Inflation has a positive relationship with prices, both on the supply side (through the cost of production) and on the demand side (on the prices of substitutes for primary commodities
This could be a significant contribution to Africa's growth because it builds on China's own experience of building special economic zones where manufacturing production can take hold, and if that happens in Africa it could be really important as a source of jobs and as a source of economic growth beyond exporting primary commodities
. With wages in China rising very rapidly right now, actually making some Chinese firms globally uncompetitive, African manufacturing hubs are attractive.
Palm oil is one of a few primary commodities
that have good prospects with demand for which is expected to continue to grow.
If this is not the case, then there is no assurance that poor agents will receive either a fair price for their primary commodities
or a fair return on their savings.
This underlines the need to diversify, not just out of primary commodities
but also from low-technology sub-sectors.
This indicates that increased prices for primary commodities
could be passed along as higher product prices in upper stream industries, but industries further down the production stream were reluctant to boost prices due to competition from inexpensive imported products.
It also wants:- A ban on rich countries subsidising their agricultural exports, which would cut over-production- Action to stabilise prices for primary commodities
at higher levels and to pay more to small farmers- Fairer patent rules that ensure poor countries can afford new technologies and basic medicines and seeds- Better employment, health and education standards, especially for women- National and regional policies in developing countries that help poor people access markets and benefit from trade...JJ:(LC)
The CFC is an intergovernmental financial institution established by the U.N that assists developing countries dependent on production of primary commodities
. The two new projects, designed to improve the business capacity of small producers and exporters in Mexico anti Nicaragua, and to rehabilitate neglected coffee farms in Angola, have a total value of US $5.3 million and US$8.5 million respectively.
The paper recommends that African countries move away from specialization in the export of primary commodities
towards specialization in the production of knowledge intensive goods using skilled and educated labor services.
"This resulted in a worsening of the current account of the balance of payments for those countries which rely largely on the export of primary commodities
such as bananas and sugar," he said;
Conspicuous among primary commodities
that have suffered steep price declines is crude oil, which gave up an average 30% of its value during the 12-month period, it said.
Archer says processed food and beverage trade is increasing twice as fast as trade in primary commodities
and by next year is expected to account for nearly 75 percent of global agrifood trade.