WORLD TRADE
ORGANIZATIONWT/COMTD/W/121
20 November 2003
(03-6188)
Committee on Trade and Development
AN INVENTORY OF NON-FUEL COMMODITY-RELATED STUDIES
Note by the Secretariat1
I. INTRO DUCTION ................................................................................................................. ...2
II. COMMODITY PRICE TRENDS ...........................................................................................2
A. S HORT -TERM PROSPECTS ............................................................................................................3
B. L ONG-TERM TRENDS ...................................................................................................................3
C. P RICE VOLATILITY ......................................................................................................................4
III. EXPLAINING COMMODITY PRICE TRENDS.................................................................4
A. I NCOME ELASTICITIES .................................................................................................................5
B. T ECHNOLOGICAL CHANGE ..........................................................................................................5
C. M ACROECONOMIC FACTORS .......................................................................................................5
D. T RADE POLICIES ..........................................................................................................................5
E. M ARKET STRUCTURE ..................................................................................................................6
IV. IMPACT OF COMMOD ITY PRICE CHANGES................................................................6
A. F ARM INCOMES /GENERAL ..........................................................................................................6
B. M ACROECONOMIC STABILITY ....................................................................................................6
C. E CONOMIC GROWTH ...................................................................................................................7
V. RESPONSES TO COMMODITY  PRICE FLUCT UATIONS.............................................7
A. P RICE STABILIZATION .................................................................................................................7
B. M ARKETING BOARDS ..................................................................................................................8
C. I NTERNATIONAL COMMODITY AGREEMENTS .............................................................................9
1. Theory and Practice.......................................................................................................... ........9
2. Texts of International Commodity Agreements.....................................................................9
D. E XPORT TAXES .........................................................................................................................10
E. H EDGING COMMODITY PRICE RISK THROUGH FINANCIAL MARKETS .....................................10
F. D IVERSIFICATION ......................................................................................................................11
                                                     
1 This note has been prepared und er the Secretariat's own responsibility and without prejudice to the
positions of Members and to their rights and obligations under the WTO.WT/COMTD/W/121
Page 2
G. O THERS ............................................................................................................................... ......11
VI. SPECIFIC COMM ODITY ST UDIES ..................................................................................12
A. S UGAR ............................................................................................................................... ........12
B. C OFFEE AND OTHER BEVERAGES ..............................................................................................12
C. C OTTON ............................................................................................................................... ......12
D. M ETALS ............................................................................................................................... ......13
VII. MISCELLANEOU S STUDIES .............................................................................................14
VIII. DATA ...................................................................................................................... .................14
IX. PROGRAMMES DEALING WITH COMMODITIES......................................................14
A. C OMMON FUND FOR COMMODITIES .........................................................................................14
B. I NTERNATIONAL COFFEE ORGANIZATION ................................................................................15
C. I NTERNATIONAL TASK FORCE (ITF) ON COMMODITY RISK MANAGEMENT IN
DEVELOPING COUNTRIES ..........................................................................................................16
D. UNCTA D....................................................................................................................... ...........17
I. INTRODUCTION
1. This note has been prepared by the Secretariat upon request by the Committee on Trade and
Development (CTD) at its 46th Session for an inventory of documents on the issue of commodity
prices, including work done by other international organizations.
2. The inventory contains a comprehensive collection of academic and policy research on the
issue of non-fuel commodity prices.  It contains documents and reports prepared by academic
institutions, think-tanks, international commodity organizations and other internationalintergovernmental organizations.  The majority of the articles were written after 1990.  However,
since the subject of non-fuel commodity prices has a long history, a number of earlier articles that
played a key part in the development of this literature have also been included.  The inventory is
limited to non-fuel commodities essentially because th e behaviour of oil prices has diverged from that
of non-oil commodity prices and oil exporting countries face a different set of developmentchallenges.
3. In order to make the inventory as useful as possible the references have been divided into
sections based on themes.  In addition, brief descriptions of the contents of each section are provided.
These annotations summarize the main issues covered and establish links between the different
sections of the inventory.  The internet addresses (hyperlinks) are included for those articles whichcurrently can be found on the Web.
4. Beyond the bibliography, the note also contains links to sources of data for commodity prices
as well a section on commodity-related programmes or activities conducted by international
commodity agreements and international intergovernmental organizations.
II. COMMODITY PRICE TRENDS
5. There are two main features of relative commodity prices that have been documented quite
extensively in the economic literature.  The first is their long-term decline and the second is theirWT/COMTD/W/121
Page 3
volatility.  Typically, the focus of analysis is on the terms of trade between primary commodity
exports of developing countries and the manufactured exports of developed or industrial countries.
The seminal articles on long-term commodity price trends are those by Raul Prebisch and
Hans Singer.
6. Most of the articles in this section of the inventory are therefore focused on those two issues,
although there is also a reference to the current Global Economic Prospects which containspredictions about the short-term prospects for commodities.
A. S
HORT -TERM PROSPECTS
World Bank (2003).  Global Economic Prospects 2004 - Realizing the Development Promise of the
Doha Agenda.  Appendix 2.  Available http://www.worldbank.org/prospects/gep2004/appendix2.pdf
B. LONG-TERM TRENDS
Bleaney, M. and Greenway, D. (1993) "Long-run Trends in the Relative Price of Primary
Commodities and in the Terms of Trade of Developing Countries," O xford Economic Papers 45:349-
363.
Bloch, H. and Sapsford, D. (1996) "Trends in the International Terms of Trade between Primary
Producers and Manufacturers," Journal of International Development  8, 1: 53-67.
Conte, Bernard (2002) "La Détérioration des Termes de l'échange des Pays du Sud,"
http://conte.montesquieu.u-bordeaux.fr/Enseig/Lic-ecod/docs_pdf/La_DTE.pdf
Cuddington, J. (1992) "Long-run Trends in 26 primary Commodity Prices," Journal of Development
Economics  39, 2: 207-227.
Deaton, A. and Laroque, G. (1992) "On the Behaviour of Commodity Prices," Review of Economic
Studies  59, 1: 1-23
Diakosavvas, D. and Scandizzo, P. (1991) "Trends in the terms of trade of primary commodities,
1900-1982: the controversy and its origins",  Economic Development and Cultural Change  39, 2: 231-
264.
Grilli, E. and Yang, M. C. (1988) "Primary Commodity Prices, Manufacturing Goods Prices, and the
Terms of Trade of Developing Countries:  What the Long run Shows", World Bank Economic Review
2, 1: 1-47.
Leon, J. y Soto, R. (1993 "Terminos de Intercambio en La America Latina:  Una Cuantificacion de la
Hipotesis de Prebisch y Singer," Revista de Economia Aplicada  1, 1: 165-186.
Lewis, W. A. (1952) "World Production, Prices and Trade:  1870-1969," Manchester School of
Economic and Social Studies  20:105-133.
Morriset, J. (1998) "Unfair Trade? The Increasing Gap between World and Domestic Prices in
Commodity Markets during the Past 25 Years," World Bank Economic Review , 12, 3: 503-526.
Munoz Cidad, C. y Sosvilla Rivero, S. (1993) "La Polemica Sobre la Evolucion de la Relacion Real
de Intercambio de Los Paises Subdesarrollados," Revista de Economia Aplicada  1, 1: 165-186.WT/COMTD/W/121
Page 4
Prebisch, R. (1950)  The Economic Development of Latin America and its Principal Problems,  New
York: United Nations.
__________ (1996) "El Desarrollo Economico de la America Latina y Alguons de Sus Principales
Problemas," El-Trimestre-Economico  63, 1: 175-245.
Ray, G.F. (1977). "The Real Price of Primary Products", National Institute Economic Review, 81: 72-
76.
Sapsford, D. (1990) "Primary Commodity Prices and the Terms of Trade," Economic Record  66, 195:
342-356.
Sapsford, D. and Balasubramanyam, V. N. (1994) "The Long-Run Behavior of the Relative Price of
Primary  Commodities:  Statistical Evidence and Policy Implications," World Development  22, 11:
1737-1745.
Singer, H. (1950)  "The Distribution of Gain s between Investing and Borrowing Countries",
American Economic Review, Papers and Proceedings  40, 2: 473-485.
Spraos, J. (1980) "The Statistical Debate on the Net Barter Terms of Trade between Primary
Commodities and Manufactures," Economic Journal  90: 107-128.
C. PRICE VOLATILITY
Bonjean, C. A. (1997) "Termes de l'echange: De la Baisse Tendancielle au Chaos,"  Revue
d'Economie du Developpement  1: 105-128
Cashin, P. and McDermott, C. J. (2002) "The long-run Behaviour of Commodity Prices:  Small
Trends and Big Variability", IMF Staff Papers  49, 2: 175-199.
Cashin, P., McDermott, C. J. and Scott, A. (2002) "Booms and Slumps in World Commodity Prices,"
Journal of Development Economics , 69, 1: pp. 277–296.  Original working paper available at
http://www.imf.org/external/pubs/ft/wp/1999/wp99155.pdf
Swaray, R. (2002) "Volatility of Primary Commodity Prices:  Some Evidence from Agricultural
Exports in Sub-Saharan Africa," Discussion Papers in Economics  No. 6. York:  University of York.
Available at http://www.york.ac.uk/depts/econ/dp/0206.pdf
III. EXPLAINING COMMODITY PRICE TRENDS
7. Various explanations have been given for why commodity prices have been declining over
time and why they exhibit such volatility.  These have included the differences in income elasticities
for manufactures and commodities (with elasticities  being lower for commodities), productivity gains
in commodities which are captured by consumers rather than producers, global macroeconomicconditions, trade distortions in agricultural markets and the presence of large players with market
power in the commodity value chain.WT/COMTD/W/121
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A. INCOME ELASTICITIES
Bloch, H. and Sapsford, D. (2000)  "Whither the terms of trade?  An elaboration of the Prebisch-
Singer hypothesis",  Cambridge Journal of Economics  24, 3: 461-481.
Prebisch, R. (1950)  The Economic Development of Latin America and its Principal Problems,  New
York: United Nations.
__________ (1996) "El Desarrollo Economico de la America Latina y Alguons de Sus Principales
Problemas,". El-Trimestre-Economico  63, 1: 175-245.
Singer, H. (1950)  "The Distribution of Gain s between Investing and Borrowing Countries",
American Economic Review, Papers and Proceedings  40, 2: 473-485.
B. TECHNOLOGICAL CHANGE
Deaton, A. (1999) "Commodity Pr ices and Growth in Africa", Journal of Economic Perspectives 13,
3: 23-40.
Lewis, W. (1954) "Economic Development with Unlimited Supplies of Labor",  Manchester school of
economics and social studies  22: 139-191.
C. MACROECONOMIC FACTORS
Borensztein, E. and Reinhart, C. (1994) "The Macroeconomic Determinants of Commodity Prices"
IMF Staff Papers , 41, pp. 236–61.
Hua, P. (1998) "On Primary Commodity Prices: The Impact of  Macroeconomic/Monetary Shocks,"
Journal of Policy Modeling 20,6:767-790.
D. TRADE POLICIES
Bale, M. and Lutz, E. (1979) "The Effects of Trade Intervention on International Price Instability."
American Journal of Agricultural Economics  61: 512-516.
Gallagher, P (1998) "International Marketing Margins for Agricultural Products: Effects of Some
Nontariff Trade Barriers,"  American Journal of Agricultural Economics  80, 2: 325-336.
Oyejide, T. A. "Primary Commodities in the Inte rnational Trading System," in Whalley, J. (ed.)
Developing Countries and the Global Trading System.  Volume 1 .  Thematic studies from a Ford
Foundation project.  Studies in International Trade Policy Ann Arbor: University of Michigan Press,
91-111.
Rausser, G. C., Rose, M. B. and Irwin, D. A. (1990) "World Commodity Prices:  The Role of External
Debt and Industrial Country Policies," Univers ity of California at Berkeley Department of
Agricultural   and Resource Economics (CUDARE) Working Paper 516.
Yang, J., Haigh, M. S. and Leatham, D. J. (2001) "Agricultural Liberalization Policy and Commodity
Price  Volatility: A GARCH Application," Applied Economics Letters   8, 9: 593-598.WT/COMTD/W/121
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Zwart, A. and Blandford, D. (1989) "Market Intervention and International Price Stability," American
Journal of Agricultural Economics , 71, 2: 379-386.
E. MARKET STRUCTURE
Bettendorf, L. and Verbowen, F. (2000) "Incomplet e Transmission of Coffee Bean Prices:  Evidence
from the Netherlands", European Review of Agricultural Economics 27, 1: 1-16.
Feuerstein, S. (2002) "Do Coffee Roasters Be nefit from High Prices of Green Coffee", International
Journal of Industrial Organization , 20, pp. 89-118.
Koerner, J. (2002) "The Dark Side of Coffee.  Price War in the German Market for Coffee", Working
Paper No. EWP 0204, Department of Food Economics and Consumption Studies, University of Kiel.
LeClair, M. S. (2000) International Commodity Markets and the Role of Cartels  Armonk, N.Y. and
London: Sharpe.
Rakotoarisoa, M. A. and Shapouri, S. (2001) "Market Power and the Pricing of Commodities
Imported from Developing Countries:  The Case of US Vanilla Bean Imports," Agricultural
Economics  25, 2-3: 285-294.
IV. IMPACT OF COMMODITY PRICE CHANGES
8. What has been the impact of declining and volatile commodity prices on commodity-
dependent exporters?  These price factors affect export earnings and the incomes that farmers receive.
They also have important consequences for macroeconomic stability and the long-term growth
prospects of commodity exports.  The literature on the impact of commodity price changes has tended
to concentrate on the experience of sub-Saharan Africa.
A. FARM INCOMES /GENERAL
Hazell, P. B. R., Jaramillo, M. and Williamson, A. (1990) "The Relationship between World Price
Instability and the Prices Farmers Receive in Developing Countries,"  Journal of Agricultural
Economics  41, 2: 227-241.
Gunning, J. W. (2000) Trade Shocks in Developing Countries:  Africa .  Oxford: oxford University
Press.
UNCTAD (2003). Economic Development in Africa: Issues in Africa's Trade Performance.
Document No. TD/B/ 50/6 and Corr. 1.  Geneva:  UNCTAD.   Also available at
http://www.unctad.org/en/docs//tb50d6&c1_en.pdf
B. MACROECONOMIC STABILITY
Deaton, A. and Miller, R. (1995) "International Commodity Prices, Macroeconomic Performance, and
Politics in Sub-Saharan Africa," Princeton Studies in International Finance , No. 79.  Princeton:
Princeton University Press.WT/COMTD/W/121
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Kose, M. A. and Riezman, R. (2001) "Trade Shoc ks and Macroeconomic Fluctuations in Africa,"
Journal of Development Economics  65, 1: 55-80
C. ECONOMIC GROWTH
Araujo, C. (1995) "Les Producteurs Bresiliens et l'instabilite des Prix:  Differences de Comportement
entre le Nord et le Sud," Canadian Journal of Agricultural Economics  43, 3: 443-461.
Deaton, A. (1999) "Commodity Pr ices and Growth in Africa", Journal of Economic Perspectives 13,
3: 23-40.
Dehn, J. (2000) "The Effects on Growth of Commod ity Price Uncertainty and Shocks," World Bank
Policy Research Working Paper No. 2455.  Also available at http://econ.worldbank.org/docs/1210.pdf
Hadaas, Y. and Williamson, J. (2001) "Terms of Trade Shocks and Economic Performance: 1870-
1940: Prebisch and Singer Revisited", National Bureau of Economic Research Working Paper
No. 8188.  Also available at http://papers.nber.org/papers/w8188.pdf
Sachs, J. and Warner, A. (1997) "Sources  of Slow Growth in African Economies," Journal of African
Economies  6: 335-376.
Singer, H. W. and Lutz, M. (1994) "Trend and Volatility in the Terms of Trade:  Consequences for
Growth," Sapsford, D. and Morgan, W. (eds.)  The Economics of Primary Commodities:  Models,
Analysis and Policy   Aldershot, U.K.: Elgar, 91-121
Singer, H. and  Edstrom, J. (19939 "The Impact of Trends and Volatility in Terms of Trade on
GNP Growth," in Nissanke, M.  and Hewitt,-Adrian (eds.) Economic Crisis in Developing Countries:
New Perspectives on Commodities, Trade and Finance   (Essays in honour of Alfred  Maizels)
London: Pinter, 23-45.
V. RESPONSES TO COMMODITY PRICE FLUCTUATIONS
9. The problems faced by primary commodity exporters have led to a range of responses, some
taken at the national level and others at the international level.  These have included price
stabilisation, use  of marketing boards, establishm ent of international commodity agreements, the use
of export taxes, diversification of exports and the use of financial instruments to hedge commodity
price risk.  The articles found in subsections (A) to (F) reflect on the merits, costs and experience withthese various responses.
10. The set of articles in subsection (O) offer various recommendations for dealing with the
problems faced by developing country commodity exporters.  The authors include academics,
representatives of international organizations (World Bank, UNCTAD) and development-oriented
institutes (Overseas Development Institute).
A. P
RICE STABILIZATION
Cashin, P., Liang, H. and McDermott, C. J. (1999)  "Do Commodity Price Shocks Last Too Long for
Stabilization Schemes to Work?"  Finance and Development , 36, 3: 40–43.  Available at
http://www.imf.org/external/pubs/ft/fandd/1999/09/cashin.htm .WT/COMTD/W/121
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Courchane, M. and Nickerson, D. (1986) "Optimal  Buffer Stock and Futures Market Policies for
Commodity Price Stabilization," Duke Working Paper in Economics: 86-12.
Ehui, M. K and Ehui, S. K. (1997) "Optimal Pricing of Primary Commodities in Developing
Countries: A Model from Sub-Saharan Africa," in Rose, R., Tanner, C. and Bellamy, M. A. (eds.)
Issues in agricultural competitiveness:  Markets and Policies   International Association of
Agricultural Economists Occasional Paper, no. 7. Al dershot, U.K. and Brookfield, Vt.: Ashgate,
Dartmouth,  139-146.
Hewitt, A. (1993) "Commodity Market Instability and Compensatory Financing:  Why Stabex
Failed," in Nissanke, M. and Hewitt,-Adrian (eds.)  Economic Crisis in Developing Countries:  New
Perspectives on Commodities, Trade and Finance  (Essays in honour of Alfred  Maizels) London:
Pinter, 79-88.
Hughes-Hallett, A. J. (1994) "Stabilizing Earnings in Volatile Commodity Markets:  Production
Controls versus Price Stabilization," in Sapsford, D. and  Morgan, W. (eds.) The Economics of
Primary Commodities:  Models, Analysis and Policy   Aldershot, U.K.: Elgar, 50-78.
Koehler G. (1997), "The Future of STABEX", ECDPM Working Paper 44, Maastricht: ECDPM.
Maizels, A., Bacon, R. and Mavrotas, G. (1997) Commodity Supply Management by Producing
Countries:  A Case-study of the Tropical Beverage Crops.   UNU/WIDER Studies in Development
Economics.  New York and Oxford:  Oxford University Press, Clarendon Press.
Nissanke, M. (1993) "Stabilization-cum-Adjustment over the Commodity Price Cycle," in Nissanke,
M. and Hewitt,-Adrian (eds.)  Economic Crisis in Developing Countries:  New Perspectives on
Commodities, Trade and Finance   (Essays in honour of Alfred  Maizels) London: Pinter, 56-78.
Sengupta, J. K. (1989) "Some Issues in Commodity St abilization Policies," University of California at
Santa Barbara Department of  Economics Working Paper 12-89.
B. MARKETING BOARDS
Akiyama, T., Baffes, J., Larson, D. and Varangis, P. (2001)  Commodity Market Reforms: Lessons of
Two Decades   Washington, D. C.: World Bank).
de Melo, J., Olarreaga, M. and Takacs, W. ( 1996) "Pricing Policy under Double Market Power:
Madagascar and the International Vanilla Market," Centre for Economic Policy Research  Discussion
Paper No. 1447.
Krueger, A., Schiff, M. and Valdes, A. eds. (1991) The Political Economy of Agricultural Pricing
Policy, Volume 3: Africa and the Mediterranean, A World Bank Comparative Study .  Baltimore:  The
Johns Hopkins University Press.
Kwame, A., Hesp, P. and van der Laan, L. (1985) Marketing Boards in Tropical Africa . London:
African Studies Centre.
Lloyd, T. A., Morgan, C. W., Rayner, A. J. and Vaillant, C. (1999) "The  Transmission of World
Agricultural Prices in Cote d'Ivoire," Journal of International Trade and Economic Development  8, 1:
125-141.WT/COMTD/W/121
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Schiff, M. and Valdes, A. (1992) The Political Economy of Agricultural Pricing Policy: a Synthesis of
the Economics in Developing Countries, World Bank comparative study , Baltimore:  Johns Hopkins
University.
Williams, G. (1985) "Marketing Without and with Marketing Boards: the Origins of State Marketing
Boards in Nigeria," Review of African Political Economy , 12, 34: 4-15.
C. INTERNATIONAL COMMODITY AGREEMENTS
1. Theory and Practice
Behrman, J. (1977) International Commodity Agreements  Overseas Development Council Monograph
# 9 London: ODC.
________ (1984) "The Analytics of International Comm odity Agreements," In Carl K. Eicher and
John M. Staatz, eds. Agricultural Development in the Third World  (Baltimore, MD: Johns Hopkins
University Press).
Bohman, M., Jarvis, L. and Barichello, R. (1996) "Rent Seeking and International Commodity
Agreements:  The Case of Coffee," Economic Development and Cultural Change  44, 2: 379-404.
Chimni, B. S. (1987) International Commodity Agreements: A Legal Study.  London and New York:
Routledge.
Ernst, E. (1989) International Commodity Agreements. New York : Aspen Publishers.
Gardner, B. (1979) "Robust Stabilization Policies for International Commodity Agreements,"
American Economic Review  69, 2: 169-172.
Gilbert, C. (1995) "International Commodity Control:  Retrospect and Prospect", World Bank Policy
Research Working Paper  No. 1545. Washington, D. C.: World Bank.
Kravis, I. (1968) "International Commodity Ag reements to Promote Aid and Efficiency," Canadian
Journal of Economics  1, 2: 295-317.
Maizels, A. and Palaskas, T. B. (1995) "The Common Fund and the Behaviour of the Ten "Core"
Commodity Prices,"  UNCTAD Review ,  177-188
United Nations (1998) Intergovernmental Producer-Consumer Cooperation in Commodities in
mid1990s : A Handbook on International Commodity  Agreements, Arrangements and Study Groups.
New York and Geneva: UN.
2. Texts of International Commodity Agreements
Common Fund for Commodities (1980).  Agreement Establishing the Common Fund for
Commodities .  Geneva: Common Fund for Commodities.  Available at http://www.common-
fund.org/facts/agreeuk.pdf
International Coffee Organization (2000).  International Coffee Agreement 2001.   London, England.
Available at http://www.ico.org/frameset/icaset.htmWT/COMTD/W/121
Page 10
International Cocoa Organization (2001).  International Cocoa Agreement 2001  UNCTAD Document
TD/COCOA.9/7 and Corr.1. (Gen eva: UNCTAD).  Available at
http://www.icco.org/agreement/agree01english.pdf
International Natural Rubber Organization (1995).  Main Features of the International Natural Rubber
Agreement, 1995 (INRA III).  Available at http://www4.jaring.my/inro/contents.htm
International Sugar Organization (199 2). International Sugar Agreement.
http://www.sugaronline.com/ISO/isohome/ag reements/agreementenglish.htm#chapter1
D. EXPORT TAXES
Andic F.M., S. Andic and I. Tirado de Alonso (1990),   "An Exploration in the Feasibility of an Export
Tax Revenue Stabilization Fund" in Tanzi V, (ed) " Fiscal Policy in Open Developing Economics ",
Washington:  IMF
Bautista R. M. (1996), "Export Tax as Income Stab iliser under Alternative Policy Regimes:  The Case
of Philippine Copra" in de Dios E. and Fabella R.V. (eds) " Choice, Growth and Development:
Emerging and Enduring Issues " Quezon City: University of Philippine Press.
Hudson, D. and D. Ethridge (1999), "Export Taxes and Sectoral Economic Growth:  Evidence from
Cotton and Yarn Markets in Pakistan", Agricultural Economics , 20:263-276.
Larson (1996), "Indonesia Palm Oil Subsector", Policy Research Working Paper 1654, Washington:
The World Bank
Marks S., F. Larson and J. Pomeroy (1998), "Economic Effects of Taxes on Exports of Palm Oil
Pruducts",  Bulletin of Indonesian Economic Studies , 34(3):37-58.
OECD (2003), "Analysis of Non-Tariff Measures:  Th e Case of Export Duties", Working Party of the
Trade Committee, TD/TC/WP(2002)54/FINAL, Paris: OECD.
Warr P.G. (2001), "Welfare Effects of an Export Tax:  Thailand's Rice Premium", American Journal
of Agricultural Economics , 83(4):903-920.
Warr P. (2002), "Export Taxes and Income Distribution:  The Philippine Coconut Levy"
Weltwirtschaftliches Archiv , 138(3):437-457.
E. HEDGING COMMODITY PRICE RISK THROUGH FINANCIAL MARKETS
Chominot, A. (2000) "Instruments de Marches anti-risque et Garantie des Prix Argicoles," Economie
Rurale   259: 86-87
Faruqee, R. and Coleman, J. R. (1996) "Managing Price Risk in the Pakistan Wheat Market," World
Bank Discussion Paper  No. 334.  Also available at http://www-
wds.worldbank.org/servlet/WDSContent Server/WDSP/IB/1996/07/01/000009265_3961214183108/R
endered/PDF/multi_page.pdf
Morgan, C. W., Rayner, A. J. and Ennew, C.T. (1994) "Price Instability and Commodity Futures
Markets ," World Development  22, 11: 1729-1736.WT/COMTD/W/121
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Morgan,C. A., Rayner, A. J. and Vaillant, C. ( 1999) "Agricultural Futures Markets in LDCs:  A
Policy Response to Price Volatility," Journal of International Development  11,6: 893-910
Yabuki, N., Varangis, P. and Larson, D. F. (1998) "Commodity Risk Management and Development,"
World Bank Policy Research Working Paper No. 1963.  Also available at
http://econ.worldbank.org/docs/369.pdf
Varangis, P. and Larson, D. F. (1996) "Dealing with Commodity Price Uncertainty," World BankPolicy Research Working Paper No. 1667.  Also available at
http://econ.worldbank.org/files/784_wps1667.pdf
F. DIVERSIFICATION
Collier, P. (2002) "Primary Commodity Dependence and Africa's Future," Available at
http://econ.worldbank.org/files/14984_Collier-full.pdf
DeRosa, D. A. (1992) "Commodity Dependence and Export Diversification:  Some Empirical
Evidence Bearing on Proposals to Diversify LDC Exports," Eastern Africa Economic Review  8, 1: 54-
74
Ng, F. and Yeats, A. (2002) "What Can Afri ca Expect from its Traditional Exports?" Africa Region
Working Paper Series No. 26, Washington, DC: World Bank.
G. OTHERS
Cramer, C. (1999) "Can Africa Industrialize by Processing Primary Commodities?  The  Case of
Mozambican Cashew Nuts," World Development  27, 7: 1247-1266.
De Ferranti, D., Perry, G., Lederman, D. and Maloney, W. (2001) From Natural Resources to the
Knowledge Economy — Trade and Job Quality, Washington, DC: World Bank.
Frankel, J. (2003) "A Proposed Monetary Regi me for Small Commodity Exporters:  Peg the Export
Price ("PEP")" International Finance.  Spring 6, 1: 61-88
Maizels, A. (1994) "Commodity Market Trends and Instabilities:  Policy Options for  Developing
Countries,"  UNCTAD Review  53-64
Page, S: and Hewitt, A. (2001) World Commodity Prices: Still a Problem for Developing Countries.
London: Overseas Development Institute.  Available at
http://www.odi.org.uk/iedg/publications/commodities.pdf
UNCTAD (2003). Report Of The Meeting Of Eminent Persons On Commodity Issues  Document No.
TD/B/ 50/11.  Geneva: UNCTAD.  Also available at http://www.unctad.org/en/docs//tb50d11_en.pdf
Yabuki, N. and Akiyama, T. (1996)  "Is Commodity-Dependence Pessimism Justified? Critical
Factors and Government Policies that Characterize Dynamic Commodity," World Bank PolicyResearch Working Paper No. 1600.  Also available at
http://econ.worldbank.org/files/531_wps1600.pdfWT/COMTD/W/121
Page 12
VI. SPECIFIC COMMODITY STUDIES
11. This section includes studies focusing on specific commodities.
A. SUGAR
Borrell, B. and Larson, D. F. (2001) "Sugar Policy and Reform," World Bank Policy Research
Working Paper 2602.  Also available at http://econ.worldbank.org/files/1724_wps2602.pdf
B. COFFEE AND OTHER BEVERAGES
Giovanucci, D. and Freek, J. K. (2003) The State of Sustainable Coffee: A Study of 12 Major Markets.
Cali, Colombia: Feriva, S. A.  Available at
http://lnweb18.worldbank.org/E SSD/sdvext.nsf/43ByDocName/Th eStateofSustainableCoffee--
AStudyofTwelveMajorMarkets/$FILE/State+of+Sustainable+Coffee+Part+I.pdf
, http://lnweb18.worldbank.org/ ESSD/sdvext.nsf/43ByDocName/TheStateofSustainableCoffee--
AStudyofTwelveMajorMarkets Pages75-140/$FILE/PARTE+2.pdf  and
http://lnweb18.worldbank.org/E SSD/sdvext.nsf/43ByDocName/Th eStateofSustainableCoffee--
AStudyofTwelveMajorMarketsPages141-199/$FILE/State+of+Sustainable+Coffee+Part+III.pdf
International Coffee Organization.  The Coffee Crisis .  Available at http://www.ico.org/
International Trade Centre (2002). Coffee: An Exporter's Guide.   Geneva: ITC).
Ponte, S. (2002) "The "Latte Revolution"? Regulation, Markets and Consumption in the Global
Coffee Chain", World Development , 30, 7: pp. 1099-1122.
Talbot, J. M. (1995) "The Regulation of the World Coffee Market: Tropical Commodities and the
Limits of Globalization," in McMichael, P. (ed) Food and Agrarian Orders in the World Economy
Westport, Conn. and London:  Greenwood, Praeger,  139-168.
Talbot, J. (2002) "Tropical Commodity Chains, Forward Integration Strategies and International
Inequality: Coffee, Cocoa and Tea," Review of International Political Economy   9, 4: 701-734
Varangis, P., Siegel, P., Giova nnucci, D. and Lewin, B. (2003) "Dealing with the Coffee Crisis in
Central America:  Impacts and Strategies," Worl d Bank Policy Research Working Paper No. 2993.
Available at http://econ.worldbank.org/files/24791_wps2993.pdf
C. COTTON
Araujo-Bonjean, C. et Brun, J. F. (2001) "Les Politiques de Stabilisation des Prix du Coton en Afrique
de la Zone Franc sont-elles Condamnées?"  Economie Rurale  (266): 80-90
Badiane, O., D. Ghura, L. Goreux and P. Masson (2002), "Cotton Sector Strategies in West and
Central Africa", IMF Working Paper WP/02/173, Africa Department, Washington D.C.: IMF.
http://www.imf.org/external/pubs/ft/wp/2002/wp02173.pdf .
Baffes, J. (2003), "Cotton: Market Setting, Po licies, Issues and Facts", mimeo, Washington D.C.:
World Bank.WT/COMTD/W/121
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Baffes, J. (2002), "Tanzania's Cotton Sector; constraints and challenges in a global environment",
Africa Region Working Paper Series No. 42, Washington D.C.:  World Bank.
http://www.worldbank.org/afr/wps/wp472htm
Centre for International Economics (2002), "Cotton Price Distortions: Building a case for reform",
Canberra, Centre for International Economics. http://www.thecie.com.au/reports_list.htm .
Ghura, D., Goreux, L., Badiane, O. and Masson, P.  (2002) "Cotton Sector Strategies in West and
Central Africa," World Bank Research Working Paper No. 2867-A.  Also available at
http://econ.worldbank.org/files/16313_WPS2867-a.pdf
____________________ (2002) "Evolution des filières cotonnieres en Afrique de l'Ouest et du
Centre," World Bank Research Workin g Paper No. 2867-B.  Also available at
http://econ.worldbank.org/files/16315_wps2867-French.pdf
Goreux, L. and J. Macrae (2003), "Reforming the Cotton Sector in Sub-Saharan Africa", Africa
Region Working Paper Series No. 47, Washington D.C.: World Bank.
http://www.worldbank.org/afr/wps/wp47.htm
Hugon, P. et Mayeyenda, A. (2003) "Les Effets des Politiques des Prix dans les Filieres Coton enAfrique Zone Franc:  Analyse Empirique," Economie Rurale   275: 66-82.
International Cotton Advisory Committee (2002), "Production and Trade Policies affecting the Cotton
Industry", Washington D.C.: ICAC.
International Cotton Advisory Committee (2003), "Production and Trade Policies affecting the Cotton
Industry", Washington D.C.: ICAC.
International Cotton Advisory Committee (2003), "Impacts of Government Measures on African
Cotton Producers" Statement by the Executive Director, Washington D.C.: ICAC.
Poulton, C., P. Gibbon, B. Hanyani-Mlambo, J. Kydd, M., Larsen, W., Maro, A. Osorio, D. Tschirley
and B. Zulu (2001), "Competition and Coordination in Liberalised African Cotton Market Systems",mimeo, Imperial College at Wye.
Tokarick, S. (2003), "Measuring the Impact of Distortions in Agricultural Trade in Partial and
General Equilibrium", IMF Working Paper WP/03/110, Washington D.C.: IMF.
http://www.imf.org/external/pubs/ft/wp/2003/wp03110.pdf .
Satyanarayan, S., Thigpen, E. and Varangis, P. (1995) "Hedging Cotton Price Risk in Francophone
African Countries," Rivista Internazionale di Scienze Economiche e Commerciali  42, 3: 189-201.
D. METALS
Fama, E. and French, K. R. (1986) "Business Cycles and the Behavior of Metals Prices," University
of California at Los Angeles Anderson Graduate School of Management Finance Working Paper: 31-
86.
Spilimbergo, A. (2002). "Copper and the Chilean Economy, 1960-98",  Journal of Policy Reform , 5,
1: pp. 115-126.WT/COMTD/W/121
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VII. MISCELLANEOUS STUDIES
Nissanke, M. and Hewitt, A. (1993)  Economic Crisis in Developing Countries:  New Perspectives on
Commodities, Trade and Finance   (Essays in honour of Alfred  Maizels) London: Pinter.
Sapsford, D. and Morgan, W. (1994) The Economics of Primary Commodities: Models, Analysis and
Policy  Aldershot, U.K.: Elgar.
United Nations Conference on Trade and Developmen t (2002).  "Commodity Export Dependence, the
International Poverty Trap and New Vulnerabilities," in The Least Developed Countries, 2002 Report   
Geneva: UNCTAD), pp 137-166. Also available at
http://www.unctad.org/Templates/webflyer.as p?docid=2026&intItemID=1397&lang=1&mode=down
loads.
World Trade Organization (2003). "Non-fuel Commodity Prices," in World Trade Report   Geneva:
WTO), pp 34-45.
VIII.  DATA
12. Various international organizations and commodity organizations provide access to their data
on commodity prices.  The most comprehensive and publicly available database on prices is that of
the IMF.  For detailed price series on specific commodities, the commodity organizations are the best
sources of the information.
International Monetary Fund.  IMF Commodity Price.
http://www.imf.org/external/np/res/commod/index.asp
International Cocoa Organization.  http://www.icco.org/prices/prices.htm  and
http://www.icco.org/prices/pricesave.htm
International Coffee Organization. Historical Statistical Data.  Available at
http://www.ico.org/frameset/traset.htm
International Copper Study Group.  http://mmsd1.mms.nrcan.gc.ca/icsg/markets/default.asp
International Sugar Organization. http://www.sugaronline.com/iso/isoprice/isoprice.htm
World Bank.  http://www.worldbank.org/prospects/pinksheets.htm
IX. PROGRAMMES DEALING WITH COMMODITIES
13. A number of international organizations, commodity organizations and multilateral agencies
have specific programmes on commodities.  This section provides information on their activities
relating to commodities.
A. COMMON FUND FOR COMMODITIES
14. The Common Fund for Commodities is an autonomous intergovernmental financial
institution established within the framework of the United Nations.  The Agreement Establishing theCommon Fund for Commodities was negotiated in the United Nations Conference on Trade andWT/COMTD/W/121
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Development (UNCTAD) from 1976 to 1980 and became effective in 1989.  The rationale of the
Common Fund's mandate is to enhance the socio-economic development of commodity producers.
15. The Common Fund has a commodity focus instead of a country focus allowing it to
concentrate on the general problems of commodities of interest to several developing countries.  The
activities of the Fund mainly comprise:
/g216 commodity development measures aimed at improving the structural conditions in
markets and enhancing the long-term competitiveness and prospects of particular
commodities.  They include research and development;  productivity and qualityimprovements;  transfer of technology;  diversification and processing;  improvement ofmarketing and market access;  and,
/g216 commodity market development activities which assist developing countries and, in
particular least developed countries (LDCs), to function effectively in a liberalised globaleconomy.  Projects in this field include physical market development;  enhancement of
market infrastructure;  facilitation of private sector initiatives;  and commodity price risk
management.
16. Some of its recent projects include:
/g216 Sustainable Coconut Production through Cont rol of the Lethal Yellowing Disease
/g216 Enhancing the Viability and Competitiveness of Caribbean Sugar Industries
/g216 Cocoa Productivity and Quality Improvement
/g216 Hides and Skins Improvement Scheme in West Africa (Burkina Faso, Mali, Niger and
Senegal)
/g216 Commercialisation of Hides and Skins by Improving Collection and Quality in Small-
Holder Farming Systems in Tanzania
/g216 Development, Production and Trade of Organic Tea
/g216 Demonstration of Rubberwood Processing Technology and Promotion of Sustainable
Development in China and other Asian Countries
/g216 Research and Development for the Use of Sisal Fibres in Construction Materials
/g216 Research and Development for the Value Addition to Cotton Plant by-Produce
/g216 Utilization of Small Diameter Logs from Sustainable Sources for Bio-Composite
Products
/g216 Cocoa Quality and Productivity Improvement
Website: http://www.common-fund.org/
B. INTERNATIONAL COFFEE ORGANIZATION
17. With respect to improving coffee prices, the ICO has focussed on the following three broad
strategies:
(a) Coffee quality improvement programme .  The International Coffee Council adopted
Resolution number 399 on 24 May 2001 encouraging ICO Member countries to takemeasures to divert defective coffees from the market and requesting the Executive
Director (of the ICO) to consider such further studies as might be needed in this
connection.  These studies indicated that it should be possible to implement measures
designed to improve the quality of coffee on the global market through restricting
exports of coffee below a minimum accepted quality level and diverting low-gradeWT/COMTD/W/121
Page 16
coffee to alternative uses.  As a result the Executive Director introduced a document
outlining a framework for action needed to implement a Coffee Quality-Improvement
Programme (CQP).
(b) Diversification Programm.  The ICO is promoting the development of a diversification
programme which would encompass efforts to generate complementary earnings for
growers, such as by the introduction of new crops, without eliminating coffee growingitself.  The first diversification related ICO project including Cuba, Dominican
Republic, Haiti and Venezuela, was approved by the International Coffee Council in
September 2002.  A Mexican pilot project to diversify into forest products from coffee
was presented to the Council in May 2003 and was acclaimed as a priority and a useful
model for possible future initiatives elsewhere.
(c) Market Development.  In order to improve demand for coffee, the ICO is seeking to
increase coffee consumption among the 80 per cent of the world population who do notcurrently drink coffee, using appropriate strategies for traditional markets, new and
emerging markets, and coffee producing countries themselves.  In traditional markets, a
constraint for increasing coffee consumption is the linking of coffee with fears about
the effects on health.  However, there is some scientific information available on the
various positive health effects of coffee drinking, including the high content ofantioxidants in coffee.  In 2001 the "Positively Coffee" pilot project was launched to
disseminate information on coffee and antioxidants to consumers.  In new and
emerging markets, activities envisaged include ongoing development of coffee
consumption in Russia and China through Coffee Festivals and enhancement of
consumption by associating it with cultural events.  Imports of coffee have doubled inChina, and increased by more than 75 per cent in Russia in this period.  ICO promotion
activities such as media briefings, Coffee Festivals and the dissemination of
educational materials such as the Story of Coffee have contributed to the remarkable
growth in these markets, increasing public awareness of coffee, and achieving
favourable media coverage.
Website: http://www.ico.org/
C. INTERNATIONAL TASK FORCE (ITF) ON COMMODITY RISK MANAGEMENT IN DEVELOPING
COUNTRIES
18. The International Task Force on Commodity Risk Management (ITF), convened in
January 1999, is a partnership of private and public sector institutions exploring new, market-based
approaches for assisting small-scale producers in developing countries to better manage their
vulnerability to commodity price fluctuations.  The World Bank is taking the lead in the development
and implementation of this market based approach.  The ITF is partially supported through the
contributions of donor countries.  Other stakeholders include international institutions, farmers'
organizations, commodity exchanges, and other private sector entities.
19. ITF work is being pursued in three phases.  Phase 1 entails a desk review of a commodity
sector in a specific country to evaluate state intervention in the sector and whether there is a liquid
exchange that can be used to lay off the risk.  Phase 2 progresses from Phase 1 to involve fieldwork
that will determine the possibility of developing an operationalized program to supply price insurancein a given sector.  Phase 3 lays the foundations for implementing price insurance transactions.
Phase 3 consists of (a) developing an in depth cost estimate of running a pilot program
(b) establishing a baseline data set to evaluate impact and results and (c) making a decision onWT/COMTD/W/121
Page 17
whether or not to develop a pilot price insurance service.  The ITF to date has completed over ten
Phase 1 reports, four Phase 2 reports, and is beginning work on Phase 3.
20. Beyond these studies, the ITF is working on projects in El Salvador (coffee), Tanzania
(coffee), Thailand (rubber) and Mongolia (copper).
Website: http://www.itf-commrisk.org/
D. UNCTAD
21. The Commodities Branch of UNCTAD is involved in activities relating to risk management
and finance, market information and transparency, and diversification and natural resources.
22. Market information and transparency.  Specific activities include publications such as World
Commodity Survey , and The Monthly Commodity Price Bulletin .  UNCTAD is also implementing a
project "INFOCOMM" - market information in the commodities area - financed by the Governmentof France.  This involves the development of an  International Commodity Exchange, the publication
of the World Commodity Survey 2000-2001, and the preparation of a CD-Rom on cocoa market
structures.
23. Diversification and Natural Resources.  There is a specific project on diversification and
commodity based development, financed by the United Nations development account.  It aims (i) topromote the horizontal, vertical and geographical di versification of production and trade structures;
(ii) to improve government's capacities to formulate focused, effective and sequenced policies in this
respect;  (iii) to increase the competence of en terprises in adapting their business strategies and
supplies to the Post-Uruguay Round trading framewor k;  and (iv) to strengthen positive linkages
between the commodity sector and the rest of the economy.
24. Eminent Persons meeting on Commodities.  During its 57
th session, the UN General Assembly
adopted resolution 57/236 which called upon  the Secretary-General of the United Nations Conference
on Trade and Development to designate independent eminent persons to examine and report on
commodity issues, including the volatility in comm odity prices and declining terms of trade, for
consideration by the Trade and Development Board and, subsequently, by the General Assembly at its58
th session.  The meeting of the Eminent Persons took place on 22-23 September 2003 and they
submitted their recommendations.
Website: http://r0.unctad.org/commodities/
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