Nobody downloaded yet

Commodity Trade - Essay Example

Comments (0) Cite this document
Summary
Name Institution Instructor Course Date Commodity trade Introduction (objectives of international commodity trade organizations) International commodity agreements cartels became common in early 1930s immediately after the great economic depression. International commodity trade organizations are state agreements to have a special class of trade and promote international cooperation in a commodity of interest…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.3% of users find it useful
Commodity Trade Essay
Read TextPreview

Extract of sample "Commodity Trade"

Download file to see previous pages The agreement aims at covering the bulk of the world trade in the commodity concerned and seeks to ensure corporative nature of the association. The associations also aim at safeguarding through participation, the interest of the producers and the consumers and insert provision that cater for all other entities (21). Any organization aims at implementing its provisions by carrying out specific functions that establish and strengthen their international accord. Challenges faced by the organizations International commodity agreements have been difficult to run and administer due to the current global economic crisis. There has been difficulties in the arranging and administering agreements partly due to technological problems surrounding the production and trading of products(27). The organizations have been facing the problem of conflicting interest between the importers and exporters where the importers want low quality products but of high prices. On the non-competitive imports, the importers require commodities of low prices and their respective quantity determined by demand. The international distribution of products is directly affected by government policy and the manner of trade restrictions within national bounds. Commodities transferred from the rich to the poor countries have an impact of accelerated economic impact. Large capitals are required to fulfill growth targets for the organizations and their payments are from the exchange earnings (29). For commodities that are largely produced in poor countries but consumed at the rich countries the agreement price set might be above the market levels or inelastic. These incidences give the market organizations to make negotiations with the producers who end up incurring losses or failing to strike a deal (31). The international trade organization having been facing another major challenge in the price stabilization, meant to implement support purchases. Theoretically, prices are set by the long term interlink of the supply and demand to bring the equilibrium price and commodity. However, stabilization effect is not achieved in buffer stocks without heavy financial commitment (37). Failure to obey these, upward price fluctuations or heavy accumulation of inventories and burdensome will ultimately result. Currently (in order to reduce the risk of market volatile global markets) the international commodity trades are giving loans to the less developed countries. These loans are available to countries that have an annual shortage in annual shortage in the foreign exchange earnings due to commodity price declines. These loans are for compensatory effect to these countries (41). The compensatory financial scheme is operated strictly as a program to offset short-term market instability and global volatility. The recipient countries are to repay within five years. In order to curb the risk of volatility in the global market the terms of finances should be liberalized and the repayment made contingent upon recovery of the exports of a certain country (43). This makes the loan doable in all season unlike now where it can be taken only if the trading prices are high enough. ICC INCOTERMS Inco terms are international rules that are accepted rules accepted by governments, legal authorities, as well as practitioners ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Commodity Trade Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Commodity Trade Essay Example | Topics and Well Written Essays - 1500 words. Retrieved from https://studentshare.org/business/1449488-commodity-trade
(Commodity Trade Essay Example | Topics and Well Written Essays - 1500 Words)
Commodity Trade Essay Example | Topics and Well Written Essays - 1500 Words. https://studentshare.org/business/1449488-commodity-trade.
“Commodity Trade Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/business/1449488-commodity-trade.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Commodity Trade Essay

Commodity Trade

...Commodity Trade Contents: Serial No. Topic Page No Introduction 3 1. Aim of the Study 4 2. Objectives 4 2. China Imports and Exports:An Overview 4 3. China Trade: Grains as the Commodity 6 3.1. Domestic Grain Policy in China 7 3.2. China’s Grain Trade and its Impacts 8 4. International Prices and the Related Issues 9 4.1. Impact of the Price Hikes 10 4.2. China’s Grain Trade and WTO 12 5. Conclusion 13 References 14 List of Tables: Serial No. Topic Page No. Table 1. Increase in prices from January 2007 to their peaks 10 List of Figures: Serial No. Topic Page No. Figure 1. China Imports and its Trends from year 1980-2007 5 Figure 2. China...
11 Pages(2750 words)Essay

Commodity Trade Questions

...as import prices are going to go down. With GAFTA in effect, regional development is going to be noticed drastically. Question 2 How to reduce the risk for global commodity trader Since there is high profit expected in any global commodity trade, the risks are also high. According to (Williams, 1999), when one is involved in commodity trading, he is bound to lose more cash than what he takes to the bank. Always have a strategy to control some risks. If you have a valid risk plan, it will warn you when to indulge in the risk or run away. A global commodity trader should interpret all the risks involved in a business deal so that he does...
6 Pages(1500 words)Essay

Commodity Trade Questions

...? Commodity trade2 Question one-Objectives of the international commodity trade association FOSFA FOSFA is a unique, professional, contractual, and arbitral trade association. It promotes world trade of oil seeds, edible groundnuts, and fats. Its main objectives are • To represent the interests of its members to the government departments, authorities, and international and national organizations, • To monitor and take action on the procedures concerning national and international legislation, which are likely to have impacts on the fats and oils trades thus affecting contract terms, • To ensure there is a regular newsletter to keep...
6 Pages(1500 words)Essay

Commodity

...? Oil With the rapid growth of industrialization all around the world, crude oil can be considered as one of the most important elements in this industrial growth. One can very easily say that it is a very hot topic nowadays. Starting from the very common point of demand and supply of oil in the whole world to the price ups and downs, a lot of interesting scenarios comes out. It goes on with some interesting discussions which create a lot of sense in understanding the global market of oil. Supply of oil in international market The basic oil supplying nations of the world comes within the group called OPEC (Organization of the Petroleum Exporting Countries). The most important oil producing nation in the whole world is Saudi Arabia...
3 Pages(750 words)Essay

Critical Assessment Of The Future Of Coffee As A Commodity Trade

...Critical Assessment Of The Future Of Coffee As A Commodity Trade The "invisible hand" in Economics according to Adam Smith (1776) plays a very concrete role when it comes to finding balance between supply and demand. In the case of coffee as a commodity in a global market, this needed balance hasn't been accomplished in the last years. Factors like prices and market share have produced an overall imbalance between the supply and the demand of coffee and its trade as a commodity has been deeply affected threatening to produce more poverty on Least Developed Countries (LDCs) and developing countries alike. This issue has been addressed by a diverse array...
8 Pages(2000 words)Essay

Commodity fetishism

...COMMODITY FETISHISM Introduction One of Karl Marx’s most compelling insights is his concept of commodity fetishism. It refers to the problem of interpreting in appropriate social terms the real though superficial relationships in the market place. This is because of the advent of the money economy which reduces bonds and relationships constituting traditional communities, “so that money becomes the real community” (Harvey, 1989: 100). Thus, impersonal and objective relations with others, replaces personal relationships. According to Mike Wayne (2003), commodity fetishism generates the phenomena of splitting, inversion, immanence and repression. Significantly, these dynamics form...
6 Pages(1500 words)Essay

Commodity

...Milk Performance in the Market 2007 Milk, together with the dairy product that is produced from it, is a source of food for a large number of people in the world. Milk from numerous animals, especially cows, has for a long time been considered a regular stable food for many cultures worldwide. It provides dairy products such as yogurt, cheese, kefir, and butter, and is a source of vitamin D, proteins, and calcium. However, not many people have wondered how it performs in the markets before it reaches to the consumer. This newsletter will look at its performance in the markets from 2007 to 2012, and will examine its inflation rate, rates of change, as well as its MCSI commodity index (Catlette & Hadden, 261) Since 2007,...
2 Pages(500 words)Essay

While the Budget factored in a decline in Australias terms of trade, the fall in global commodity prices over recent months has been larger than anticipated

...detracted around 75%of a percentage point from Australia’s economic growth in 2010-11, the real GDP contracted in the March quarter of that year. While it take many years for the affected communities to recover from these tragic events, the negative impacts on Australia’s economic growth was great, with the resumption of activity and commencement of reconstruction that added to real GDP growth from 2011-12. There have been major changes in term of both structure and trend in Australian trade. Structural change has been going on from as far as 19th centuries and it is not new to anyone. It is one of the ongoing features of Australian economies. In the past years one of the most common changes is that of the service...
6 Pages(1500 words)Essay

While the Budget factored in a decline in Australias terms of trade, the fall in global commodity prices over recent months has been larger than anticipated

...While the Budget factored in a decline in Australia’s terms of trade, the fall in global commodity prices over recent months has been larger than anticipated Contents Introduction 3 Question a 3 Question b 4 Question c 6 Conclusion 7 Reference 9 Introduction In the recent years the country of Australia enjoyed a firm and strong terms of trade yet volatile. It contributed in raising the level of real income which in turn stabilized the macroeconomic factors and reduced the persisting rate of inflation in the economy. The conjuncture got the support of dynamic and flexible private sector within the ever changing environment subjected to macroeconomic reform. The terms of...
6 Pages(1500 words)Essay

The organization of financial (debt, equity, foreign exchange, derivative) and commodity markets and their role in international trade and economic performance

...The organization of financial (debt, equity, foreign exchange, derivative) and commodity markets and their role in international trade and economic performance Financial markets and commodity markets play a wide variety of roles in the international economic performance. They are developed in order to serve the three major roles to the individual households, firms and governments such as liquidity, information sharing and risk sharing (Baker and Martin, 2011). Under financial markets, four broader categories highly dominate which are bond, stocks, foreign exchange, and derivative markets. The following discussion briefly describes aforementioned types of financial markets. Bond Market Bonds are the debt instruments issued... such that it...
1 Pages(250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Commodity Trade Essay for FREE!

Contact Us