RPT - EUROPEAN TRADE MAY PROPOSE NEW ICO FORMULA European coffee traders and roasters may propose a new formula for calculating International Coffee Organization (ICO) coffee quotas at the end of their meeting here this week, traders and officials told Reuters. Although traders were unwilling to reveal details of the possible new formula, they said it would give Brazil, the world's biggest coffee producer, unchanged ICO quotas for the next two years and could be a basis for renegotiation. "The main sticking point on quotas has been Brazil's attitude, and this compromise could be a solution, " one said. However, the European coffee trade federation meeting, which began here today and is to continue to the end of the week, has revealed gaps in the European position on re-introducing quotas. Traders said that, as a whole, the trade side was against re-introduction of ICO quotas, while roasters were generally in favour with the single proviso that there had to be some formula basis for re-allocating quota shares among producing countries. The roasters said the positions were generally fairly close, and problems with some Government officials. Germany and Italy were cited as the extremes of polarized Government attitudes, with most other countries on the fence. Sources said Germany was the most extreme against quota re-introduction, while the Italians were most in favour. "Nevertheless, we expect to find enough common ground by the end of the week to at least present a common European Community (EC) view at the next meeting of consumer members of the International Coffee Agreement (ICA) in July," one trader said. "We hope we can present the compromise proposal and that not only the consumer side, but the producer side will accept it," one official said. "We have learned that we can live without the quotas that were suspended in February last year, but would prefer the stability they can bring to the market as long as we do not simply return to the old and outdated status quo as far as quota allocation is concerned," he added. Overall, however, trader and roaster opinion on the likelihood of a successful re-negotiation was mildly pessimistic, varying between a 50-50 chance and 60-40 against. "Our main difficulty will be to persuade the U.S. On the consumer side and Brazil on the producer side to agree to quota re-introduction, " he said. "The U.S. Position has, if anything, hardened, while the new Brazilian Coffee Institute president has adopted the least negotiable position of any of his predecessors," one trader said. "However, with many producers starting to swing in favour of the consumer position that quotas have to be re-allocated under a new formula, Brazil is becoming increasingly isolated, which gives at least some hope of a compromise at the ICO quota meeting in September," the official said.