Many poor countries rely heavily on one or two commodities for most of their export earnings. In some cases the cash pays for imported food. So commodity prices can be a matter of life or death. Here we continue last month’s update of our earlier commodity reports. The figures in brackets indicate the latest percentage of the world market held by developing country exporters; the different prices received for the commodity indicate the range of fluctuation over the decade. The symbols indicate where each commodity stands on the road to an international agreement between producers and rich world consumers.
A Producers Association only, although not usually one with sufficient muscle to push the price up.
An ‘Intergovernmental Committee’-an informal group of producers and consumers.
A formal Commodity Agreement, between producers and consumers to keep the price within a certain range.
Ecuador, CostaRica (15%), Honduras (13%), Philippines (9%) Contender for the ‘expected to do well, but never quite made it’prize’ . A strong producers’ union of Central American republics, UBEC, promised unilateral action in the mid-seventies.
But it dissipated most of its energy in fighting the 3 multinationals that control 70% of world banana trade. Success has been small, mainly a larger export tax. But Ecuador has always refused to join and now the new boy, the Philippines, adds to the problems of welding a strong, united team. Poorer producers could be candidates for the non-stocking operations of the Common Fund.
Nov. 1979 13.95 cents/lb. High Spot
June 1979 17.15 cents/lb. Low Spot
Dec. 1970 5.83 cents/lb.
Chile (IS%), Zambia (12%), Zaire (8%), Philippines (4%) The team has had its fight knocked out of it by one of the worst records for price instability during the seventies. The producers’ association (CIPEC) with some 50% of world exports but only 35% of world production has given up attempts to fix a producer price - largely because Chile didn’t want to play the solidarity game. Peru is pushing’ hard for an UNCTAD agreement, but after seven meetings the best that can be hoped for is a staggered move towards some sort of stabilisation. New synthetics, like fibre optics, are challenging copper’s Ion; run hopes.
Feb. 1980 134.52 cents/lb. High Spot
April 1974 137.58 cents/16. Low Spot
Nov. 1972 45.66 cents/lb.
Brazil (21%), Colombia (14%), Ivory Coast (6%), El Salvador, Guatemala, Mexico (4%). Basically two kinds - the rougher style African variety (robusta) and the more refined Latin-American (arabica). Both have had their ups and downs. Coffee boomed in 1977 when frosts wiped out half the Brazilian crop. But high prices turned many people off coffee, leaving producers fighting to regain demand.
The so-called International Coffee Agreement has been impotent. So the Latin-Americans have started a new game. The Bogota Group have been playing the market at its own game. Their buying of coffee ‘futures’ has helped keep prices up. Now the Africans are interested in joining in, with Ivory Coast witholding coffee from the market. But prices have fallen recently.
Feb. 1980 181.83 cents/lb. High Spot
April 1977 333.49 cents/lb. Low Spot
Oct. 1971 43.13 cents/lb.
India (25%), Sri Lanka (24%) Kenya (10%), Indonesia (8%) The commodity which revived as coffee fell. But higher prices have still not kept pace with inflation. Rising consumption in the Middle East and North America has helped to absorb the new East African producers. The Indian home market has grown to be the largest in the world.
Old and new producers have finally sunk their differences and agreed on a quota-cum-stocking system to stabilise prices. But after making hopeful noises when agreement was far away consumers are now dragging their feet.
Feb. 1980 117.09 cents/lb. High Spot
April 1977 188.29 cents/lb. Low Spot
Sept. 1972 43.90 cents/lb.
Ivory Coast (22%), Brazil (20%), Ghana (18%), Nigeria (10%) The big team of the early seventies, cocoa has been gradually dropping down the league as over-production hits prices. The one-time star, Ghana, has been replaced by Ivory Coast as the main producer and new boy, Brazil, is coming up fast.
Four negotiating Conferences in 1979 failed to renew the defunct. 1975 Cocoa Agreement. The latest of these was in March . But producers, led by Ivory Coast, have their eye on the tactics of their coffee counterparts and are trying to co-ordinate an export strategy to boost prices on their own.
Jan./Feb. 144.87 cents/lb. High Spot
July 1977 197.90 cents/lb. Low Spot
Dec. 1971 21.79 cents/lb.