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December 19, 2016
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May 23, 2006
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January 31, 1974
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STAT Approved For Release 2006/09/26 :CIA-RDP85T00875R001900010149-3 Approved For f g.2 f9/ RD~ T00875R00I900604 f 3 ::0=et ru:.: ::r. Sic:::ay ~a?~luwoff Council on International Econo::is Policy Executive Office Building SUBJECT Cor odity Price Trends In response to our conversation of 31 January, we are forwarding the attached table on world co ^odity price trunds. The taihle includes average annual prices for selected co:?=odities as well as factors which will affect prices in 1974. Estimates of 1974 price trends are still very tentative, thus the table will he updated periodically as new infor:aation beconos available. Z;c would be happy to provide additional in`ormation if required. Attachment: As stated Distribution: Original, & 1 1 1 1 1 (5-5883) - Addressee - D/OER - D/I - SA/ER - St/p/c Approved For Release 2006/09/26 CIA-RDP85T00875R001900010149-3 Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010149-3 CO!?L'IODITY PRICE TRENDS Commodity Price Unit 1972 Dec 1973 1973 Bauxite $ per metric ton 8-12 8-12 8-12 Tin $ per 100 lbs 171 285 217 Copper $ per 100 lbs 49 104 81 Rubber $ per metric ton 402 1136 6>3 Timber $ per cubic meter 31 47 56 Wheat $ per bushel 2 5 4 Sugar $ per 100 lbs 9 11 10 Rice $ per 100 lbs 10 30 18 Palm Oil $ per metric ton 216 486 345 Copra $ per metric ton 141 421 314 Peanuts $ per metric ton 260 523 394 Cocoa $ per 100 lbs 32 66 S4 Coffee $ per 100 lbs 51 71 67 Cotton $ per 100 lbs 34 79 56 a/ Change from average 1973 prices. CIA/OER 31 January 191A 1974x/ up slightly up sharply down slightly down slightly down sharply up sharply firm up sharply down slightly down slightly up sharply down sharply up slightly up slightly Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010149-3 h' 'Commodity Major Exporters . Price Unit Cotton Turkey $ per 100 Brazil lbs Egypt Mexico United States [ICSR Average Prices 197 Appmved aEl l -t l- ese ,6/09 JA-RD 08758001900010149-3 25.10 34.30 34.70 79.30 56.06 65-75 Both supply and demand will inc.rea$ in 1974. Although some farmland has been shifted from cotton because of higher prices for other crops, sharply increased yields will result in a production increas for the 1973-74 crop (Aug-July). Because of fashion's shift to natural fibers and because of the shortage and high prices of oetrolem based man-made fibers, demand will remain strong. Stock piling may ease somewhat, although higher quality cotton is in relatively short supply. Bauxite Australia $ per 4.8-12 8-12 8-12 8-12 B-12 10-14 Jamaica metric . Guinea ton Guyana - Surinam There is no free market price for bauxite. Most sales are under long term contracts for which prices hap not been adjusted in recent years. A meeting of bauxite producing countries in February will result in pressure for higher prices, greater control over production facilities, and more processing within the bauxit:- producing countries. Because prices are not market related,. future price trends are difficult to estimate. Approved For R 1 axe' 2006/09/26 : CIA-RDP85TOOZ75R001900010149-3 Co:c-odit Major Exporters Price Unit GU2L'lUDiTY PK1Ci TULUDS Average Prices Apps yed f r Rase :CIA-R~b0875R001900010149-3 Bolivia 100 lbs Thailand Indonesia Prices for 1974 are expected to. remain firm. Thailand has had considerable labor problems in the tin mines and some gravel pumps have closed because of fuel short- ages. Some gravel pumps in Malaysia may also close. The UK's Williams Harvey smelter is still down and no alternate plant'has been able to .take up the slack. A world wide economic downturn may ease demand- in non-canning uses of tin, particularly automobiles and housing, but even this will not. be enough to cause any sizeable drop in prices particularly because prices are largely controlled by the International Tin Council. Copper Zambia $ per 64.17 48.56 50.72 104.09 81.02 85-110 Supply situation is tiout and no Chile 100 lbs major production increases are Canada expected in 1974. A small increase. '? Zaire in Chilean production and GSA stockpile releases will keep prices from soaring even higher. arices should soften as a result of worldwide economic downturn this year and resulting.reduced demand but they are not expected to drop below the 1973 average. An important factor influencing prices in 1974 will be whether the US industry can avoid a strike this. summer. / Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010149-3 Average Prices Corrodity Major Exporters Price Unit 1973 1970 Aped - Re'1' se Rubber Malaysia Indonesia Thailand $ per ton 462.5 402.1 506.3 1135.6 - Remarks kb/09A.61. iq1A-RDP85TOO875ROO1900010149-3 683.0 660-700 Prices will ease considerably from current high levels during 1974 but will still be substantially above prices in recent years. Demand will ease-because of downturn in automobile and road building equip- ment industries. This will be balanced by tight supply of .5 Timber (Hard i wood) Indonesia Malaysia Philippines $ per "? cubic ?. meter (Japanese import prices) 31.86 30.81 33.44 47.00 56.25 46 Wheat United States Canada Australia Argentina $ per bushel 1.48 1.84 2.71 5.32 3.58 5-7 synthetic rubber because of feed- stock shortages. Easing of demand because of down- turn in housing construction in Europe, US, and Japan will bring tir~er prices down in 1974. Sub- stantial increases in Indonesian production will ensure an abundant supply. Prices probably will continue to increase at least until the new crop comes in at mid-year. Austral ian crop is lower than anticipated and very little will be available to cover any US shortfall. Canada withheld its crop from the market in late 1973 and since then has refused to negotiate its high prices. US is attempting to delay or?stagger deliveries, and wheat prices will reflect the success of this attempt.' Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010149-3 CorTodity Major Exporters Price Unit Rice Th Burma ailand $ per --- Unite 100 Egypt are not quoting prices, however, ar! are negotiating on individual basis to take advantage of nigh prices. Because of the continued uncertain- ty, prices have remained high. World stocks are extremely low and demand will remain strong as stocks are rebuilt. Prices are unlikely to drop significantly, especially in view of tight supplies of other grains. Palm Malaysia $ per 256? 216 214 486 345 275-350 Predictions of oilseed prices for Oil Indonesia metric' coming year are very tentative. A ton meeting of major oilseed producers in Rome scheduled for mid-February will clarify supply situation which for the moment is extremely uncer- tain. Prices of palm oil have been unusually strong because of a drought in Malaysia, but drought is now over and production will recover. Prices will decline with improved world supply of all oil- seeds. Copra Philippines $ per 204 141 Sri Lanka metric Papua New ton Guinea Indonesia 174 421 314 275-325 Demand will remain strong through (Nov) 1974. Supplies will hit a low in March but are expected to recover by the third quarter when the new crop will be harvested. Prices are likely to fall as world supplies of oil seeds in general increase. Approved For Release 2006/09/26 : CIA-RDP85TOO875ROO1900010149-3 Average Prices 1973 Remarks 197oApp ed Rek4se 2 $/O91 .RDP85TOO875ROO1900O10149-3 8.60 9.75 12.80 22.85 18.11 24-29 Rice prices in 1974 were expected ~__i_.._ i.. .... .... 25% from the current peak level, because the ref ently i rta t Thai cro mpo n p Average Prices 1973 Remarks Apl 972 ed rar R eC se 2'117 (7M/091 4 E 1A-RDP85T00875ROO1900010149-3 Sudan Nigeria Brazil .tiger United States Ghana $ per ...34.17 32.26 37.14 65.69 64.38 50-55 Nigeria Brazil 100 lbs. Coffee Brazil $ per 53.94 50.74 57.31 71.47 66.56 70-75 Colubnbia Ivory Coast 100 lbs prices may occur in response to increased supplies of feed and other oil seeds which serve as substitutes. The price slippage will be moderated however, because African producers have embargoed peanut exports with a view toward increasing production and sales of peanut products. Moreover, because of drought, Nigeria had a severe crop shortfall, and normal product- ion levels are unlikely for several years. World peanut stocks remain relatively low. Average prices should decline some 20% in 1974. Demand will taper off both because of currently high prices and reduced grindings due to energy shortages. World pro- duction will increase by at least 6% this year. Brazilian crop suffered considerabb frost damage last year resulting in soaring prices. Production will recover this year but probably not enough to meet demand. The new crop harvested between April and June, will stabilize prices some- what but is unlikely to cause any significant drop in prices. Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010149-3 Average Prices _ Coriodity Major Exporters Price- U: 1973 1970 Aped ft r Ruse 6/09! ~ Su