The talks with the London International Financial Futures Exchange (Liffe) are part of an increasingly serious search by top arabica producers for alternative markets for electronically traded coffee futures, following a growing dispute between the Central Americans and the New York Coffee, Sugar and Cocoa Exchange (CSCE).

The presentation by Liffe, which said last week it is looking into launching an arabica coffee contract in addition to the robusta futures already traded, would take place during the September 21-23 meeting of the International Coffee Organisation (ICO) in London, officials said.

"We, the Central Americans, Colombia and Mexico, have been invited to a presentation in September by Liffe during the ICO meeting," Ruben Pineda, executive director of El Salvador's Coffee Institute, told Reuters.

In March, Central American producers protested to the CSCE over a proposal by Brazil's coffee exporters association Abecafe for its washed coffee to be traded against the "C" futures contract.

Mexico and Colombia formally joined the Costa Rican-led protest against the Abecafe proposal last May.

The Central Americans say Brazil's washed arabica coffee is of lower quality than their milds and fear it would negatively affect the premium "C" contracts, possible pushing prices lower.

The Liffe initiative, which came a week after the Chicago Board of Trade announced it would apply to launch its own electronically traded coffee futures, was greeted with excitement across Central America and Mexico.

"That (Liffe initiative) and Chicago is really great news," said Roberto Bendana, executive secretary of the Nicaraguan Coffee Commission (Conicafe).

A senior official close to the Mexican Coffee Council said the Mexicans, while to some extent keeping to the sidelines, were closely following the latest developments in what has become a controversial debate in the region.

"We all support this, the Central Americans, Mexico and Colombia need a contract in which we can protect the prices for our high-quality coffees," said the official.

"At the moment the CSCE is acting as the `Gringo (American) Association' and is exclusively favouring the traders. We need more negotiations for producers and more competition in the market for mild washed arabicas," he told Reuters.

Juan Carlos Villareal, of the Mexican Confederation of Coffee Producers, agreed, saying an alternative coffee futures exchange was "not a bad idea".

"It's a very interesting subject and we give it a lot of attention," Villareal said.

In Guatemala, the head of the country's National Coffee Association (Anacafe) said producers were not in the mood to sit around waiting for the CSCE to make up its mind definitively about the Brazilian proposal.

The CSCE's coffee committee has already approved Abecafe's proposal and made a recommendation to the exchange board, which says no timeframe has been set for a final decision.

Central American producers threatened to leave the CSCE after the initial coffee committee approval, and repeated that threat earlier this month.

"In New York they are analysing the case, but while they are deciding what they are going to do, the rest of us are looking for other markets to invest in our product," Anacafe president William Stixrud told Reuters in Guatemala City.