Back Matter

Back Matter

Author(s):
International Monetary Fund
Published Date:
January 1986
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    World Economic and Financial Surveys

    April 1986World Economic Outlook: A Survey by the Staff of the International Monetary Fund.
    May 1986Primary Commodities: Market Developments and Outlook, by the Commodities Division of the Research Department.

    Beginning in 1986 the Fund is using a new commodities price index. Appendix I of this paper provides a description of the new index.

    The movements in the price indices for commodity groups and for the commodities comprising these groups are examined in greater detail in Sections II through V.

    The implications of the appreciation of the U.S. dollar in the 1980s for the dollar prices of commodities and for real commodity prices are examined in World Economic Outlook, International Monetary Fund (Washington), April 1985, pp. 134-138. Based on an analysis of the period from the early 1970s to the early 1980s, the elasticity of dollar prices of primary commodities with respect to the exchange rate of the U.S. dollar vis-à-vis other major currencies was estimated at minus 0.75, but no significant influence of the exchange rate on real commodity prices was found.

    It should be emphasized that these data relate to a single “basket” of primary commodities and do not reflect differences in the composition of the basket of the primary commodities imported by different countries.

    K. Chu and T. Morrison, “The 1981-82 Recession and Non-Oil Primary Commodity Prices,” Staff Papers, International Monetary Fund (Washington), Vol. 31 (March 1984), pp. 93-140.

    K. Chu and T. Morrison, “World Non-Oil Primary Commodity Markets: A Medium-Term Framework of Analysis,” Staff Papers, International Monetary Fund (Washington), Vol. 33 (March 1986), pp. 139-184.

    Chu and Morrison (1984).

    Based on estimates from the Fund’s World Economic Outlook.

    A recent study has shown that export volume of the non-fuel developing countries is positively related to economic activity in the industrial countries and inversely related to the real effective exchange rate of the exporting countries. See M. Bond, “Export Demand and Supply for Groups of Non-Oil Developing Countries,” Staff Papers, International Monetary Fund (Washington), Vol. 34 (March 1985), pp. 56-77.

    The index of production of food commodities was constructed using the same weights for individual commodities as for the price index. Crop year data are used for a number of commodities (e.g., 1973/74 crop year data shown as 1973). The same method is used for the construction of indices of stocks and supply.

    Price quotations refer to the U.S. No. 1 hard red winter wheat, ordinary protein, f.o.b. Gulf of Mexico ports.

    In this report data for the EC do not include Portugal and Spain, which joined the EC on January 1, 1986.

    Price quotations refer to U.S. No. 2 yellow corn, f.o.b. Gulf of Mexico ports.

    Price quotations refer to Thai milled white rice, 5 percent broken, f.o.b. Bangkok.

    The representative price for the free market is the International Sugar Agreement price, which is the average of the New York Contract No. 11 spot price and the London Daily Price, stowed in bulk, f.o.b. Caribbean ports. The U.S. import price is the New York Contract No. 12 spot price, duty paid, delivery in bulk, c.i.f. Atlantic and Gulf of Mexico ports. The EC guaranteed price, expressed in ECUs a 100 kilograms, refers to unpacked sugar of standard quality, c.i.f. European ports.

    The International Sugar Agreement of 1977 was succeeded at the beginning of 1985 by a new two-year agreement without market stabilization provisions, the International Sugar Agreement of 1984. See IMF Survey, December 10, 1984, p. 370, for an outline of the operation of the 1977 International Sugar Agreement.

    Price quotations for nearest forward shipments of United States soybeans, in bulk, c.i.f. Rotterdam; of United States soybean meal, 44 percent protein in bulk, c.i.f. Rotterdam; and of Dutch soybean oil, in bulk, f.o.b. ex-mill Rotterdam.

    Price quotations are for nearest forward shipment, Sumatra/Malaysia oil, maximum 5 percent free fatty acid, in bulk, c.i.f. Northwest European ports.

    Price quotations for coconut oil refer to nearest forward shipment, Philippines/Indonesia oil in bulk, c.i.f. Rotterdam.

    Price quotations for nearest forward shipments of groundnut oil of any origin, in bulk, c.i.f. Rotterdam and of Argentine groundnut meal, 48-50 percent protein, in bulk, c.i.f. Rotterdam.

    Price quotations refer to imported frozen boneless beef, separate, 85 percent visible lean, from Australia and New Zealand, f.o.b. U.S. ports.

    Price quotations refer to New Zealand lamb, grade PL, Smithfield Market, London.

    Cocoa is included in this group because of its traditional association with coffee and tea as a beverage and because it shares with them certain characteristics with respect to supply. It should, however, be noted that the beverage use of cocoa is secondary to its use in chocolate confectionery.

    Indices of production, stocks, and supply for beverages are constructed using the same weights for individual commodities as in the price index. Crop year data are used for coffee and cocoa (e.g., 1976/77 crop year data are shown as 1976) and calendar year data for tea.

    The ICO composite indicator is an average of the ICO indicator prices for robusta and “other milds.” Both are physical prices for specific grades of coffee. The robusta indicator is an average of prices ex-dock New York (Angola Ambriz 2BB, Cote d’Ivoire Grade II, and Uganda Standard) and ex-dock Le Havre/Marseille (Côte d’Ivoire Superior Grade II, Cameroon Superior Grade I, Central African Superior, and Madagascar Superior Grade II). The “other milds” indicator is an average of prices ex-dock New York (El Salvador Central Standard, Guatemala Prime Washed, Mexico Prime Washed), and ex-dock Bremen/Hamburg (El Salvador High Grown, Guatemala Hard Bean, and Nicaragua Strictly High Grown).

    See IMF Survey, December 10, 1984, p. 372, for an outline of the operation of the 1977 and 1983 International Coffee Agreements.

    The 23 exporters “entitled to basic quotas” are subject to quota reductions or increases as triggered by price movements. The remaining 24 countries (26 in 1985/86 following the accession of Cuba and Zambia) are not subject to automation quota adjustments during the year.

    Brazil’s crop year is July/June and therefore differs from the coffee year on which Table 25 is based.

    Price quotations refer to the London auction price, average all teas.

    To a limited extent, the low prices also reflected an abundance of relatively lower-quality teas.

    Price quotations refer to the ICCO daily price, which is the average of the nearest three active future trading months on the New York Cocoa Exchange at noon and on the London Cocoa Terminal Market at closing time.

    See IMF Survey, December 10, 1984, p. 372, for an outline of the operation of the 1980 International Cocoa Agreement.

    Price quotations for medium-staple cotton refer to the Liverpool Index “A,” 1-3/32 inch staple, average of the cheapest five of ten styles, c.i.f. Liverpool. Unless specified otherwise, “cotton prices” refer to medium-staple cotton.

    Price quotations for long-staple cotton refer to Egyptian Fully Good, Giza 77, c.i.f. Liverpool.

    The United States remains by far the largest single supplier of the export market with nearly one third of total exports.

    Under the acreage reduction program that succeeded the PIK program, producers were required to idle 30 percent of their land in order to qualify for various benefits including government loans and “deficiency payments.”

    Price quotations for first quality ribbed smoked sheets (RSSl), in bales, spot, f.o.b. Malaysia.

    The MIP is defined as the average official price for RSSl, RSS3, and TSR20 quality rubber on the Kuala Lumpur, London, New York, and Singapore markets, expressed in equally weighted Malaysian and Singapore cents a kilogram. The lower intervention price is 177 M-S cents a kilogram; the upper intervention price is 239 M-S cents a kilogram.

    See IMF Survey, December 10, 1984, pp. 370-371, for an outline of the operation of the INRA.

    The volume of Japanese hardwood plywood imports increased by about 60 percent in 1985.

    Price quotations for U.K. Dominion, clean, dry-combed basis: 64’s for fine wool and 50’s for coarse wool.

    Held by Bangladesh, Burma, India, Nepal, and Thailand.

    Producing countries have different dates for the crop year. For example, in Thailand the crop year is September/August, and in Burma, April/March.

    Price quotations refer to East African, U.G., c.i.f. European ports.

    Price quotations refer to the U.S. wholesale price for hides of packer’s heavy native steers, over 53 pound hides, Chicago, f.o.b. shipping point.

    Price quotations refer to prices on the LME, cash for delivery on the following business day, higher grade cathodes, minimum purity 99.9 percent, c.i.f. U.K. ports.

    Price quotations refer to aluminum sold in the LME, cash for delivery on the following business day, 99.5 percent minimum aluminum content, in the form of T-bars or ingots, c.i.f. European ports.

    Currently, smelters in the United States account for about 30 percent of primary aluminum capacity in nonsocialist countries (45 percent in 1970), and those in South America and Oceania together, a total of 17 percent (4 percent). Japan accounts for less than 2 percent of the total capacity (6 percent).

    Price quotations refer to “spot” deliveries (c.i.f. at German ports) of Brazilian ore (with 65 percent iron content). Spot deliveries and short-term sales account for only about 2 percent of total world exports; most of the transactions take place under long-term contracts, which are negotiated every year or every other year. Although spot sales account for a small part of total trade, spot prices have a close correlation with contract prices. Changes in free market prices are reflected in contract prices negotiated, and contract prices in turn affect spot prices in the following months.

    Price quotations refer to prices on the LME, cash for delivery on the following business day, standard grade, minimum purity 99.75 percent, c.i.f. European ports.

    In October 1984 the Kuala Lumpur Tin Market replaced the Penang Straits Tin Market as that on which the indicator price of the ITA is determined.

    Export controls, or country specific ceilings on the export of tin in concentrates, were introduced initially in the second quarter of 1982 and intensified in the third quarter of 1983 to an aggregate quarterly limit of 22 thousand tons. They remained in effect at this limit through 1985.

    Prices are cash for delivery on the following business day, minimum 99.8 percent purity, in form of cathodes, pellets, or briquettes, c.i.f. Northwest European ports.

    Price quotations refer to LME, cash for delivery on the following business day, zinc produced by distillation or electrolysis, minimum purity 98 percent (standard), c.i.f. U.K. ports.

    Prices are cash for delivery on the following business day, refined pig, minimum purity 99.97 percent, c.i.f. U.K. ports.

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