Index Numbers of World Market Prices of Foodstuffs and Industrial Raw Materials 1966
1967
I
Index and commodity group October
January
April
July
9O.g 83.9 94,2
H W W A - I n d e x t (1O52--1968 = 100)
92.6
92.3
91.8
Foodstuffs
83.7
83.7
86,0
Raw materials other than foodstuffs . . ,
96.8
96.4
Fuels
95.5
95.2
R a w materials for consumer goods.,
91.2
92.5
102.3
100.2
94.5 95.0 91.6 96.1 429,8 360,6
R a w materials for capital goods
Reeter's Index (18. 9. 1931 = t001
429. t
425.8
Moody's Index (31. 12. 1931 = tOO| . . . .
371.1
370.7
October
Nov. 3
Nov. 17
92.2
93,1
93.7
86.8
87.9
88.2
94.8
95.6
96.4
95,1
96.2
96.2
96.6
go.7
89.2
88.9
88.3
95,8 428.3 372.6
97.2
99.6
101.7
426.6
432.1
445.1
360.4
362.4
363.1
I
Index complied by the Hamburg Institute for International Economics,
year. A n e n h a n c e d u p w a r d t r e n d of prices is n o t y e t to b e anticipated. Thus in 1968 c o n s u m p t i o n in real t e r m s will e x p a n d s l i g h t l y also in the F e d e r a l Republic ( + 0.5 p e r cent) a n d n o t i c e a b l y more so in Britain ( + 2.5 p e r cent} t h a n in
1967. A h i g h e r i n c r e a s e is to b e e x p e c t e d in F r a n c e ( + 4 p e r cent), w h i l e in I t a l y {+ 6 p e r cent) it will b e t h e h i g h e s t o n e again. In W e s t e r n Europe as a w h o l e p r i v a t e c o n s u m p t i o n should grow b y a b o u t 3 p e r cent in real terms.
Raw Material Markets Further Decline of Rubber Prices
The M i d d l e East w a r e n t a i l e d a r e l a t i v e l y s t a b l e p r i c e t e n d e n c y in the i n t e r n a t i o n a l r u b b e r m a r k e t . In August, h o w e v e r , a n e w depression of prices set in again, which w a s o n l y t e m p o r a r i l y stopped b y a Malaysian price supporting measure. A t present, prices at the London a n d N e w York e x c h a n g e s w i t h 14 5/8 d/lb a n d 18.2 c/Ib, respectively, for t h e s t a n d a r d q u a l i t y h a v e reached the l o w e s t level since the war. A f u r t h e r rise in world production a n d t h e decline of c o n s u m p tion, l a s t i n g u n t i l r e c e n t l y , m u s t b e b l a m e d for t h e p r i c e p r e s s u r e in t h e n a t u r a l r u b b e r m a r k e t . But different special influences, which under normal circumstances would h a v e caused a n u p w a r d t r e n d of prices, h a d no effect. So, t h e cut of the A m e r i c a n stockpile sales from 120,000 lgt to 70,000 Igt p e r annum,
t h e t e r m i n a t i o n of t h e strikes in t h e five b i g g e s t US t y r e firms a n d in the a u t o m o t i v e i n d u s t r y as well as the w a r in Nigeria, w h e r e after all 70,000 lgt r u b b e r come from p e r annum, h a d no i n f l u e n c e o n t h e p r i c e d e v e l o p m e n t in t h e rubber market. Also the a t t e m p t of t h e M a l a y sian g o v e r n m e n t to m a i n t a i n rubber prices b y b u y i n g up h a d no c o n s t a n t success, as this m e a s u r e w a s not s u p p o r t e d b y o t h e r p r o d u c e r countries. So e.g. I n d o n e s i a delivered considerable quantities to K u a l a Lumpur a n d Singapore, which t h e n - - a p a r t from t h e o w n p r o d u c t i o n - - w o u l d h a v e h a d to b e b o u g h t up, too. For 1967, a n i n c r e a s e in production of n a t u r a l r u b b e r b y stightIy m o r e t h a n 4 p e r c e n t to app r o x i m a t e l y 2.5 million lgt is anticipated. The c o n s u m p t i o n rise of
3 p e r cent, as c o m p a r e d w i t h t h e p r e c e d i n g year, as w a s f o r m e r l y estimated by the International R u b b e r S t u d y Group, will, however, n o t b e reached. A d e c l i n e in c o n s u m p t i o n b y p r o b a b l y 1 to 2 p e r cent to 2.49 million lgt m u s t r a t h e r b e e x p e c t e d , so t h a t - - c o n s i d e r i n g 70,000 lgt stockpile rel e a s e s - - t h e r e will b e a statistical o v e r s u p p l y of a p p r o x i m a t e l y 80,000 lgt. As a r e s u l t of this c o n t r a r y d e v e l o p m e n t of p r o d u c t i o n a n d c o n s u m p t i o n , p a r t i c u l a r l y in t h e p r o d u c e r countries, a s t r o n g g r o w t h of stocks h a s set in. In c o n n e c t i o n w i t h t h e cyclical u p s w i n g in t h e W e s t e r n i n d u s t r i a l nations, r u b b e r c o n s u m p t i o n will rise a g a i n d u r i n g t h e n e x t m o n t h s . But h i g h e r r u b b e r prices c a n n o t be a n t i c i p a t e d in t h e n e a r future, a b o v e all as M a l a y s i a will m a k e efforts to get rid of t h e stocks h a v ing accumulated by backings. M o r e o v e r , e s p e c i a l l y I n d o n e s i a is s u p p o s e d to i n t e n s i f y its p r o d u c tion, in o r d e r to t u r n t h e restriction of p r o d u c t i o n d e c r e e d b y M a l a y s i a to its a d v a n t a g e . O t h e r i m p o r t a n t p r o d u c e r countries, h o w ever, a g r e e w i t h h4alaysia t h a t prices in t h e n a t u r a l r u b b e r mark e t m u s t b e stabilised b y m e a n s of a n international regulation agreement.
I N T E I( E C O N O M I C S 9 Monthly Review of International Trade and Development Edited by The Hamburg Institute for International Economics {Hamburgisches We[t-Wirtschafts-Archiv), Director: Prof. Dr. Heinz-Dietrich Ortlieb, and The German Overseas Institute (Deutsches Obersee-lnstitut), President: Prof. Dr. Dr. h. c. Andreas Pred6hl. Managing Editor: Dietrich Kebschull, Editor: Hubert H6ping; KorI-Muck-Platz 1, Hamburg 36, published by Verlag Weltarchiv GmbH., Eppendorfer Landstrafie 106, 2 Hamburg 20. Advertising Representative: Dr. Hans Klemen. Printed by Otto Schwitzke, 2 Hamburg 70. Annual rate of subscription DM 48,-- (US-$ 12,--). Copyright by Verlog Weliarch~v GmbH. 336
I N T E R E C O N O M I C S , No. 12, 1967
