Ivorian Prime Minister Daniel Kablan Duncan told Reuters in a recent interview his country would achieve this target, whatever problems arise in its recently privatised coffee sector.

"We have made a decision. It's (coffee trade privatisation) a beginning so we can see what is working and what the problems are, and to take this into account when next year we have to privatise cocoa," he said.

Duncan said his country would study and learn from the difficulties suffered by countries such as Cameroon which saw cocoa bean quality deteriorate after easing state controls.

Ivory Coast, the world's largest cocoa producer with yearly harvests of more than one million tonnes, announced earlier this month its cocoa and coffee marketing board Caisse de Stabilisation would become a mostly privately owned entity, with the state keeping a 20 per centstake.

The country's smaller coffee sector will be fully privatised this month as a stepping stone for the liberalisation next October of the far bigger cocoa sector, its major export earner.

Duncan said the government was currently in discussion with possible partners in this "joint-venture" to open the cocoa market, including bankers, exporters and producers. A decision on partners would be made by the end of this year, he said.

On the nation's economy, Duncan said a 26 per cent hike in the farm gate price for cocoa in the 1998/99 season which started earlier this month, should have a positive effect.

"It will improve the revenue of the producer and that will boost consumption of the farmers,"he said. " It will have an effect afterwards on industrial production, for instance textile, and...then on (cocoa) production," he said. Ivory Coast last week opened the 1998-99 cocoa season with a reference minimum farm gate price set at 575 CFA francs per kg against 455 CFA francs in 1997-98.

Duncan said heexpected an increase of five to 10 per cent in cocoa bean export income this year from 862.2 billion CFA francs in 1997 as market prices were higher this year.

However, Ivory Coast, which produces over 40 percent of the world's cocoa, was vulnerable to oversupply and needed to take into account the global supply and demand balance, he said. "We try to adjust the level of production to the needs of developed countries so we can maintain the price," he said.

" We have raised the level of producer prices by 26 percent, but if you produce too much there will be a collapse in the price of cocoa."

In a bid to counter this problem, Duncan said his country aimed to boost processing of its cocoa output to 50 per cent by 2000 from the current 20 per cent.

"We are in discussion with several international companies from Europe and the United States, and we've had some success in the discussions," he said.

The government said last week US-based commodities trader Cargill planned to build a processing factory inIvory Coast with an annual capacity of 100,000 tonnes.

Duncan said he expected Ivory Coast's gross domestic product to grow by 6.5 to 7.0 per cent in 1998. This is against an average of seven percent in the 1995-1997 period.

The inflation rate was seen falling slightly to between three and five per cent, against 5.7 per cent in 1997, he said.