Néstor Osorio, executive director of the International Coffee Organisation (ICO), said "significant progress" was made in January towards a new International Coffee Agreement. His comments, made in the ICO's monthly review, contradicted creeping scepticism in the EU over the renewal of the agreement, which provides a useful forum for the coffee industry to discuss sector-wide issues. Several disagreements between ICO members during the January talks put the deadline for a deal "in doubt", one EU official told BeverageDaily.com. The current agreement is set to expire in September this year and the ICO wants a new deal drafted out by May. But some believe a last minute deal in September or perhaps a postponement until January 2008 is now more realistic, which would drag the current agreement out for an extra year and put off potentially important reforms. US proposals to "change a lot in the agreement in terms of structure and purpose", have prolonged debate, the EU source said. The US, the world's largest coffee consumer, rejoined the ICO in early 2005. Wrangling over the number of votes handed to the EU and difficulty among producer nations in co-ordinating their positions has also slowed progress. ICO director Osorio said January's talks had taken place "in an atmosphere of constructive co-operation". Everyone had agreed that sustainability, in terms of the environment, social and economic, would remain a central part of a deal, he said at a press conference following the talks. He denied rumours of a rift between the US and EU, mirroring wider trade discussions at the WTO. Coffee prices dipped slightly in January, but remained 10 per cent ahead of the average for 2006, the ICO said in its monthly update last week.
Consumption is expected to continue rising over the next year, from around 116m bags to 118m, although many in the industry are watching closely to see what the El Niño weather event will do to stocks and harvests in producer countries.