Bangalore, Oct 8 : The International Coffee Organisation (ICO) is planning a forum to arrange institutional finance to producers facing credit crunch, a top official said here Thursday.

"We plan to set up a forum next year to facilitate institutional credit to producing countries for retaining stocks and meet their capital requirements due to fund crunch," ICO executive director Nestor Osorio said at an international coffee conference here.

In the post-quota system, coffee producers have been facing resource crunch to retain surplus stocks unlike in the past when the price support system allowed them to build inventory for regulating demand and supply in international auctions.

"The forum will bring banks, financial institutions and producer associations together to work out modalities of funding at affordable interest rates," Osorio told about 500 delegates participating in the third edition of the three-day India International Coffee Festival (IICF-2009).

In this context, Osorio hoped the state-run Coffee Board of India would play an important role in forming the guidelines on the basis of financial packages offered by the government to growers affected by various factors such as drought and damage to crops by stem-borer disease.

"During the quota system, producing countries were protected by a price support system allowing them to retain quantities. Once the quota system was lifted in the mid-nineties, they lost the support, resulting in price fluctuation in international auctions for exports," Osorio recalled. (IANS)