it would have reduced the cooperation of the consuming countries in making the Agreement effective. 53. The most noteworthy contribution of the Agreement lies in the fact that it has led to crderly growth, on a moving average basis, in the export earnings of the developing countries derived from coffee. Although the long-term objectives of the Agreement remain unrealized, the groundwork that was laid in this period has undoubtedly facilitated the work on pro- duction control and diversification that will be undertaken during the life of the recently negotiated International Coffee Agreement of 1968. It should also be noted that average world output has shown little change over the past five years although consumption has been expanding steadily. The absence of expansion in world output has been the result of restraints exercised by Brazil and Colombia. The existence of an Agreement may also have restrained the expansion of new plantings in other countries. 54. An important factor that lies behind the effectiveness of the Coffee Agreement is that after a series of efforts, the exporting coun- tries succeeded in bringing the importing countries into the Agreement. Considering that coffee is grown by a large number of countries throughout the tropical world, the policing of the control system of the Agreement would have been a virtual impossibility without the full cooperation of the importing countries. Indeed, the administrative demands of an effective enforcement system are hard to meet, even for developed countries and more so for the developing countries. After years of operation of the Agreement, some exporting countries still lack an effective mechanism even for regis- tration of export sales. 1/ Economics Department, IBRD; "Report on the International Coffee Council"; Sec.M66-339, October 27, 1966. EXPORTS OF COFFEE FROM THE DEVELOPING COUNTRIES 4.0 r - 7 T - 4.0 3.5 - - t 3.5 3.01 -- _ 3.0 QUANTITY / \ / (MILLIOS OF MERI TONS) 2.5 - ,,< 2.5 2.0 / -___ 2.0 / ~ ~ ~~~~~~~~~~~~~~~~~.4 llVALUE (BILLIONS OF U 5 DOLLARS) 0 0 '50 '51 '52 '53 '54 '55 '56 '57 '58 '59 '60 '61 '62 63 '64 '65 '66 '67 '68 '69 '70 I SOURCE. Table 8. m (R)IBRD-3968 q (A - 21 - III. INTERNATIONAL COFFEE AGREE1NENT. 1968 55. The International Coffee Council, after prolonged and difficult negotiations extending over several months, approved, on February 9, 1968, the International Coffee Agreement, 1968, as the successor to the existing Agreement,l/ due to expire September 30, 1968. By March 31, 1968, the closing date,Z/ 53 member governments (34 exporting and 19 importing) had signed the Agreement. 56. The signatory countries are required to deposit their instruments of approval, ratification or acceptance by September 30, 1968. The Agree- ment sh enter into force definitively on October 1, 1968, if a specific number3 of governments have deposited their instruments of approval, rati- fication or acceptance. Alternatively, it shall enter into force provision- ally_ until the aforesaid requirements are satisfied. 57. The objectives and the basic mechanism of the 1968 Agreement, viz, maintaining price stability by insulating supplies through an export quota system in the short run and balancing supply and demand in the long run, remain unaltered. Nevertheless, many articles, particularly those concern- ing basic quotas, policy towards grant of waivers, the price mechanism, exports to new markets (Annex B countries), treatment of processed coffee, production goals and the diversification fund have undergone substantive changes. The following is a brief review of the discussions and decisions on the important operative clauses of the new Agreement. Basic Quotas 58. Country positions on the revision of basic quotas, the subject on which differences in viewpoints have been constantly aired since 1965, be- came the focal point of the renegotiation of the Agreement. The positions 1/ A simple extension of the International Coffee Agreement, 1962, was not possible because the Articles of that Agreement provided for either the extension or the renegotiation of the Agreement but not both. 2/ This was a mere formality because countries can accede to the Agreement at any time. 3/ I.e., governments representing at least twenty exporting members holding at least 80 percent of the votes of the exporting members and at least ten importing members holding at least 80 percent of the votes of the importing members. 4/ For provisional entry into force, a simple notification by a specific number of governments, containing an undertaking to apply the Agreement provisionally and to seek approval, ratification or acceptance in ac- cordance with its constitutional procedures, would be considered as sufficient. - 22 - on this issue were rigid, and lengthy debates ensued. Various versions of a formula to revise basic quotas were devised, but none proved fully acceptable and a deadlock set in. 59. Finally a set of figures was compiled which took into account for each country an agreed base year figurel/ plus additions to allow for the coming into bearing of coffee planted before the Agreement came into force, plus additions for other factors such as the extent of accumulation of surplus stocks and the extent of dependence on coffee for exchange earnings (a concession to countries which depended on coffee for 40 per- cent or more of their exchange earnings). These figures added up to 55 million bags, compared to the previous total basic quota of 46.6 million bags and the 1966/67 global effective quota of 47.9 million bags. The new total, nevertheless, was taken as the new global basic quota. The individual country figures were then further altered, without affecting the total, in a private caucus of the principal signatories. 60. These negotiated basic quotas, shown as Annex A of the new Agree- ment, will be used for the next five years, 1968/69 - 1972/73, to prorate annual quotas. 61. These basic quotas, apart from implying changes in country shares (discussed in later paragraphs) incorporate another important change in that countries whose average annual authorized exports (actual quota exports) of coffee for the preceding three-year period were less than 100,000 bags, have not been allotted a basic quota. Instead, the 13 countries falling into this category (Bolivia, Congo /Brazzaville7, Cuba, Dahomey, Gabon, Ghana, Jamaica, Liberia, Nigeria, Panama, Paraguay, Sierra Leone and Trinidad and Tobago) have been given specific export entitlements for 1968/69 (see footnote 1 in Annex A) with the proviso that in each of the subsequent years their entitlements shall be increased by 10 percent of the initial quota (simple rate of interest) until the maximum of 100,000 bags is reached.Z/ Only Sierra Leone could reach this limit in the fourth year (1971/72) and qualify for a basic quota thereafter. During the time that they do not qualify for a basic quota, however, these countries will suffer a cut in their voting power. 1/ The base year figures roughly corresponded to a basic formula which started with the exportable production (with some adjustments) of each country for the higher of either the average of the four years 1959/60- 1962/63 or the average of the two years 1961/62-1962/63. This figure was then reduced as follows to allow for retentions, i.e.: for coun- tries producing less than 25,000 bags, no reduction; 25,000 to 500,000, 6 percent; 500,000 to 1,000,000, 8 percent; 1,000,000 to 2,000,000, 10 percent; 2,000,000 to 10,000,000, 12 percent; and more than 10,000,000, 30 percent. 2/ These exporting countries at first asked that there be no limit on annual exports of up to at least 100,000 bags. After presenting intermediary demands, they made a bid for a 10 percent compound increase every year but settled for a 10 percent simple increase. - 23 - 62. In the case of Burundi, Congo (Democratic Republic). Cuba, Rwanda and Venezuela, which experienced major cuts in their quotas btit (except for Cuba_l/) retained their position in Annex A (i.e., as countries holding basic quotas and full voting power), an escape clause has been provided (set forth in footnote 2 of Annex A) whereby their quotas could be raised in any year up to a specified limit provided that they showed acceptable evidence of an increase in their exportable production. 63. A comparison of the basic quotas under the 1962 Agreement and the proposed basic quotas under the new 1968 Agreement is shown in Table 6. Even though the new basic quotas generally show higher absolute figures, as compared to the existing basic quotas, it will be seen from Column 9 (percent change in country shares) that the new basic quotas imply cuts in the share of the quota market for 13 countries, ranging from a reduction of 42.8 percent for Venezuela to 1.5 percent for Togo. Brazil and Colombia yielded 2.7 and 2.6 percent, respectively. The rest of the reductions were spread among small exporters. Fifteen countries received quota increases varying between 39.2 percent for KenyaZ/ and 2.4 percent for the Dominican Republic. The principal beneficiaries of increases in quotas included Kenya (+39%), Tanzania (+34%), Honduras (+25%), El Salvador (+11%), Guate- mala (12%), Nicaragua (+10%), Ecuador (+14%) and, within the OANCAF Group, Cameroon (+10%), Central African Republic (+12%), and Ivory Coast (+11%). 64. It is, however, important to note that these changes in basic quotas were to a large extent a formalization of the adjustmer'its that had already been made on a provisional basis in the form of speci.-.9. export en- titlements (waivers) given to a number of countries in the la-st two years of the 1962 Agreement. Comparing the new basic quotas with the effective initial quotas for the coffee year 1967/68, the last year of the 1962 Agreement, it will be noticed from Column 10 of Table 6 that, leaving aside Burundi, Congo (D.R.), Rwanda and Venezuela, whose special status was discussed above, only minor modifications were made in all other cases except Tanzania, which received a substantial (+36%) increase, Ecuador (+16%), Guatemala (+10%), Honduras (-12%) and Indonesia (+13%). The Brazilian and Colombian shares turned out to be somewhat higher under the 1968 Agreement than in the last year of the 1962 Agreement. 65. The comparative figures for the 13 countries which have not been allotted basic quotas under the 1968 Agreement are shown in Table 7. With the exception of Cuba, changes in the export allocations of other countries were minor. Waivers 66. During the 1962 Agreement, waivers had become a "normal" expec- tation and a considerable amount of the time of the Organization was spent 1/ Cuba suffered the largest quota cut, lost its bid for a basic quota and appears in both the footnotes of Annex A. 2/ However, Kenya suffered a reduction when compared to the share held in 1967/68. See Columns 9 and 10 of Table 6. - 24 - in handling waiver requests. Because of the unhappy history of arguments over waivers, the debate on the article on waivers was rather difficult. Brazil and Colombia maintained that waivers were contrary to the spirit of the Agreement, had been rather abused in the past, tended to distort the allocation of quotas and should be dispensed with. Most of the other exporting countries maintained that the operating clauses of the new Agree- ment were very severe and that waivers should be denied only when a country violated the provisions relating to production goals and ICO policies rela- tive to stocks. They maintained that an escape clause must be kept to provide relief in unforeseen cases of extreme hardship. 67. Unlike that in the 1962 Agreement, the new article governing waivers, by strictly defining "force majeure", forecloses the possibility of waivers except in cases where events such as strikes, floods, civil strife, war, etc., interfere with the movement of coffee. This implies that future exports to quota markets will be determined largely by shares set by the basic quotas and by the modifications brought about by the selective system of quota adjustments based on price movements of the various groups of coffee. Price Policies 68. As discussed in Chapter II, the 1962 Agreement neither csntained any specific price goals nor prescribed a system for adjustment of q'uotas to stavbilize prices. Modifications, on a temporary basis without axiending the Agreement, were brought about by the Council in 1965 by d2 fining the Indicator Price Range within which the prices were to be stabilized. The system was then revised in 1966 when "selectivity" was introduced whereby separate price ranges were prescribed for the four main groups of coffee. 69. The new Agreement still does not mention any specific price, apart from retaining the clause that prices will not be allowed to decline below the general level of prices prevailing in 1962. However, it does make an important policy departure from the 1962 Agreement by incorporating an article relating to the selective system of adjusting exports on the basis of price changes in the various groups of coffee. This provision implies that for the duration of the new Agreement separate price ranges will be maintained for Robustas, Unwashed Arabicas and the two groups of Mild Arabica coffees. These ranges, however, are subject to modification from year to year, as was done in the last two years of the 1962 Agreement, to reflect changes in market conditions. This system of selective price quota adjustments is designed to insure that shifts in consumer demand for the various types of coffee will be satisfied through corresponding adjustments in the export quotas for the various types of coffee. 70. Price zones for each of the four groups are to be set by the Council at the beginning of each coffee year at the time when the market requirements and the effective quotas are determined for the following year. The Council may set different ranges each year, altering them up- wards or downwards (as has been done in the past) depending on the market conditions. If for any group the price stays above the ceiling or below the floor for fifteen consecutive market days, the quotas for that group - 25 - would be adjusted upwards or downwards to stabilize prices within the range. However, as a concession to the exporters of mild coffees (chiefly Colombia, Mexico and Central America),!/ it was decided that "the Council shall annu- ally set a limit, not exceeding 5 percent, by which annual quotas may be reduced under any system so established."1 This implies that there is no limit on the cumulative upward adjustments that may be made in effective quotas during the course of a coffee year if prices tend to penetrate the ceiling of the indicator price ranges, but that there is a limit (5% of the initial annual quota) on the cumulative total by which the annual quotas of countries in a particular group could be reduced during the year if the price for that group of coffees repeatedly remained below the floor. In the latter case where the 5% selective quota cut has failed to stabilize prices for that group or groups, the Council may reduce quotas for all countries, irrespective of the differences in price movements among the various types of coffee, with a view to strengthening the general level of coffee prices. New Markets 71. The 1962 Agreement permitted unrestricted exports to "new markets" (i.e., the non-quota import markets) listed in Annex B to the Agreement with the safeguard that re-exports to traditional markets were sur-oosed to be charged to the quota of the country of origin. The new Agreement retains a slightly amended list of Annex B countries (see Annex B in the Appendix) even though the major importing countries, particularly those in the Common Market and some exporting countries, had urged that Annex B should be elim- inated and that henceforth exports to all markets should be charged to quotas. The important Annex B markets are Japan, USSR, some countries in Eastern Europe and countries bordering the Persian Gulf. 72. Although it has been decided to retain Annex B, thereby assuring that exports to "new markets" will continue to be immune from quota regu- lations. additional administrative measures have been instituted to reduce illegal re-exports or diversions of coffee from Annex B countries to tradi- tional markets. Henceforth, steps will be taken to trace such re-exports or diversions and to charge them to the quota of the exporting member. How- ever, in practice, it may not always be possible to determine the origin of the coffee and partial evasion of the quota control system may continue.a/ / Exporters of mild coffees opposed the selective adjustment of quotas largely because in 1966/67 their quotas had suffered a cut of 1.5 million bags under this system whereas those for Robustas had been in- creased by 0.5 million bags (Table 4); the importers and the Robusta exporters strongly favored it. 2/ The ICO has reported that in the first four months of the 1967/68 coffee year, after the above-mentioned measures had gone into operation, seven Annex B countries (Bahrein, Iran, Iraq, Jordan, Kuwait, Oman and Saudi Arabia) had already imported as much as three times their estimated annual requirements of coffee. - 26 - Processed Coffee 73. The 1962 Agreement did not distinguish between exports of proc- essed coffee and green coffee. The green equivalent of processed coffee exports was charged to the quota of the exporting member country and for this purpose agreed conversion factors were established (e.g. the net weight of soluble coffee exports was multiplied by 3 before being charged to the quota). However, the exporting countries were free to encourage or discourage the export of one type or grade of coffee over another. Under the new Agreement, processed coffee will continue to be likewise charged to quotas but the situation with regard to discriminatory inter- vention in favor of particular types of coffee has changed. 74. During the renegotiation of the Agreement, the United States delegation proposed a new clause whereby an importing country would have the unilateral right to impose countervailing duties on the coffee of any exporting member which was giving relatively more favorable treatment to its processed coffee exports compared to its exports of green coffee. The amendment meant that if, for example, a country failed to impose taxes on soluble coffee exports, or on coffee beans sold to the domestic soluble coffee industry engaged in producing soluble coffee for export, in an amount equivalent to the export taxes it imposed on coffee beans, then the importing country would have the unilateral right to impose an import duty on such soluble coffee. The amendment also implied that Brazil, for example, which now sells broken beans only to domestic roasters and permits exports only of whole kernels, would be obliged to sell broken beans to foreign roasters as well. This proposed amendment would have deprived the Brazilian soluble industry of certain competitive advantages that it had been enjoying based on the use of the low cost broken beans and tax advantages. 75. The origin of the move lay in the fact that until 1965 the United States was the world's largest exporter of soluble coffee (Table U1). How- ever, with the building of the soluble coffee plants in Brazil, the situa- tion changed radically and in 1966 the United States became a net importer. The value of total world trade in soluble coffee trade is very small at present (less than 2 percent of the value of world trade in green coffee), but the United States was concerned that the practices described in the preceding paragraph were inequitable and would mnaterially injure their domestic industry. 76. Brazil maintained that the soluble coffee question concerned the treatment of an industrial product versus a raw material, and there- fore the issue should be raised either in the GATT or UNCTAD, which were more appropriate forums for resolving these issues than the Coffee Agree- ment. 77. The rigidity of the differences on this issue not only delayed the approval of the renegotiated Agreement, but also brought the negotia- tions to a near collapse. In order to break the impasse, a high level group was organized to mediate the issue. Finally, a compromise solution - 27 - was worked out and incorporated in the renegotiated Agreement.X' The relevant provisions require that members undertake not to apply dis- criminatory treatment in favor of processed coffee as compared to green coffee. If a member feels that this undertaking is not being complied with, it will bring the matter to the attention of the Executive Direc- tor of the ICO. If, with his mediation, a mutually acceptable solution is not found within 30 days of the complaint, an arbitration panel shall be established. If the panel by majority vote finds that discriminatory treatment does not exist, the petition of the complaining member will be dismissed. If the finding is that discriminatory treatment does exist, the member concerned shall be given 30 days to correct the situation. If the situation is not corrected in this period, the complaining member may take measures to counteract the discriminatory treatment determined by the arbitration panel. However, the Agreement stipulates that "in applying the counter measures Members undertake to have due regard to the need of developing countries to practice policies designed to broaden the base of their economies through, inter alia, industrialization and the export of manufactured products." Production Goals 78. Considering the reluctance with which many countries had treated the question of production goals and diversification under the 1962 Agree- ment., the major exporting countries, principally Brazil and Colombia, sup- ported by the major importing countries, had made it explicit that their acceptance of the new Agreement would be conditional on a definitive pro- gram of action on production goals and diversification. Consequently, the new Agreement specifies somewhat more definitively the time table and prin- ciples governing production controls. The following is a summary of the agreed Article.1 on this subject. (a) Each member country undertakes to adjust its pro- duction of coffee to a level not exceeding that needed for domestic consumptions permitted exports and stocks. The size of stocks would be consistent with the Council's policy on global stocks (still to be defined). Each member country remains free to draw up its own production goal but shall submit its before December 31, 1968, to the Executive Board for formal approval. Unless rejected by the Executive Board, such goal is to be considered as approved. (b) If the production goal proposed by an exporting member is rejected by the Executive Board, then the Executive Board itself will recommend a production goal for the 1/ International Coffee Agreement, 1968: Article 44, Measures Relating to Processed Coffee. 2 International Coffee Agreement, 1968: Article 48. - 28 - exporting member. If approved by the Council, this will become the established production goal for the exporting member whose own production goal was re- jected by the Board. The Executive Board shall also be responsible for defining production goals for those countries which fail to submit any proposals. (c) The Council will keep the production goals under constant review and may revise them to the extent necessary to ensure that the aggregate of the in- dividual goals is consistent with estimated world requirements. 79. It was decided that each producing member would be free to apply whatever policies and procedures it deemed necessary to control its production. However, member countries would be obliged to submit periodic reports to the IC0 on the measures taken to control production and to conform with their individual production goals. If the Council determines that any producing member is not taking adequate steps to comply with the production goals, such member shall not enjoy any sub- sequent increase in its axWnual export entitlement and may have its voting rights suspended.Y/ 80. In laying down the policy guidelines governing the cooperation of importing countries, the Council recommended that "members shall re- frain from offering directly financial or technical assistance or from supporting proposals for such assistance by any international body to which they belong, for the pursuit of production olicies which are con- trary to the objectives of the Coffee Agreement!, whether the recipie t country is a member of the International Coffee Organization or not."vf Diversification Fund 81. The establishment of the Diversification Fund, another issue that had remained unresolved during the 1962 Agreement) represents a substantial scaling down of the size of the Fund from the levels con- ceived originally.!/ The main guidelines that have been laid downW for drawing up the statut6s of the Fund, now under preparation, which must International Coffee Agreement. 1968: Article 48, Clauses 6-8. 1/ International Coffee Agreement, 1968: Article 48, Clause 10. 3/ The original proposals were based on a levy of $1.00 per bag to be contributed to the Fund in convertible currencies. Later the pro- posed levy was reduced to $0.60 per bag of which only about one- fifth would necessarily be contributed in the form of convertible currencies. h International Coffee Agreement. 1968: Article 54. - 29 - be approved by the Council not later than December 31, 1968, include the following points: (a) Participation in the Fund will be compulsory for each exporting member which has an export quota over 100,000 bags. Participation of all other contracting parties shall be voluntary. (b) The contribution of an exporting member of the Fund will equal an amount equivalent to US 60 cents times the number of bags it actually exports in excess of 100,000 bags each coffee year to quota markets. Contributions will be made for five con- secutive years commencing with the coffee year 1968/69. (c) The Fund may, by a two-thirds majority vote, in- crease the rate of contribution to a level not exceeding $1.00 per bag. (d) The contributions of the compulsory participants shall be allocated into three portions, viz., (i) 20 percent of the total contribution will be payable in a freely convertible currency and can be utilized inside the territory of any exporting participant; (ii) most of the remainder of the total contribution shall be utilized inside the territory of the participant; (iii) a percentage of the total contribution within limits to be established in the statutes shall be payable in freely convertible currency for the administra- tive expenses of the Fund. 82. The Agreement stipulates that the statutes of the Fund shall provide for "arrangements that would permit the delegation of appro- priate functions and activities of the Fund to one or more international financial institutions.11-/ 83. On a 60-cents-per-bag basis the total contributions to the Fund will amount to about $150 million for the 5 years. The convertible part (20 percent) will amount to about $30 million. In addition, the United States has promised to contribute $15 million, with a further commitment of $15 million in matching funds (against voluntary contri- butions by other importing members). If the other importing countries agreed to provide $15 million and the United States provided $30 million ($15 million plus $15 million in matching funds), the resources of the fund would amount to about $75 million in convertible currencies usable anywhere and about $120 million for use in the contributing countries. 1/ International Coffee Agreement, 1968: Article 54, Clause 7-c. - 30 - Total contributions available to the Fund would average about $39 million a year, of which $15 million would be convertible currencies usable any- where and $24 million for use in contributing countries. ICO Executive Director 84. At the successful negotiation of the International Coffee Agree- ment of 1968, Dr. Joao Oliveira Santos, who had been associated with coffee negotiations since 1954 and had headed various Coffee Agreements since 1958, resigned and was succeeded/ by Mr. Alexandre Fontana Beltrao, also of Brazil and formerly President of the Pan-American Coffee Bureau, as Executive Dir- ector of the ICO. Concluding Remarks 85. Although a number of new features have been added to the Agree- ment as explained earlier, the framework of the 1968 Agreement remains basically unchanged as compared to the 1962 Agreement. Nonetheless, the new Agreement may work better not only because of constitutional improve- ments incorporated in the Agreement but more importantly because of the administrative tightening of the control provisions, based on the lessons learned from the experience gained during thie past five years. 86. The administrative tightening of the Agreement (such as adoption of a less generous attitude on waivers and closer surveillance of illegal re-exports or diversions from "new markets") will tend to close some of the loopholes which had permitted circuavention of the operative clauses of the 1962 Agreement. This was desirable for a sharing of the world coffee mar- ket on an agreed basis. Some evasion of the control system will almost cer- tainly continue as long as some of the countries are motivated to export their excess production and as long as a wide price differential between the prices in the quota markets and non-quota markets makes it a profitable prop- osition to re-export or divert coffee from non-quota to quota markets. How- ever, the Coffee Council has indicated a readiness to take additional steps, if necessary. Evasion, therefore, is unlikely to assume perilous proportions in the future. 87. The strengthening of the administration of the quota provisions of the new Agreement may force most of the exporting member countries to hold reserve stocks, replenishing them when they have bumper crops and dis- posing of them in times of poor harvests as a means of dealing with their short-term crop fluctuations. Hitherto, many of the smaller exporting countries had been given special waivers from quota obligations to relieve them of the economic burden of carrying stocks. Unlike the past years when reserve stocks were held by only a few of the exporting countries (in coffee, unlike, say, cocoa, consuming countries do not normally hold the bulk of world stocks), the obligation to hold stocks may force a number of countries to invest in larger warehousing facilities and finance the holding of stocks. 1/ For a brief intervening period, Mr. Cyril Spencer served as Executive Director. - 31 - This may well be a difficult proposition for them. Since swings in annual coffee output are inevitable and since the Agreement has neither the means nor an obligation to help countries in dealing with surplus stocks, finan- cially weaker countries may face hardship in times of bumper harvests. On the other hand, stocks accumulated in periods of surplus, provided they are of moderate proportions, could permit a country to fulfill its export quota should it have a shortfall in production in a subsequent year. 88. The possible trend toward stockholding among a greater number of exporting countries may be beneficial for broader considerations, despite the financial burdens. One of the shortcomings of the Agreement has been and remains that its policy on stocks is still undefined even though stocks play an important part in market stabilization. There is no precise obliga- tion on the part of any member country to hold stocks. The reason for lack of progress1/ in this field undoubtedly has been that the stockholding func- tion has been performed primarily by Brazil. A broader sharing of this function among the exporting countries would result in a broader sharing of responsibility and power under the Agreement, as well as the financial burden of stabilization. 89. The Agreement will continue to be a force for orderly growth in the coffee earnings of the exporting countries. Although it stipulates the comparatively modest provision that members agree on the necessity of assur- ing that 'the general level of coffee prices does not decline below the general level of such prices in 1962, n2/ the year of lowest postwar prices, there is every indication that with the Agreement in operation average prices will remain at a level no lower than the prices prevailing in 1967. With consumption growing at an average rate of roughly 2.5 percent per annum, such a price would assure the coffee exporting countries of an average annual increase of at least 2.5 percent per annum in their export earnings from coffee. Even though this is a higher rate than the average annual rate of increase in earnings from all primary commodities combined, other than petroleum, it reflects the acuteness of the need of the developing countries to diversify their economies and expand their non-primary commodity exports. Nonetheless, such an orderly and assured increase in the incomes of the countries largely dependent on coffee has far-reaching implications for the favorable growth of their economies. In this sense, the Coffee Agreement is a significant source of development finance. It may be added that every rise in coffee prices of one cent per pound f.o.b. basis means an increase of about $60 million a year in the total export earnings of the developing countries. 1/ The treatment of stocks has been a very delicate issue since the incep- tion of the 1962 Agreement. In the early years of the Agreement, stocks held by countries were regarded a national secret. Gradually ground was broken and only recently the principle of international verification of stocks was accepted. This partly explains the reason for delay in adopt- ing a meaningful stock policy. 2/ International Coffee Agreement, 1968: Article 27, Clause 2. - 32 - 90. During the lengthy negotiations, the major importing and export- ing countries always commanded sufficient votes (voting power is based on market shares) to dominate the outcome, but they did not take advantage of this power and went to great lengths to accoimaodate the viewpoints of the smaller exporting countries. This must be considered as a tribute to the will of the developing and the developed countries to find ways and means of reaching an understanding on an orderly growth in the coffee market. Expansion in value of exports being an important means of financing de- velopment, the International Coffee Agreement has set an example that has yet to be duplicated by any other important commodity in international trade. INTERNATIOXAL COFFEE AGREEIEZ.17 1968 A%NEX A Basic Export Quotas 1/ (thousands of 60-kilo bags) Brazil 20,926 Burundi 2/233 Cameroon 1,000 Central African Republic 200 Colombia 7,000 Congo (Democratic Republic) v 1,000 Costa Rica 1,100 Dominican Republic 520 Ecuador 750 El Salvador 1,900 Ethiopia 1,,494 Guatemala 1,800 Guinea (basic export quota to be established by the Council) Haiti 490 Honduras 425 India 423 Indonesia 1,357 Ivory Coast 3,073 Kenya 860 Malagasy Republic 910 Mexico 1,760 Nicaragua 550 Peru 740 Portugal 2,776 Rwanda 2/ 150 Tanzania 700 Togo 200 Uganda 2,379 Venezuela 2/ 325 Grand Total 55,0h1 1/ According to the provisions of Article 31 (1), the following exporting countries do not have a basic export quota and shall receive in coffee year 1968-69 export quotas of: Bolivia 50,000 bags; Congo (Brazzaville) 25,000 bags; Cuba 50,000 bags; Dahomey 33,000 bags; Gabon 25,000 bags; Ghana 51,000 bags; Jamaica 25,000 bags; Liberia 60,000 bags; Nigeria 52,000 bags; Panama 25,000 bags; Paraguay 70,000 bags; Sierra Leone 82,000 bags; Trinidad and Tobago 69,000 bags. 2/ Burundi, Congo (Democratic Republic), Cuba, Rwanda and Venezuela, after presentation to the Executive Board of acceptable evidence of an export- able production larger than 233,000; 1,000,000; 50,000; 150,000 and 325,000 bags respectively shall each be granted an annual export en- titlement not exceeding the annual export entitlement it would receive with a basic quota of 350,000; 1,300,000; 200,000; 260,000 and 475,000 bags respectively. In no event, however, shall the increases allowed to these countries be taken into account for the purpose of calculating the distribution of votes. INTERNATIONAL COFFEE AGREEMENT, 1968 ANNEX B Non-quota countries of destination referred to in Article hO, Chapter VII The geographical areas which are non-quota countries for the purposes of this Agreement are: Bahrain Botswana Ceylon China (Taiwan) China (Mainland) Hungary Iran Iraq Japan Korea, Republic of Kuwait Lesotho Nalawi Muscat and Oman North Korea Poland Qatar Romania Saudi Arabia Somalia South Aifrica, Republic of Soutbe2-n Rhodesia South-West Africa Sudan Swaziland Thailand Trucial Oman Union of Soviet Socialist Republics Zambia Note: The abbreviated names above are intended to be of purely geographical s4gnifjcaace and to earry no pe.Utical inp2daticmns whatsoever. LIST OF STATISTICAL TABLES 1. Coffee Price Movements, 1950-1967. 2. Estimated World Supply and Distribution of Green Coffee, 1947/48-1967/68. 3. World Exportable Production of Coffee by Major Countries, 1960/61-1967/68. 4. Initial and Final Quotas, International Coffee Agreement, 1962 5. Exports of ICO Members to Quota and Non-Quota Markets. 6. Comparison of Basic Coffee Quotas under the 1968 Agreement and (I) Basic 1962 Agreement, (II) 1967/68 Initial Effective Quotas. 7. Comparison of Export Entitlements (of Ctuntries without Basic Quotas) under the 1968 Agreement with their Previous Quotas. 8. Exports of Coffee from the Developing Countries, 1950-1967. 9. World Exports of Coffee by Major Countries, 1960-1966. 10. World Imports of Coffee by Major Countries, 196o-1966. 11. Soluble Coffee Exports from Selected Countries, 1963-1967. 12. Share of Coffee in Export Earnings of Selected Countries. 13. Per Capita Imports of Green Coffee into Selected Countries, 196o-1967. 14. List of ICO Members, International Coffee Agreement, 1962, (as of April 1968). Table 1: COFFEE PRICE MOVEMNTS (US centstb., Spot New York) Colombia Guatemala Brazil Angolan Mams Prime Washed_ Santos 4 Ambriz 2AA 1950 53.25 51.372/ 50.52 41.53 1951 58.74 58.58 54.20 47.56 1952 57.01 57.05 54.04 46.17 1953 59.82 56.852 57.93 49.22 1954 80.02 77.24-' 78.71 63.02 1955 64.57 60.28 57.09 45.23 1956 73.97 68.48 58.10 38.35 1957 63.94 62.94 56.92 40.22 1958 52.34 49.81 48.41 40.25 1959 45.22 12.62 36.97 30.60 1960 44.89 41.33 36.60 25.27 1961 43.62 37.55 36.01 19.93 1962 40.77 35.83 33.96 21.55 1963 39.55 35.40 34.11 28.73 1964 48.80 47.16 46.66 36.38 1965 48.49 45.51 14.71 31.59 1966 47.43 42.25 40.83 33.98 19673/ 41.94 39.23 37.82 33.83 19673' 42.36 39.69 37.43 34.70 1/ Good Washed. 2/ Mexican Prime Washed. 3/ January-June. Source: Pan American Coffee Bureau,, ew York. Table 2: ESTIMATED WORLD SUPPLY AND DISTRIBUTION OF GREEN COFFEE (thousand 60-kilo bags) Marketing Beginning Total Net Domestic 1 Ending Year Carry-over Production Supply ExPorts Distribution Carry-over 1947-48 13,050 34,618 47,668 30,848 8,292 8,528 1948-49 8,528 39,095 47,623 32,266 9,330 6,027 1949-50 6,027 37,615 43,642 31,205 8,304 4,133 1950-51 4,133 38,164 42,297 31,593 8,163 2,541 1951-52 2,541 38,530 41,071 32,152 7,646 1,273 1952-53 1,273 41,513 42,786 32,939 8,236 1,611 1953-54 1,611 43,996 45,607 33,458 9,656 2,493 1954-55 2,493 42,188 44,681 29,219 8,266 7,196 1955-56 7,196 50,348 57,544 38,296 6,731 12,517 1956-57 12,517 45,420 57,937 36,203 10,778 10,956 1957-58 10,956 55,009 65,965 37,340 8,779 19,846 1958-59 19,846 61,665 81,511 38,977 9,664 32,870 1959-60 32,870 78,919 111,789 42,351 12,498 56,940 1960-61 56,940 65,768 122,708 44,220 12,954 62,534 2/ 1961-62 62,534 72,043 134,577 45,361 13,768 68,448 3/ 1962-63 68,448 67,387 139,835 47,909 13,971 66,655 EV 1963-64 66,655 70,998 137,653 49,263 14,097 74,293 1964-65 74,293 50,613 124,906 42,797 14,735 67,374 1965-66 67,374 81,604 148,978 52,.794 15,265 80,919 1966-67 80,919 60,642 141,561 50,018 16,074 75,469 1967-68 75,469 67,777 143,246 53,000 16,865 73,381 Note: In recent years some of the carry-over stocks were not of exportable quality. 1/ Domestic distribution in producing countries. 2/ Stocks reduced by 3 million bags which were allocated for industrial use in Brazil. 3/ Stockcs reduced by 7 million bags which were destroyed in Brazil in mi.J-1961. 4/ Stocks reduced by 7.3 million bags due to revision in IBC stocks. Source: United States Department of Agriculture, Foreign Agricultural Service, "Coffee" (FCOF 2-68), April 1968, as revised. Table 3: WORLD EXPORTABLE PRODUCTION OF COFFEE BY MAJOR COUNTRIES (thousand 60-kilo bags) 1960 1 1961/62 1962 3 1963/64 196/65 1965/66 1966/67 1967/6- Latin America Brazil 22,000 28,000 20,000 21,200 3,000 30,200 12,000 14,745 Colombia 7,000 6,800 6,500 7,200 6,500 7,000 6,350 6,600 Costa Rica 1,050 1,025 930 980 700 895 1,080 1,140 Dominican Republic 375 450 420 540 520 455 340 465 Ecuador 500 650 630 525 470 845 780 975 El Salvador 1,350 1,800 1,540 1,885 1,935 1,690 1,825 2,160 Guatemala 1,300 1,500 1,700 1,580 1,420 1,835 1,450 1,575 Haiti 275 525 425 365 385 405 290 320 Honduras 225 290 335 320 370 375 250 390 Mexico 1,450 1,500 1,250 1,855 1,550 1,800 1,350 1,550 Nicaragua 443 395 460 405 525 410 420 490 Peru 415 570 605 630 640 690 700 650 Africa Angola 2,700 2,750 3,050 2,750 3,045 2,740 3,240 3,140 Burundi 390 1/ 390 )1/ 105 245 195 195 235 310 Cameroon 660 820 805 775 840 1,170 970 1,070. Congo (D.R.) 850 850 1,050 1,050 900 925 850 850 Ethiopia 960 1,100 1,150 1,250 1,300 1,170 1,385 1,380 Ivory Coast 3,150 1,600 3,300 4,300 3,325 4s500 2,145 4,245 Kenya 545 505 615 720 640 855 915 680 Malagasy Republic 840 700 900 735 950 725 795 815 Rwanda 1/ 1/ 80 140 170 170 150 180 Tanzania 485 3g0 455 530 585 645 975 725 Uganda 1,895 1,933 2,930 2,885 2,440 2,585 2,435 2,460 Asia and Oceania India 550 315 365 620 460 465 700 540 Indonesia 1,600 1,650 2,080 1,600 1,450 1,850 1,490 2,130 Others 1,800 1,770 1,740 1,820 1,560 1,649 1,388 1,714 World 52,810 58,280 53,420 56,900 35,880 66,244 44,508 51,299 te Exoanda-Burundi. Source: USDA, "tWorld agricultural Production and Trade", earch 1965-6d, June 1964. 1~ote: Exportable producti-on is def~ined as total harvested production minus estimated domestic consumption. Table 4: INITIAL AND FINAL QUOTAS INTERNATIONAL COFFEE AGREEMENT, 1962 (Thousand 60-kilo bags) 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1/ Exporting Country Initial Final Initial Final Initial Final Initial Final Initial Final Initial Final- Colombian Milds Colombia 5,951 5,951 5,951 6,243 6,172 5,620 5,669 5,669 5,782 5,421 5,902 6,344 Kenya 5122/* 51221* 5122/* 528* 530* 483* h87* 487* 744* 698 760 817 Tanzania 431 431 431 452 4447 407 411 436 469 401 441 508 Subtotal ,B94 6 94 9T 7,223 7,1)49 6,610 777 6,592 6,99 5 6,520 7,1 ? 7, 9 Other Milds Burundi 4113/ 4h11i/ 4113/ 4241/ 257 269 271 271 276 259 282 122 Costa Rica 941 941 941 971 975 888 896 896 914 855 923 932 Cuba 198 198 198 204 205 187 189 189 192 180 196 196 Dom. Rep. 505 505 505 530 436 525 298 419 449 393 458 458 Ecuador 546 546 546 573 567 516 521 546 589 577 554 554 El Salvador 1,415 1,415 1,415 1,685 1,h68 1,561 1,)48 1,461 1,600 1,318 1,633 1,613 Guatemala 1,331 1,331 1,331 1,511 1,380 1,257 1,268 1,336 1,428 1,23'4 1,395 1,455 Haiti 499* 499* h99* 515* 431* 393 396 411 434 386 443 443 Honduras 282* 282* 282* 334* 291* 266* 269* 269* 404* 179 412 413 India 356 356 356 374 '70 ? 114 339 264 196 296 263 373 Jamaica 25 12 12 me:xico 1,494 1,494 1,494 1,567 1,549 1,411 1,428 L,1423 1,)451 1,255 1,44h 1,44h Nicaragua 415 415 415 )435 430 455 231 429 473 39h6 471 471 Panama 26 26 26 27 27 25 25 25 26 25 24 24 Peru 574 574 574 642 595 496 5047 555 61l 536 617 617 Rwanda 4/ 4/ 4/ 4/ 257 199 200 200 204 192 209 209 Venezuela 070* 1E7Q* 7O* c 85 488 ?4)44 448 448 !h57 429 466 466 Subtotal 9,4T3 9,43 9,463 10,277 972 9 o,769 9,242 9,912 8,935 9,912 10,002 Unwashed Arabicas Bolivia 20* 20* 20* 20* 21* 2* 25*& 25' 26* 25* 49 49 Brazil 17,820 17,820 17,820 18,692 18,480 16,828 16,976 16,976 17,312 16,927 17,672 17,672 Ethiopia 1,010* 1,010* 1,010* 1,037* 1,206* 1,098 ,108 1,16)4 1,205 1,181 1,220 1,230 Paraguay _ _ 69 69 Subtotal 5]81,850 1850 19, 707 17 , 18,109 18,165 17 ? I54 ' 19,020 19,020 Robustas Congo (D.R.) 9)40 94) 940 087 975 1,066 1,075 1,075 1,096 1,152 1,129 1,242 Ghana 4L) )44 40 4l 46 47 )48 43 47 Guinea 1'4 209 Indonesia 1,164 1,164 1,164 1,221 1,207 1,100 1,109 1,109 1,121 1,155 1,024 1,248 Liberia 60 60 66 Nigeria 18 18 18 25 25 25 25 42 42 4' 78 42 OAMCAF 4,259 4,259 4,259 4,778 4,417 4,057 4,357 4,552 4,706 4,686 5,155 Portugal 2,167 2,167 2,167 2,393 2,247 2,o45 2,064 2,214 2,384 2,542 2,492 2,741 Sierra Leone 64*F 64* 64* 66* 68* 61 62 61 80 66 82 90 Trin. and Tob. 44 44 44 65 45 61 42 67 67 71 69 76 Uganda 1,869 1,869 1,869 2 260 1,938 1 765 1 780 1 915 2 012 2 112 2 072 2 279 Subtotal 10,525 10,525 10,525 I 0,966 10,883 1,42 55 ' TU T , 1319 Total 45,732 45,732 45,732 49,o89 47,550 )43,850 43,700 44,885 46,862 45,553 47,924 49,886 * Signatory non-member. 1/ As on July 15, 1968. 2/ Eccludes shipments to the U.K. 3/ Includes Rwanda. 4i Included in Burundi. Source: International Coffee Organization. Table 5: EXPORTS OF ICO M4EMBFRS TO QUOTA AND NON-QUOTA MARKETS (thousand 60-kilo bags) 1962/63 1963/65 1961l/65 1965/66 1966/6? Quota Annex B Quota Annex B Quota Annex B Quota Annex B Quota Annex B Exporting Country Markets Markets Total Markets Markets Total MArkets Markets Total Markets Markets Total Markets Markets Total Colormbian Milds Colombia 5,952 1014/ 6,0561/ 6,2291/ 82, / ,3111, '.612 131 5.753 5.669 195 5.85 5,421 213 5,634 Kenya 552 / 83- 535- 587- 72' 379-' 615 50 665 845 66 911 697 127 824 Tanzania 427 27 454 );158 34 482 407 98 505 652 188 850 432 273 704 Subtotal 6,631 215 7,05 l oT 72 77 T 7 279 91 3 7.1 61 Other Milds 2/ 2/22 Burundcli 183-= 0 183- 424- 0 52 233 0 233 257 Costa lica 901 * 901 920 1 921 702 * 702 895 9 904 859 142 1,001 Cuba 22 8 30 0 0 0 0 0 0 0 0 0 75 0 75 Dominican Republic 523 0 423 536 0 536 522 0 522 420 13 433 362 0 362 Ecuador 594 4 498 536 0 53t 708 2 710 660 86 756 576 315 891 El Salvador 1,515 116 1,531 1,685 35 1.719 1,561 51 1,602 1,573 23 1,596 2,097 21 2,118 Guatemala 1,750 12 1,762 1,505 9 1,515 1.25'7 5o 1,297 7,723 306 2,029 1,234 18 1,252 Haiti 527 0 427 363 * 363 381 2 383 5107 * 507 283 * 283 Honduras 334 0 334 318 0 318 506 0 506 383 0 383 351 * 351 India 358 60 418 397 135, 531 305 157 561 262 133 395 365 201 566 Jamaica 9 0 9 Mexico 1,225 7 1,232 1,567 15 1,531 1.510 18 1,528 1,523 168 1,591 1,339 35 1,373 Nicaragua 479 0 479 437 0 537 555 * 555 563 0 463 396 0 396 Panama 12 0 12 26 0 26 17 0 17 36 0 36 25 0 24 Peru 717 1 718 688 * 638 .55 * 555 556 12 568 536 49 585 ltwanda 3/ 3/ 3/ 3, 3 7 6 161 0 161 15 7 0 157 187 0 187 Venezuela 369 0 36 395 0 397 258 0 258 311 0 311 333 0 333 Subtotal 9,109 9,317 9,9 197 9 , 8 8 ' '0T 960 9 ,190 9,506 7 17,25 9,24 70 10,04 Unwashed Arabicas Bolivia 18 0 18 37 i 38 18 1 19 55 0 55 100 1 100 Brazil 17,795 694 18.89 16,283 7511 17.025 -2.503 512 23.m5 16.976 S37 17,613 16,670 570 17,240 Ethiopia 1 039 104 1,153 1.187 74 1 261 I 092 151 1.243 1 002 75 1.076 1,191 83 1,273 SubtotalI798 1 17, 507 8 . 3 6TTh1. 1,277 T.W 711 18,71ilF T9 -6T 18,6713 Robustas Congo (D.i.) 1,083 0 1,083 6335. r 33, 710 10 599 0 599 700 0 700 Ghana 81-' C 312 55 0 55 102 3 105 52 0 52 Indonesia 1,358 22 1,380 1,160 113 1,273 1.15)r 20' 1.3h8 1,362 255 1,617 Liberia 69 2 71 Nligeria 10 0 10 07 * .9 9 0 9 119 2 121 30 * 30 OAMCAF 5s,279 90 4,369 5,329 2'75 5, 0C , .217 358 1.573 5,351 1,000 5,351 4,696 473 5,169 Portugal 2,202 81 2,283 2,395 8 2,502 2,053 58 2,101 2 215t 97 2,311 2,500 616 3,117 Sierra Leone 65 1 66 67 19 .6 '2 7 69 175 1 176 49 * 49 Trinidad & Tobago 59 * 59 62 62 59 o 59 38 0 38 55 0 45 Uganda 2,166 268 2 535 2,195 352 2 536 1,771 33) 2.1 r 1 911 936 2.850 2 315 518 2 632 Subtctal 11,222 46 i2 1 1 , 684 12,00 T7T 10 009 11 rt ,2,29 13,138 1,610 ____ o6 TOTAL 46,014 1,682 47,696 46,576 1,955 58,530 39,237 ?,212 h1,55 55,579 5i,205 19,783 44,o49 3,656 47,705 * Less than 500 bags. 1/ Excludes shipment to U.7. up to December 31, 1963. 2/ Includes iwanda. 3/ Included in Burundi estimated exports were 75,000 bags in 1962-63 and 12c.00G ;gD in 1?3-614. / Partial figures. Total exports in 1963-15 were 93,000 Dags; breakdown of exc-orta to qucus ard Annex B markets is not -ovailable. Note: Totals may not always add up due to rounding. Source: International Coffee Organization Table 6 COMPAS1UON OF BASIC; COFFEE QUOTAS UNDER THE-i968 AGREEMTI AND: I. BASIC QIXOTAS UTNDER TUE 1962 AOREE2!RIT II. 1967/68 INITIAL EFFECTIVE QUOTAS 1968 Agreement Basic Quotas __ l62_Agreement Basic Quotas . _ 1967/68 Initial. Effective_Quotas_____ - % Change COnder. the 1.968 Agxnernetkf!r938Ž Achasted to ~~~~~~~~~Ad4usted to 1962 Basic Quotas 1967/68 Effective Q.etaa I.) Bags Pe.rcent 1,730 Rags Percent 55,491,300 Bags 1,100 Nags Peroent 55,093,003. Bags -~8 (1) (2) (3) (9) (5) (6) (7) (6)() 1) Brazil 20,926 36.0)19 i8,ooo 39.088 21,5T-h 17,672 33.603 20,697 -2.73 1.11 Baraundi 233 0.423 288 0.625 399 282 o).6WC 330 -32,27 -29.-39 Catosbia 7,0113 12.718 6,oii 13.053 7,185 5,902 12.559 6,912 -2.57 1.27 langa (Dee. Rep. of) 1,930 ~~~1.817 1,140 2.476 1,363 129 .021,322 -26.63 -2.36 Canto Rica 1,170 1.399 950 2.63 1,135 733 1.985 1,093 -3.03 3.64 D-anisan Rep. 520 L.995 925 0.923 538 958 0.975 537 2.36 -3.17 Feasdor 750 1.363 552 D-199 663 559 1.179 699 13.64 15.56 El BaIvadar 1,900 3.952 1,930 3,105 1,709 1,613 3.432 1,889 11.18 0.58 EtAs-pla 1,4994 2.714 1,175 2.551 1,909 1,230 2.617 1,44a0 6.41 3.75 Guatemala 1,890 3.270 1,399 2.919 1,607 1,395 2.968 1,634 12.01 10.16 Haiti 990 0.890 920 0.912 502 993 0.993 519 -2.39 -5.59 Hondaras 925 0.772 285 0.619 391 912 0.877 983 29.63 -12.01 India 923 0.769 360 0.-782 930 363 3.772 925 -1.63 -0.97 Indonesia 1,357 2.965 1,174 2.599 1,903 1,029 2.179 1,199 -3.28 13.18 Konya 860 1.562 517 1.123 618 760 1.617 890 39.16 -3.37 E¶exlau 1,760 3.198 1,509 3.277 1,809 1,449 3.073 5,691 -2.44 4.08 Nicaragua 553 0.999 919 9.910 501 971 1.002 552 9.78 -0.36 OAMCRF (5,383) (9.779) (9,236) (9,'19 (5,063) 4,614 9.818 5,909 (6.32) -0.39 C-seroon 1,030 1.817 763 1.657 912 I/! I/ 1/ 9.65 1 Central AfeA. Rep. 200 0.363 150 0.326 179 I/ 1/ I/ 11.73 Ivury Coast 3,073 5.583 2,329 5.097 2,778 1/ 1/ 1/ 10.62 l/ Malagasy Republic 910 1.653 829 1.800) 991 I/ 1/ I/ -8.17 1/ Toga 200 0.363 170 3.369 233 1/ l/ 1/ -1.98 I/ Perua 740 1. 344 580 1.259 693 617 1.313 723 6.78 2.35 Portagal 2,776 5.049 2,229 9.830 2,658 2,992 5.303 2,919 9.44 -9.90 Ruanaa 150 0.273 212 0.460 253 209 0.995 295 -90.71 -38.78 Tans-ia 700 1. 272 936 3.947 521 991 3.938 51C6 39.36 35.66 Uganaoa 2,379 9. 322 1,888 4.100 2,257 2,072 4.409 2,927 5.41 -1.98 Venezuela 325 0.591 975 1.031 5r68 966 0. o31 545 -42.78 -40.37 Total 55,7a1 100.003u 96,o50) 100.00 55,091 96,39)~6 1010.300 55,09h2 - 1/ Included is OAMICAF total. 2/ Imxaludes ealet --sols far -gong (Sraznoillc) . Dahace,y act Gab-s. Jearcer Basin data from EgO, Table 7: COMPARISON OF EXPORT ENTITLI04ENTS (GF COUNTRIES W4ITHOUT BASIC QUOTAS) UNDER THE 1568 AGRiENT WITH THEIR PREVIOUS QUOTAS (thousand 60-kilo bags) 1968 Agreement Export Entitle- 1962 Agreement 1967/68 Initial ments for Basic Quotas Effective Quotas 1968/69 (1) (2) (3) Countries without basic export quotas under the 1968 Agreement Bolivia 50 49 50 Congo (Brazzaville) UHY 3/ 25 Cuba 200 196 50 Dahomey 37T/ 3/ 33 Gabon 18_/ 3/ 25 Ghana 43 43- 51 Jamaica (25)2/ 12 25 Liberia 54 60 60 Nigeria 44 38 52 Panama 26 24 25 Paraguay 70 4/ 70 Sierra Leone 65 82 82 Trinidad & Tobago _44 69 69 Total 687 617 1/ Tentative allocation under the overall OANCAF quota. 2/ Exports up to 25,000 bags were not subject to quota in the 1962 Agreement. 3/ Part of overall OAMCAF quota; separate figures not available. 1/ Accession approved in 1967/68 but Paraguay has not yet ratified the Agreement. Source: Basic data from ICO. Table 8: EXPORTS OF COFFEE FRCM THE DEVELOPING COUNTRIESY Three-Year Quantity Value Moving Average (to00 metric tons) (miliHonUS $) (mlion USI7 1950 1,760 1s690 1951 1,916 2,060 1,967 1952 1,945 2,150 2,197 1953 2,082 2,380 2,337 1954 1,773 2,480 2,360 1955 2,061 2,220 2,377 1956 2,319 2,430 2,303 1957 2,210 2,260 2,233 1958 2,188 2,010 2,O54 1959 2,634 1,893 1,919 1960 2,589 1,853 1,846 1961 2,675 1,793 1,823 1962 2,812 1,822 1,855 1963 3,050 1,951 2,029 1964 2,796 2,315 2,141 1965 2,705 2,157 2,268 1966* 3,023 2,331 2,235 1967* (3,057) (2,217) 1/ Data exclude re-exports; include green equivalent of processed coffee. * Provisional; three-year moving average includes estimate for 1967. Sources: Working Paper No. 3 on Commodity Stabilizaticn, "Exports of Major Commodities from the Developing Countries, 1953-65." Pan American Coffee Bureaus Annual Coffee Statistics, 1967. 1/ Table 9: WORLD EXPORTS CF COFFEE BY MAJOR EXPORTING COUNTRIES- 1960 1961 1962 '963 1964 1965 196q2/ Thousand Million Thousand Milli-on Thousand Million Thousand Mfillion _Tho_us-and__ Million Thousand Million -Thousand Million Metric Tons US $ Metric Tons US $ Metric Tons US $ Metric Tons US $ Metric Tons US $ Metric Tons US $ Metric Tons US $ latin America Brazil 1,009.1 712.7 1,018.2 710.4 982.6 642.7 1,170.8 748.3 896.8 759.7 808.9 706.6 1,009.9 76h.0 Colombia 356.3 332.3 339.1 307.8 393.7 332.0 367.9 303.0 384.7 394.2 338.1 343.9 333.9 328.3 Costa Rica 46.7 43.9 52.0 43.3 57.4 48.4 54.6 46.0 51.1 48.o 48.3 46.6 54.9 52.6 Dominican Republic 29.2 22.6 20.1 14.4 29.3 19.9 27.5 18.5 34.4 30.5 24.6 21.1 25.3 21.0 Ecuador 31.3 22.0 22.9 14.3 32.9 21.0 29.5 18.3 24.7 21.2 47.6 38.2 43.2 32.2 El Salvador 89.5 76.7 86.6 70.2 104.6 75.7 101.1 75.6 109.3 92.9 99.9 95.6 95.8 91.0 Guatemala 79.9 74.6 79.0 67.1 82.4 67.1 98.2 77.1 76.6 72.3 95.5 92.2 109.2 100.1 Haiti 23.7 17.3 20.1 13.5 30.8 20.7 23.4 16.0 22.8 19.4 22.7 19.3 21.0 17.3 Honduras 15.5 11.8 12.6 9.0 15.9 11.4 20.5 14.2 19.0 16.9 24.9 22.2 23.0 19.9 Mexico 83.6 62.1 92.8 63.1 94.6 64.1 67.9 55.0 103.6 86.7 80.5 65.6 95.2 73.6 Nicaragua 21.8 19.2 21.0 17.4 20.6 15.4 24.1 17.5 23.3 21.1 28.2 26.4 23.2 21.8 Peru 26.4 18.5 34.o 22.8 37.4 24.2 40.1 25.6 42.3 37.0 34.6 29.0 35.4 28.5 Venezuela 24.7 22.0 25.6 22.7 19.5 18.8 23.7 23.5 20.0 15.0 18.2 13.7 18.4 13.8 Africa Angola 87.2 44.0 118.2 48.7 156.9 64.2 137.9 66.2 138.8 99.5 159.2 93.5 156.4 106.4 Cameroon 30.5 18.7 35.5 20.8 38.1 21.1 45.0 26.1 50.1 37.7 48.3 31.8 72.7 Congo (Democratic Rep.) 58.4 30.0 33.9 14.0 33.1 13.9 !,9.5 17.3 37.5 23.6 25.8 14.9 35.1 22.1 Ethiopia 51.3 38.0 56.0 37.8 62.6 43.4 66.4 54.6 70.3 63.6 82.0 75.2 73.6 62.3 Ivory Coast 147.6 75.7 154.7 82.3 144.8 78.4 182.1 99.1 204.3 128.5 185.7 104.9 181.5 122.5 Kenya 28.3 28.8 32.7 29.8 31.0 29.7 37.4 30.9 42.4 43.2 38.5 39.5 54.5 51.6 Malagasy Republic 40.2 23.6 39.8 22.5 56.0 30.1 44.4 23.8 38.0 24.6 50.1 28.9 45.7 30.8 Tanzania 25.6 20.5 25.0 19.0 26.1 18.5 26.5 19.2 33.5 30.9 28.4 24.1 51.2 42.4 Togo 4.4 2.6 10.2 5.0 11.5 5.8 6.2 3.2 16.1 10.2 10.7 5.5 13.2 709 Uganda 118.7 47.6 104.8 39.1 133.0 56.5 147.6 76.1 139.7 99.1 157.8 85.2 167.3 97.4 Asia =dia 16.5 14.0 32.0 20.0 21.2 16.6 23.6 17.0 31.6 29.0 24.7 23.5 24.1 22.4 Indonesia 41.2 13.7 67.0 13.8 58.6 12.5 80.9 19.8 62.4 27.0 108.2 31.5 100.3 49.8 Singapore2/ 27.5 12.9 57.8 18.1 53.6 20.1 71.2 31.5 13.0 9.5 14.6 9.3 32.7 19.9 Others 130.0 96.3 134.5 92.6 137.2 96.7 130.8 90.3 169._ 132.7 157.8 129.6 WORLD 2,645.1 1,902.1 2,725.1 1,839.5 2,865.3 1,868.8 3,097.8 1,991.5 2,855.4 2,374.0 2,763.8 2,217.8 3,086.0 2,395.6 1/ Includes re-exports. 2/ Preliminary. 3/ 1960 includes Malaysia. Sources: FAO, "Trade Yearbook," 1966 and 1967; FAO, -Monthly Bulletin of Agricultural Fcoromics 6 Statistics," Decemher 1967; UjSDA, "Co9ffe," FCOF 2-68, April 1968. Tabl e 10: .iCLOD I.IPORTS OF 3OFFE F3Y MAJOR COUNTHIMS 1960 19(1 i952 19c(3 1964 1965 1966 Thousand Million Thousand Million Thc(usand illion Thousand MKillion Thousand Million Thousand Tllion Thousand Million Metric Tons U3 $ Metric Tons US , :ietric Toris US $ _ Metric Tons U; 3 Ketric Tons .5 8 Metric Tons US I Metric Tons US $ Aultria 12.2 10.9 13.1 11.2 iS.5 11.3 15.1 12.7 17.1 16.2 16.9 17.6 17.5 18.1 Belgium-Luxembourg 66.5 48.4 61.9 42.8 57.3 40.6 57.5 (21.3 66.3 59.1 67.6 62.8 57.0 53.3 Denmark 41.9 32.0 63.7 32.2 L25.7 32.1 53.0 36.7 48.L 43.1 49.5 45.5 53.2 46.5 Finland 34.1 25.2 38.5 28.1 39 - 30.2 (2.0 32.C (7.5 46.1 40.2 42.3 45.9 46.9 France 198.0 141.5 19(2.6 i36.; 26t,.3 3.9 219.2 144.6 231.0 191.7 217.1 161.7 228.2 181.5 Germany(Federal .tepublicj 199-. 200.b 212.0 209. 234.> 3.1 23 7. 206.0 256.s 246.6 275.9 285.4 279.9 282.5 Greece 7.7 5-5 7.S . 4. 6.o o.8 8.1 10.0 9.0 10.4 8.8 Italy 99.3 70.8 105.3 b 12.' 7.5 116.Q '2.9 119.6 86.6 120.5 96.o 123.9 96.7 Netherlands 55.4 42.2 69.4 6.7 6L, .7 76.C 52.5 83.4 74(.0 33.3 75.1 85.8 79.1 Norway 29.2 2(4.6 27.2 22.1 31.2 73.8 33.8 26. 33.3 31.4 28.9 29.4 34.8 33.8 Portugal 11.2 .5- 12.6; 5. '2.2 .C 13.3 6.L 10.9 7.1 13.2 7.4 13.2 8.2 Spain 15.8 13.3 16.4 13.3 22. 3 16.2 31 8 23.1 39.3 36.3 43.1 42.2 49.2 46.5 Sweden 73.5 62.6 77.9 65.2 3 .2 86. t 6: . 91.5 87.6 91.9 93.7 96.7 95.o Switzerland 29.9 2-,.4 32.4 25.7 30.- 23.4 34., 2-. 36.1 32.3 44.3 39.5 60.7 37.8 United Kingdomn 54.9 3.1 58.7 35.6 . 3 40.3 76 1 78.2 65.9 58.3 41.4 8i6 62.9 Yugoslavia 9.2 7.5 9.6 7.3 ic.7 '2 ( 12 3.7 '2.1 17.6 16.7 2L.7 21.1 Sino-Soviet Bloc Czechoslovakia 8.0 6.0 13. . 1. 8 11.0 9.7 10.3 8.5 10.7 9.5 Germany (Democratic Republic) 23.2 18.5 27.1 1.* .3 34. ` 2. 7 3c6 1 32.2 35.8 29.6 37.4 29.2 Hungary 3.3 2.9 3.3 2 b.c 6 .3 11.0 9.9 12.6 9.7 13.5 9.6 Poland 3.9 3.2 4.2 3.3 . 5.6 11.0 9.5 15.4 11.8 19.5 14.4 U.S.S.R. 19.1 14.2 29.7 20.51 .7 .. 1 30.3 27.5 30.9 29.0 28.3 25.5 North and South America Canada 60.5 49.9 68.o 52. 7L.7 53.6 78.3 75.3 71.2 76.7 69.1 71.4 62.9 United States 1,324.7 1,004.0 1,34(7.2 )6L.0 1,1 6 Ž69. 1,433.0 9.9 1,372.9 1,200.3 1,280.3 1,o60.6 1,325.6 1,068.9 Argentina 27.6 16.7 35.0 20.0 23.2 17.3 29.1 17.5 31.5 26.6 30.0 25.7 37.4 30.1 Asia Hong Kong 3.4 2.0 6.o 3.0 4.9 2.2 7.3 3.'9 17.2 7.8 14.5 6.2 29.3 10.7 Japar, 10.8 8.9 15.2 10.7 15.4 30.1 17.6, 1l. 21.9 15.3 18.7 14.0 46.2 29.2 Africa Aigeria 30.5 19.6 27.2 16.S 27.? 18.9 22.6 12.9 33.9 25.6, 34.7 25.0 32.5 17.0 S. Africa 11.6 6.3 11.1 5.5 12.6 5.7 18.8 .1 10.1 6.6 10.1 6.9 12.8 7.8 Sudan 6.5 2.8 9.L 3.4 . 3.1 12.0 5 11.2 5.3 9.5 3.8 14.o 5.5 Oceania Australia 10.2 7.3 11.7 7.- . .9 10.9 7 13.9 9.19 14.6 11.2 14.0 10.9 Others 108.7 58.0 137.7 96.c 135.8 1.1 151.6 72.3 85.2 61.2 93.2 60.2 14C.6 96.1 4OIRLD TOTAL 2,590.2 1,971.0 2,732.3 i, 7(. 9 ,, 8.3 3,732.9 2,B93.3 2,033.3 2,958.1 2, 3.2 2,865.6 2,637.0 3,075.9 2,546.0 Sources: FAO, "Trade Yearhook," 1565 and 1967. FAC, 'Mornth7y Bulletin of Agricultural _c-nsomics ard -tatO- Icr," Thcarndr 1967. Table 11: SOLUBLE COFFEE EXPORTS FROM SELECTED COUNTRIES (60 kg. bags, green equivalent) 1963 1964 1965 1966 1967 Brazil 1,368 2,051 14,901 198,649 591,566 Colombia 5,915 5,250 n.a. n.a. Costa Rica 1,540 350 110 10 Ecuador 190 65 n.a. n.a. El Salvador 14,865 16,835 16,175 26,265 Guatemala 23,805 25,450 595 26,070 Mexico 49,465 50,420 1,620 25,575 Nicaragua 15,577 65,265 46,790 26,540 Ivory Coast 1 n.a. 23,185 n.a. n.a. Canada 88,150 45,600 36,250 25,750 U.S.A. 328,681 337,576 274,709 172,302 147,060 Austria 2,900 2,850 4,900 2,500 Belgium & Luxembourg 6,300 6,750 7,600 22,300 Denmark 16,300 17,300 21,050 22,100 France 21,400 12,850 13,500 20,200 Germany, F.R. 31,450 54,250 30,850 63,850 Italy - - - 750 Netherlands 58,600 74,65o 77,800 85,600 Portugal - 5,050 3,750 11,200 Spain 6,500 8,650 5,950 4,650 Switzerland 4,900 2,950 3,400 2,850 U.K. 76,700 71,800 83,300 75,450 Australia n.a. n.a. n.a. 16,800 1/ Includes small amounts of instant tea. Note: Converted to green equivalent (1 bag soluble = 3 bags green coffee). n.a. = not available. Source: UN World Trade Annual (various issues; SITC 071.3) and National Trade Statistics. Table 12: SHARE OF COFFEE IN EXPORT EARIaNGS OF SELECTED COUNTRIES 1960/62 Average 1965 Brazil 53 4 Colombia 68 5 Costa Rica 53 42 Dominican Republic 12 16 Ecuador 14 20 El Salvador 60 51 Guatemala 60 h9 Haiti 48 55 Honduras 15 17 Xexico 9 7 Nicaragua 29 18 Angola 38 47 Cameroon 20 22 Central African Republic 27 15 Congo (D.R.) 9 Y 5 Dahomey 6 3 Ethiopia 5 66 Guinea 11 10 2/ Ivory Coast 46 38 Kenya 29 30 Hadagascar 31 32 Rwanda ( 52 Burundi (58 71 Tanzania 14 1 Togo 27 20 Uganda 43 h8 1/ 1963-64 average. 2/ Fiscal year Oct. 1965-Sept. 1966. Source: Computed from U.N. "Yearbook of International Trade Statistics" (various issues); IlT Inter- national Financial Statistics, National sources and IBRD Reports. Table 13: PER CAPITA IMPORTS OF GREEN COFFEE INTO SELECTED CCUNTRIES (in pounds) 1960 1961 1962 1963 19b4 1965 1966 1967 Traditional Markets* United States 15.7 15.9 15.9 15.5 15.2 14.5 14.8 14.2 Canada 7.3 8.1 8*7 9.0 8.5 8.5 7.7 8.7 Netherlands 10.6 13.2 11.9 13.9 15.1 14.8 15.1 16.5 Belgium-Luxembourg 15.6 14.4 12.8 12.8 14.7 15.2 12.1 13.8 Germany (F.R.) 8.2 8.3 9.1 9*4 9.8 10.7 10.7 10.5 France 10.1 9.7 9.8 10.1 10.5 9.8 10.1 9.7 Italy 4.4 4.6 5.0 5.1 5.2 5.1 5.2 6.1 Sweden 21.6 22.9 24.4 25.1 26.3 26.2 27.4 28.4 Denmark 20.3 20.8 21.7 24.9 22.6 22.9 24.5 24.4 inland 16.9 17.4 19.0 20.2 22.9 19.3 21.9 23.6 Norway 17.8 16.5 18.6 20.2 19.8 17.1 20.3 20.6 Switzerland 12.4 13.2 12.6 13.1 13.9 16.3 14.8 13.2 Austria 3.8 3.8 4.2 4.6 5.3 5.1 5.3 5.7 Spain 1.2 1.9 1.7 2.7 2.9 3.4 3.8 3.5 United Kingdom 2.3 2.3 2.7 3.1 3.2 2.4 3.3 3.2 Portugal 0.8 3.0 3.0 3.2 2.6 3.1 3.2 3.0 Greece 2.0 2.0 2.3 2.4 2.5 2.1 2.6 2.7 Germany (D.R.) 2.4 2.4 3.5 3.5 3.9 5.0 5.2 4.9 Yugoslavia 1.1 1.0 1.2 1.6 1.8 2.0 3.1 3.6 Czechoslovakia 0.8 1.7 1.4 1.7 1.9 1.6 1.6 1.9 Israel 3.9 3.4 4.7 5.1 6.3 4.3 5.0 5.7 Hong Kong 2.4 4.1 3.2 4.6 10.3 8.6 17.3 4.5 Argentina 2.9 3.7 3.0 3.0 3.1 3.0 3.9 3.3 Australia 2.4 2.4 2.5 2.4 2.4 2.8 3.1 3.4 New Zealand 1.8 1.9 2.4 2.4 3.2 2.6 3.3 2.7 Algeria 6.0 5.1 5.5 4.8 7.0 3.0 2.8 3.0 Chile 2.7 1.8 1.1 3.0 1.9 2.3 2.3 2.5 Jordan 1.8 1.8 1.8 2.1 2.1 2.0 2.0 2.0 Morocco 1.6 1*4 1.5 1.9 2.4 1.5 1.4 1.8 Tunisia 1.4 1.3 1.2 1.2 1.0 1.0 .7 1.4 New Markets* Hungary 0.7 0.5 0.8 1.2 1.9 2.8 2.9 3.0 South Africa 1.7 1.5 1.6 1.7 1.3 1.3 1.5 1.5 Poland 0.3 0.4 0.5 0.7 0.8 1.1 1.4 1.9 Sudan 1.2 1.7 1.4 2.1 1.9 1.6 2.2 1.1 Japan 0.2 0.4 0.4 0.5 0.5 0.5 1.0 0.9 Thailand 0.5 0.4 0.4 0.1 0.4 0.3 0.4 0.5 U.S.S.R. 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 * Traditional and New Markets as defined under the International Coffee Agreement, 1968. Source: Pan American Coffee Bureau: Annual Coffee Statistics 1966 and FAO Trade Yearbook 1966 (Population data from the United Nations). Table 14: Ilti2ERXATIONAL COFFEE AGREE11ENT, 1962 LIST OF 13EMRS, AS OF JUNE 1968 Exporting Members Importing Members Bolivia Argentina Brazil Australia Burundi including: Papua, New Guinea Cameroon Austria Central African Republic Belgium Colombia including: Luxembourg Congo (B) Canada Congo (D.R.) Cyprus Costa Rica Czechozolovakia Cuba Demniark Dahomey Federal Republic of Germany Dominican Republic Finland Ecuador France El Salvador including: French Guiana, Ethiopia Guadeloupe, Gabon Martinique, Reunion, Ghana Comores, New Caledonia, Guatemala Polynesia, French Guinea Coast of Somalia Haiti Israel Honduras Italy India Japan Indonesia Netherlands Ivory Coast New Zealand Jamaica including: Cook Islands, Niue Kenya Island, Tekelau Liberia Islands Malagasy Republic Norway Mexico Spain Nicaragua Sweden Nigeria Switzerland Panama Tunisia Paraguay U.S.S.R. Peru United Kingdom Portugal including: Hong Kong including: Metropolitan Portugal, United States of America the Azores ald Nadeirap Care Vei-de Archipelago, Portuguese C-uinea, Archipelago of S6o Tare and Principe, Angola, Mdozambique, Macao, Timor Rwanda Sierra Leone Tenzania Togo Trin'-dad and Tobago Uganda Venezuela Source: International Coffee Organization.