Showing papers on "Commodity published in 1993"

Testing market integration: New approaches with case material from the West Bengal food economy

Abstract: Given the inferential dangers of received methods, a new methodology is introduced to provide a sequence of tests, using weekly spot prices, to examine the dynamic relationship of market commodity prices in three locations in West Bengal. Tests suggest that the markets are integrated, but a lower degree of integration of paddy and rice prices is identified. The hypothesis of full market integration is rejected. Structural and institutional factors which affect the specifics of performance are identified. Physical isolation, the institutional complexity of marketing systems and contractual forms, the polarisation of assets, assets specificity, the institutional control of information and price formation, the underdevelopment of linked markets and the idiosyncratic implementation of state regulatory policy and auto‐regulatory responses enter the explanation.

Exporting High-Value Food Commodities: Success Stories from Developing Countries

Abstract: This paper provides a synthesis of notable success stories of demand-driven production, processing, and marketing of high-value foods (HVF) among developing countries. It examines in comparative perspective, the development, organization, and performance of entire commodity systems rather than the experience of individual projects or companies. It focuses on cross-cutting issues and common patterns rather than elaborating on the microeconomic and historical details of individual cases. By identifying common technical, institutional, policy, and other factors which have contributed to commodity system development and international competitiveness, the paper seeks to contribute to the design of improved strategies for supporting food market development and export diversification in developing countries and in the formerly centrally-planned economies. It identifies a series of intrinsic technical and economic characteristics of food commodities/raw materials, food production, and marketing infrastructure and services which can lead commodity system participants to experience major problems related to production and market risk, inadequate or asymmetric information, logistical bottlenecks, and high transaction costs. The paper also examines organizational patterns in the focal commodity system, including competitive structures and institutional links between producers, processors/exports, and foreign market distributors.

Generic promotion of beef: measuring the impact of the us beef checkoff

Abstract: Generic promotions of commodities are growing in importance. In the US, commodity industry assessments or checkoffs (i.e. a per unit levy or tax) are used to underwrite domestic and international promotions by commodity groups. The US beef checkoff is one of the largest of these new national commodity programmes. Evaluation of the economic impact of the beef promotion is an essential part of the beef checkoff. A model for evaluating the US beef programmes is estimated and the methodology is applicable to other commodity models that include advertising and promotion expenditures. The beef analysis shows a positive and significant return to the beef industry, with an average of approximately $5 for each $1 invested for the quarters 1987:1 through 1991:2.

Forecasting volatility in commodity markets

Abstract: Commodity prices have historically been among the most volatile of international prices. Measured volatility (the standard deviation of price changes) has not been below 15 percent and at times has been more than 50 percent. Often the volatility of commodity prices has exceeded that of exchange rates and interest rates. The large price variations are caused by disturbances in demand and supply. Stockholding leads to some price smoothing, but when stocks are low, prices can jump sharply. As a result, commodity price series are not stationary and in some periods they jump abruptly to high levels or fall precipitously to low levels relative to their long-run average. Thus it is difficult to determine long-term price trends and the underlying distribution of prices. The volatility of commodity prices makes price forecasting difficult. Indeed, realized prices often deviate greatly from forecasted prices, which has led to the practice of giving forecasts probability ranges. But assigning probability ranges requires forecasting future price volatility, which, given uncertainties about true price distribution, is difficult. One potentially useful source of information for forecasting volatility is the volatility forecasts imbedded in the prices of options written on commodities traded in exchanges. Options give the holder the right to buy (call) or sell (put) a certain commodity at a certain date at a fixed (exercise) price. Options prices depend on several variables, one of which is the expected volatility up to the maturity date. Given a specific theoretical model, the market prices of options can be used to derive the market's expectations about price volatility and the price distribution. The authors systematically analyze different methods'abilities to forecast commodity price volatility (for several commodities). They collected the daily prices of commodity options and other variables for seven commodities (cocoa, corn, cotton, gold, silver, sugar, and wheat). They extracted the volatility forecasts implicit in options prices using several techniques. They compared several volatility forecasting methods, divided into three categories: (1) forecasts using only expectations derived form options prices; (2) forecasts using only time-series modeling; (3) forecasts that combine market expectations and time-series modeling (a new method devised for this purpose). They find that the volatility forecasts produced by method 3 outperform the first two as well as the naive forecast based on historical volatility. This result holds both in and out of sample for almost all commodities considered.

Intelligent Electronic Trading for Commodity Exchanges.

Abstract: their preferences on those product dimensions. Since a single commodity market is made up of many heterogeneous goods that are close to each other but different in grade, quality and delivery conditions, preference satisfaction plays an important role in improving trade matches. In cotton markets, for instance, a cotton merchant may want to specify his preferences like \" I prefer early delivery, \" or \" I prefer cotton from a special region. \" IET provides extended standards and protocols for product descriptions so that traders can represent their utilities in terms of preferences as well as prices. The trade match algorithms of IET link commodity buy and sell orders in a way that 1. not only maximizes the total transaction volume based on an economic theory of price and quantity (economic auction model) 2. but also satisfies qualitative preferences based on a social choice model. We combine an economic auction model with a social choice model to develop the trade match algorithms. The economic auction model matches buyers and sellers in an economic way: it determines the optimal trade quantity between buyers and sellers, together with their optimal transaction prices in order to maximize the total exchanged volume in the market. The economic auction model employs a linear programming method to find this market equilibrium point. The economic auction model is in principle a mathematical approach using only price and quantity. The satisfaction of qualitative preferences requires a logical inference approach based on a social choice model. The social choice model assumes that The exchange of commodities has several chacteristics that can be summarized in three points. First, trades of commodity items like cotton or grain can be Commodity exchanges offer potential market structures for electronic trading. The Intelligent Electronic Trading (IET) system aims to provide advanced market functions with more advanced features than currently existing electronic market systems. IET is a combination of an economic auction model with a social choice model. It maximizes the total transaction volume while satisfying qualitative preferences of traders. Constraint Logic Programming is used as a new information technology to structure and implement the trade match algorithms of IET. or bid prices and to be matched with the most preferred trading partners in terms of product characteristics or delivery conditions. The IET system consists of communications technologies and a central processor (see Figure 1). Bids and offers for a commodity item are submitted by …

External shocks and stabilization mechanisms

Abstract: Latin America's economic debate focuses on international price movements of primary commodities. This explores how short-term effects of international commodity price fluctuations can be neutralized. It analyzes two potential stabilization mechanisms: stabilization funds and financial instruments.

Currency boards and currency convertibility

Abstract: Standard textbooks characterize the evolution of an economy toward a modern market economy in the following way. Initially resources are privately owned but there is no money, so trade takes the form of unorganized barter. That is extremely costly and inefficient because it requires a double coincidence of wants. The high transactions costs that result are a barrier to any trade taking place at all. To reduce transactions costs, economic agents attempt to organize barter. Marketplaces develop, with trading grounds divided into trading posts or stalls at which specified pairs of commodities can be traded. Typically, these markets will be open for trade on specified market days. Even such organized barter is very costly, however. For example, the pairwise trading of only 10 commodities requires 45 separate trading stalls. To further reduce costs, economic agents attempt indirect pairwise trading. That can be accomplished by establishing trading posts for all commodities except one, the exceptional commodity being distinguished from all others by the fact that it is tradeable at all posts. The exceptional, intermediary commodity is money. Money facilitates the development of a modern market system by lowering the costs of acquiring information and making transactions (Brunner and Meltzer 1971). Now, let us turn our attention from the textbooks to the former Soviet Union. At the very time when the former Soviet Union claims

The demand for commodity packages: The case of telephone custom calling features

Abstract: The demand for two custom calling services is investigated. The services may be bought individually or in a discounted package. A micro-theory based on discrete choice model is formulated that explicitly accounts for these purchase options. The model is estimated assuming both dependence and independence of the unobservable choice-influencing variables. The estimated parameters are used to simulate the revenue impact of price and discount changes. Copyright 1993 by MIT Press.

A short-run assessment of the effects of VAT on consumption patterns: the Greek experience

Abstract: The short-run effects of value-added tax (VAT) on individual commodity prices, the consumer price index, and the allocation patterns of total consumption expenditures among groups of commodities in Greece are evaluated. The methodological approach used is based on the static almost ideal demand system (AIDS), which was estimated and tested for thirteen commodity groups using time-series data (1958–86). The FIML approach was used for the estimation of the AIDS. The model was simulated for the post-VAT period. The principal results indicate that VAT has changed the structure of prices and demand, altered the pre-VAT allocation of total consumption expenditures among the groups of goods and services and raised the overall consumer price index.

Community or commodity? Sustainable development in mountain resorts.

Abstract: There are differences between environmental and business interests towards development in mountain resorts. Is a place a community or a commodity? A key reason for this difference lies in the beliefs and values of the group, their ethics. Ethics are both the source of the problem and of the solution as mountain resort communities at tempt to implement sustainable development. Frontier ethics versus sustainability, and anthropocentric versus ecocentric thinking all have different impacts on the environment and economic decisions. The concepts of sustainable development, growth, community, commodity, carrying capacity, and other terms are defined. Then follows a discussion of the “Three E's”: Ethics, Environment, and Economics, the criteria for sustainable development. They must be considered together for any strategy to be successful. Mountain resort communities have the history, demographics, scale and physical attributes that make them ideal laboratories for applying new solutions to the ongoing challeng...

Do commodities reproduce themselves through human beings? toward an ecology of goods

Abstract: The argument of this paper—'an ecology of goods'—could be summarized as follows: Goods exist only in relation to each other. Goods form groups, and in time higher organizational levels, groups of groups, i.e. networks of artifacts emerge. Mass consumption society is the most developed manifestation of this organizing process. The process of association and dissociation of goods is only partly controllable through human decisions. Human beings making decisions about buying, using and disposing of goods are constrained by the “logic” of the general organizing process. This process emerges out of different kinds interactions between commodities and feedback cycles with unintended consequences. In routinization and institutionalization processes commodity interactions become stabilized, i.e. the fidelity of replicative cycles increases. From this perspective, a system of commodities could be seen as an entity, which reproduces itself in a continuous resource exchange with its co‐actors and environmen...

Commodity Policy, Price Incentives, and the Growth in Per-Acre Yields

Abstract: We estimate the influence of policy-induced price changes and of technology supply on North Carolina flue-cured tobacco yields. The decline in land rent and effective output price that accompanied a 1965 policy change from acreage allotments to poundage quotas caused a 12 percent decrease in yields. Farmer yields were more responsive to yield-increasing technologies under acreage allotments than under poundage quotas. Annual yield growth was 0.5 percent under poundage quotas and 4.32 percent under acreage allotments. The growth rate decline is attributable to changes in relative prices and to a slowdown in the supply of available technologies.

Sequential models to determine intercity Commodity Transportation Demand

Abstract: The objective of this study is to determine the demand for commodity transportation using the conventional sequential modelling approach. In this study, the amounts of productions and consumptions of commodities at various locations were obtained from a commodity flow survey (shipper and consignee type) conducted by Alberta Transportation, Edmonton, in 1977 and 1978. Optimized gravity model for distribution and Log-linear and Logit models for modal split were developed from the above survey data. These models are discussed in this paper. The above three stages of modelling process yield the demand for commodities between origins and destinations in the province of Alberta. Demands for commodities (flows) are represented graphically in the form of commodity flow diagrams (CFD) between the population centres (origins and destinations). They also show the demand for commodities between origins and destinations by different modes, truck and rail. The CFDs for a few selected centres are shown to indicate the pattern of commodity flows across the province. They indicate that truck transport dominates the movement of all commodities. The modelling procedures and the results shown in this paper are applicable for transportation planning.

Asian trade barriers against primary and processed commodities

Abstract: Many developing countries are being encouraged to shift toward increased processing and exports of domestically produced natural resource based products now exported in primary form. But in many major markets, the structure of tariffs and nontariff barriers militate against such efforts. Zero or low tariffs are generally applied to industrial countries'imports of primary (unprocessed) commodities; duties increase, or"escalate", as the level of processing or fabrication increases. Tariff escalation produces a trade bias against processed goods. In the past, such trade barrier escalation has been attributed chiefly to industrial countries. The authors examined the structure of restrictions in Asian countries and found that most Asian countries'tariffs incorporated more escalation than do tariffs in industrial countries. Apparently tariff escalation is often reinforced by nontariff barriers on processed goods, although supporting data for this finding are less firm. This issue should be viewed as a North-South issue, contend the authors. A bias against imports of processed goods is built into trade barrier escalation among Asian countries and should be addressed in regional initiatives to liberalize intra-Asian trade barriers. The authors make three recommendations for dealing with escalation issues in multilateral negotiations: Japan, and to a lesser extent, the Republic of Korea are the keys to successful negotiations on these issues, as they have a far greater import bias against processed commodities than do all other countries with which the authors compare them. That is, Japanese and Korean trade barriers incorporate far more escalation than do trade barriers in other countries studied. Disproportionately high cuts in trade barriers for unprocessed commodities are not the solution, as they would increase effective protection for processed goodss. Any approach to trade liberalization should deal with both tariffs and nontariff barriers, to ensure that a reduction in one type of restriction is not offset by a further tightening in the other. Several Asian countries apply both types of restrictions to commodity imports.

Services, trade, and regional structural change in canada 1974 ‐ 1984

Abstract: Interest in the extent to which services are traded interregionally and internationally, as well as the role of services as a basic industry, has heightened over the past decade. Analysis of these questions has been hampered, however, by the fact that conventional data sources such as income and product accounts or employment records do not identify transactions between sectors or patterns of trade on a commodity basis. This study uses a series of commodity-by-industry input-output models for the Canadian provinces which do permit an analysis of interregional and international trade on a commodity basis. We are also able to identify the importance of commodity exports on a direct-plus-embodied basis as well as the more conventional direct basis. Our analysis indicates that service exports to the Rest of the World was the fastest growing demand category between 1974 and 1984, followed by exports to Other Provinces. We also conclude that the conventional method of identifying exports, on a direct basis only, understates the amount of services exported as well as the contribution of services to the regional growth process.

Dynamic Perspectives on Agricultural Policy Issues

Abstract: Among the innovators, Fred Waugh was one of the most prolific. He made pioneering contributions in linear programming, statistics and econometrics, demand analysis, the welfare effects of price risk, and the analysis and explanation of commodity cycles. As a research leader, mentor and teacher at the USDA, he left his mark on the work of later generations of researchers. I find myself no exception, as will become clear from what I have to say in this paper. Even though I never met him in person, my work has been influenced by what he wrote and by what his students wrote and taught. Among the many topics that interested Waugh were the dynamics of free market behavior and the implications for policy formation. In this paper I consider models of markets in which the dynamics run in two directions, forward from current conditions to expectations of future prices, and back from price expectations to current decisions. Both types of linkages can be crucial in competitive models of agricultural production, in which land has a prominent role as the quintessential fixed asset. A central challenge of market analysis from Waugh's time till now has been to infer from market observations whether markets are behav-

Commodity residual managing system

Abstract: PURPOSE:To make it unnecessary for a person in charge such as a clerk to periodically go around and monitor a commodity display rack and check the number of remaining commodities by automatically managing commodity states in the commodity display rack in working by a commodity residual managing system for recognizing the number of remaining commodities on commodity display rack in a volume sales shop or the like and properly replenishing commodities. CONSTITUTION:This system is including the commodity display rack 1, a commodity storage 2 and a POS terminal 3 also has a storage means 10 for storing the number of remaining commodities and a commodity management processing means 11 for subtracting the number of purchased commodities from the number of remaining commodities stored in the means 10 to find out the new number of remaining commodities, updating the storage value of the means 10, and when the number of remaining commodities is less than a prescribed value, commanding the replenishment of commodities. The POS terminal 3 informs the number of purchased commodities to the means 11 in each purchase of a commodity. The commodity storage 2 receives a commodity replenishing request from the means 11 and controls the execution of commodity replenishment to the rack 1.

The U.S.‐Canada Free Trade Agreement and Commodity Transportation Services among U.S. States

Abstract: The Free Trade Agreement (FTA) implemented beginning in 1989 by the United States aid Canada will have significant impacts on bilateral trading patterns. In addition to its long-term, investment-related repercussions, the FTA will affect the volume, commodity composition, and spatial distribution of trade and, consequently, the transportation services required to move commodities between the two nations. This paper examines the changing spatial structure of U.S.-Canadian trade under the FTA. It employs commodity-specific analyses of tariffs and non-tariff barriers, as well as price and income elasticities of demand, to estimate sectoral and special changes among U.S. states in total, land, water, and airborne commodity flows since 1988 attributable to the FTA. The analysis details the assumptions and methodology used, elaborates upon the likely consequences for me nation's ten largest customs districts, particularly New York, and concludes with some comments on other forces that may alter the expected results.

Ethics and behavior on the Russian commodity exchange

Abstract: With tumultuous changes occurring in the former Soviet Union, a unique opportunity exists to examine the implications of unethical behavior in what is,de facto, a totally unregulated market. Recent legalization of commodity trading in Moscow carried with it no legal structure to ensure swift compliance with contract terms. This paper demonstrates that in the absence of legal remedies, a free marketplace appropriately punishes unethical conduct.

A new regional price index for Cote d'Ivoire using data from the international comparisons project

Abstract: The authors report on an exercise in economic statistics. They develop a regional price index for Cote d'Ivoire building on the strengths of two independent data sources: the Cote d'Ivoire Living Standards Survey (CILSS) and the International Comparisons Project (ICP). The CILSS collected detailed information on household incomes, spending, employment, and so on, but its coverage of prices left much to be desired. The ICP collected a wealth of information on prices across the country, but collected no information on household spending patterns or other socioeconomic data. The authors bring together these two sources to produce a regional price index that they argue is superior to previous estimates based solely on the Living Standards Survey. The procedures they follow should be of interest to practitioners faced with similar data shortcomings, particularly when working on Africa. They show this to be no mere statistical exercise. Using the new price index can have a significant effect on earlier evaluations of poverty in Cote d'Ivoire. They also use the new price information to construct disaggregated indices by commodity category and by poverty group.

Information Technology and Economic Development in the Asia-Pacific

Abstract: This paper analyses the contribution of information both as a commodity and a resource lor economic growth and the accumulation of capital. It examines the nature of the technology that facilitates information flows across national boundaries and explores the contribution of infrastructure in IT in the NIEs of Asia, and the near NIEs of the ASEAN region to their economic prosperity. Various responses to telecommunications policies are dealt with in order to show the wide variety in regulatory, legal and socio-economic conditions in countries. It also examines the international framework within which these developments are currently taking place. The conclusion deals with the future trends in the region for investment and growth of the IT sector.