AIECE working group reports - spring 1997; le commerce mondial en 1996-1998 - world commodity prices 1996-1998
The first report is by the Centre d'Observation Économique de la Chambre de Commerce et d'Industrie de Paris, on behalf of the Working Group on Foreign Trade, the second is by the Kiel Institute of World Economics, on behalf of the Working Group on Commodity Prices.
The Trade Group observes that world trade growth, in volume terms, was just under 6% last year, 2 percentage points less than in 1995. But this lower figure hides a recovery during the year, mainly based on the acceleration of intra-European trade. Stronger activity in Europe will be one of the main factors behind the dynamism of world trade in 1997-1998, with growth reaching 7% in both years. Moreover, exchange rates movements (appreciation of the dollar against the European currencies and the yen, appreciation of the lira and of the British pound against other European currencies) affected import and export prices last year. This should lead to a redistribution of market shares between the main competitors. One striking feature of the forecasting exercise is that international trade prices would be almost stable, which underlines the absence of inflationary pressures at world level. This phenomenon can largely be explained by the keen international competition and the openness to international trade. Added to the report are two special notes, one by KOPINT Budapest assessing recent trade trends of the various Eastern European countries, and one by CPB focusing on the export performance of Hungary, Poland and the Czech Republic since 1991.
The Commodity Prices Group deals in particular with the raw material markets. World commodity prices increased in 1996 on aggregate by 7%. However, taking yearly averages, this was the result of heterogeneous developments: increasing oil prices, which have a dominant weight, and falling prices for industrial raw materials and food and beverages. Forecasts for 1997 and 1998 point in the opposite direction: oil prices are expected to fall slightly whereas industrial raw material prices are likely to increase, a process which already began at the end of 1996 and will level off through 1998. Prices for food and beverages will decline slightly after a pronounced increase during the first months of 1997.
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