Working Papw No. 247 Isaac - Centre For Development Studies

Working Papw No. 247
R E G I O W L TERMS: OF TRADE FCP? THE STCITE OF K E R M
Th-s
Isaac
Ram Manahar Reddy
Nata b v v u r y
T.N.
C e n t r e fw W v e l o p m t Studies
Thiruvansnthapwam
b.rch 1 W
The
mwement
terms
u-F
pins frm trade given a
wialisation.
s
half
IUondery sectors t o other stetes c w
a v a r i e t y of
in
industries.
end gracessing
It
of its primary end
uutprrt
gross
the
of reqional
path
rpecialises
economy
commwcial c r w s
then
Alwe
chasen
histurically
Kwala
rprt oriented
W
trade m l d determine the real
of
abroad.
The proportion
of
the
s t a t e m e t through imports
wld twrk cntt to be of a hiqtier v a t i o .
Thwb+we, the movement
expenditure
consumptim
t4
rmmditv
in
b e an impartant determinant a+
t e r m s a+ trade -1u
the real i n c o w gvcwth a+
r r ~ i a l role?
that
the
reqiona'r
trade
of
tm(h55
Despite the
ecormmy.
in
play
the
regional
dwelopmt, t h e p r e s e ~ ~etx e r c i s e is t h e firrt & 3 t s kind
The simplest
and the
rnost direct maslure & t
isthe r a t i o between t h e p r i c e
rndex
exports
04
t o be
w of~ trade
to
Id% of
imports contmonly known as rret barter terms
W rimply
as ~ ~ ~ t m d t iwt my s of trade.
N = P
A where
the Wic2
0.f:
trade CN3
Px
Pm
mlPm
are pu-ic6 brrdices of e x ~ o r t sand imports respectivelv.
dw rn cwnradity terms
OC
of the
vchasing power
trade
e x p o r t s of
implies
an
t h e ~eqicm.
rwl
of t r a d e .
incam w i t h output
urns of
incame w i t h
trade
t h e other
growth -Id
Thus tt;e real
hmd, t h e
be lower
increase i n
i f the
Cwms
d
C I t the t w o e x t r e m e s are the case of increase
badcdetwiwate.
h real
On
in the
improvement in t h e
kume m ~ X dr i s e f a s t w than output w i t h the
madity terms
increase
(1
and
'W where the real
an 'unchanqed outnut due
to i mprovemmt i n
the, m w e well k n m n case of idn!IM!sserising
income
is
lower
than
before
the output
g r w t h dse t~ adverse
;Idr d i s c u s s i ~ n
is centered arttufkd the n e t barter
ti-ade, artd h w e a f t s r , it is t h i s
r e c a l l the ather related concepts uf
k e p t in
p r ~itabiy
f
Gs
drawn C r w t h e t r e n d s
.thus
. fw
mind as
trad~
09 t h e
a
consider t h e
c5anges in
r e s p o n s e to
terms ~ i :trade which cad4
to
lt
xmpor-t
the q ~ 2 n t i t . y
flfeink
06 irads.
i ~ ~ v a eoft the t a m ef
te necessary h
wuld
exports.
tGhc.3
J e c l i r i e i n t h e e x p o r t prices t h e e i p w t s
3
t11an pr~*cjr?.lcm3.i;e2.y,t!te
'
capacity ta i % p w t
+ar m l r f 9e urtlhwairec~. TTrris F.r:cs proow.
tc?
caaparity
to the cmclirsirrn
a corrective
m a l y s e -ths
examlcl, to
it may be useful t~
St i Ill
barter term
zn
ircc=jart
Sytabali c ~P ly , 1
-
N. ;2x.
rsaul~
be
Income
tbased
'
index of
terms
H e ~ s ? v w i 11 the? case of
substznliaL r w i i t t n n ~ e in+ io.-
~ K M
d
w e ref@?-t o bdm
concept, thst
of t r a d e ' i s used,
't e r m s
the phrase
C+
anvemml of the lerffis of trade.
rise aU@
on ettprtsl
e~portb d
trade.
of
mala,
c i g a c i t y to
tfl
with vay
+ram a t s i d e , the export
w ~ u l dZ;.u a pam iaciitaz'm- 9.F +:[-retotal
14 in
evniw
import qd%
f t-ofi> outs>tie.
artni;c-r':
ry,
imp: 5 cati m a
been
a
c?i
shmiZe
be
cautious
srry adverse rnuvenent
u+ t w m s of trade if it hrr
a+ t r a d e CS3 is employed to correct th,
c a m o d i t y terms of trade ior. such changee
r-
drawing mlfm
cansequence at prad!itti v i t y chziiqes in the e x p o r t sect*,
m e rriingle-fac2;wai t.-rrr!e,
S
in
N.Zx
w h e r e Zx
1s
:-l.:st
in productivity.
exacvt productivity indstt. 8 is lihh
tu irmcrrre e v e n wheri (u' is d e i w l o v a t i n q as i t is -re
I
likely tkrt
n r t d that a sigr:iflcent,
massed
to t h e
-1
But i t m y be
rise i t i t h develpp-t.
t e n d to
p r s r l u c t i v i t y -aid
shape crC
the p r d ~ c t i v i t y it?cresre is
through 1-r
ISC~T~SU~RWS
abroad
e x p a r t orices.
It has best! t?w! cm+:enLiwt of Prebisch that opposite is
-
wlth
prokrcws
kcaurrr
@+
of
manufactures
of
the
mmctpolies
to raise
an to
a cwnerstone o.C his +rlucibls a r q u m t s
has been
productivity
cronsldsratiwr
into
take
to
s+ the
the
crtoru
tt'mbs
index o+
Zn
The boubie-*tot-e&l
,batweeft
imports.
1
3.
ar?d r e g i o n s .
countries
nmtclrd. that es regards d i r e c t weiiare
what 'is mre i ~ i u r t a n t is the
Lhe
if)
a. her-c Z*
D
of
eg*inst
also. This a s ae+sweil b u t h e
importables
d . ~ b l W a c t w a Xt e r m s of trade E 3 3 ,
inmurlity
the
0.F
t6a rmpcwters.
in Suppwt o+ a e c 4 a r *-endency of term of trade to
inrpwtant
the wag-
to hold the urices, v e r y l i t t l e
fruits of productivity increase are passed
7)rts rssytaekry
cor?ntrlws.
develged
the
trade unions
Zche
the strenqth WF
an
the case
is
the
terms
o)
W v e r , i t may be
i m p l i c s t i m u Far
A
r,crunt,ry
r e l a t i v e p w r h a s i n q power of its
exports m d t h e sactar-inputs that
h?ve
qc?-x~ i ~ t o I h ~ mrather
thest the rhartqes in the vrwfucilfvtty of the tracfiq partner.
In
.r
=tian
we
p r e w t t , ucrv -timates
ehaf 1
oi:
truds for the s t a t e u4 Ktrt-aka. W e have c~~retcucte3
two
estimates
of
em-as
the
9
period 1974-73 to 193H5, is
into
impart.
account
elmat
end s x p w t s .
+rim 1962-
to
the
The
"Letrrrrs
of
series of
r
e
?ha f L r s t series, f w the
s
mre
c ~ t f t ~ ) r & w n ~m
i vee t e t k i n q
entire
cuRnmnlity
basket
of Kerale's
second serie%, +a-e longer time p e r i o d
1937-343,
is
bared
un
w11y
select&
Major
rmmoditim ':twrfi&. aqd- sxuertex!.
the
e+ t h e k=t-as of
bwtr'9irjru'
factbxs
'ctre4
feCf C ~ W ~ C E .the
wwoortxi and in?pwked.
d i scussicn rertaxfi
prorpecks o i
ill>.
F)n
t r a d e by
Q ~ O C ~ S
<Section Li,
att-t
i s made to explain
exc~nriningt h e un*lying
of comwdities that
In t h e
background si this
t ~ n t e tvie c m c l u s i m s are drawn r w a r l l i n y t!w
rwic~talterns o+ tf2de in t h e n e w futwe. ;%*ti*
averacje of
The w s i q h t e d
ZvorL. comwx!ikv
w
bsskets
o+ t h e e x p w t and
p r i c e indices
~ m s t r ~ ~ t sccwdifirj
e d
e
('5)
the
impor-t. cmmodl t y i n year .t and wr +-he w e i g!?t ~f the I .Ell
R
impel-.t, comsodi.ty in t h e total velue of i m p o r t s the11
Q ~ V ~ tS
he
ajt rupvesmtr,
Simi Zerl-j i C
in year t
COmtI!oti;itv
imwt?b C w
a+
nu&-
ifibex
~PSCB
the p r i c ~ i n d e x
aftd ;Jj the + e k q h E ,
F J ~
;-1
iri~Pta
tr?e
year
t.
ti23 .~f;i! +231%9w%
uf the j t h e x p c v t .~:wmi~+~!ity
n
value of
e x p w L s , then
hi3 q 3 +
i=i
w f Z l give t h e price i n i i e ~
WMw cf e x p w t s Ln y e a r t.
There are t w o s e t s
ths
+ilrst
which should
TIie second set ai
the e x s w t
C ~ p C ! S i i t i u n of
i s s u e s concwrt
ME
furr~islha
have
I
relied
the
W2th <,he bzse year
mention?&.
and
'
on
indsx
29:W-71
expc*ci:s
indzce
tile r o m d i t y
b s s k e r and the t & w m c e
+.nd icir;rc.rt
tco be cmsidwed in c a l r u i a t i n g the
i-a-ts
be Giscussed.
set 04 issues are relatsd to ths reievmt orice indices
ta be emloyed.
Y-r
of i4csuss
a*
t e r m s s+ t r a d ~ .
prices
o+
commodities
Nuribws o+ Mhclesaie P r i c s s I n I n d i a '
+w the conutrcr;cficw,
uf p r i c e indices
of
ci?veats
Kercle.
1
F i r s t l y t h e wholesa2a grices
not Fu!lly reilect ti-snds in t h e i m i t value
trzded w in t h e c a . g p ~ s & t z wo+
,
f~.-ity
pl:
06
a11
may
be
India ZsveT may
e x p a r t s trons Kevala
grmps.
H ~ v w ,there
is no escape +roc;, t h i s Limitatior* 3s it is not p o s s i b l e to derive
any
sicrres
tiam
data
CH imports
the prices
if the
curi.t value M mportsfirrgorts;:
xnto K w a I a mcl lrwc+ =he w z t valcw
rother than tP.e rbselute L e v e l H pr ices.
rate of
@@
nr;dw.
It
W I ~ e l eprices.
all-IndSa
be higher than the
trend i n p r r c -
We
&
.
incr~aseo+ t r m s p w t ~ o s t sha3 b m t fastw
4
Stiil
#+:.
th* r a t e oF s~cree-cs of &,oPetiahr gcLcetr ti?= it m i d amen tb.
iw>orts ~ ?11i Oa
the p r i c e
index 6
v a r y frem
~ n t w n a lmolesals
bs
.to
cclrrr~utu
a
Intranatiwrnl md
with
fraught
wight&
B K ~ - Qan3
Tire zdmZ y r a c d w e
p t i ces,
d
avwa.qe
85
Lt
pr2ce
the
intsrnetiorrcal trade.
difiiruittw
m e ~M#estloat?.:;
indicnd
orococlure i s . a h
This
i n w ~ l v e choice
wit
:'
wpropriate weights +w intranatima1 and international t+& rn
asses-t
of cross t r - a 4 i i r
the data
ovw- ticsir.
t h w c is strong cwrelnrim b r t m a t)tF
i n d i c e i e i that
international prices as tefbwte6 Ln
oxpwt
c
t
.
Cpffw is an e x c 6 s 3 t a w where whcrlusaie
,ha prices
T
of
values of w b
unit
i
t h e r e s p e r t a ~ ewholesale price tmlicn,
md
+r m t h e
larger y insulat&
close enumimtim re
A
oekroleum
riirpxd rf se
wodricts
to h.u.kn
prices seem
f n znternatlmal prices,
thdt
are
sdrrrinistrativdy
cmtrultcrc! e l a o tend to d%v+rqe, from t h e i n t w n r t i m r f prices.
The choice
uf c
t h m r n the c a i c u l e t i ~ n
i~t~orts
L
R ~ be
d
i t ies
L+
the
equally
rrnd wci @to
price
wctblematic.
to be assi~nd
ta
irrdicw
In
OUT
6
e x g a r t o rn
CDIIPQ~~~I
e s t i m a t e s +or
uerbod w e have considered
the 2974--E to
217 comm?ity groups occ->tin9
t h e value o+ t t- a d s i r~ 1975-70.
uf term
Tmo yet3
O r # fiere
,
/
o+ t r H e have been construr,ted using t h e
w i g h t s i r r If 35-76 aod ;ctS3-31. the tw y e w s
t r a d e . aatd
are
c r l c u l a t ~ fw
intunatima3 i as
avat lable.
The
terms
ti-:= uverell
kr-edu
oi,
we1 3
es
f w h i c h complete
4
trade
U+
hvwla
4 w interskate trade
1
0
are b h r t t i ' i . ~ irt both the camas,
between
M
n
r
w
, 1373.-79
equaLly ahero
3874-75
m13
and
1978-79,
iW-62.
have
been
(itltwotate and
seoarately.
The G e h a v i w r o* t h e o v ~ e l terms
l
of trade
?3 and 3%-8S
per cent of
than 96.3
The,
They
The
between 1974terms of trade
sharply decl ins
This is 4allcmed by a phase of
impri)YCnrent.
& e ~ j ; 1 f e & r 0-5 1tg.e (Bast = 1978ftl = 189)
a--0
o...------------------r-----.--r-----------------------
1981)-81 C a ~ ~ o d i tWeights
y
1975-76 C o i m a i k y b i g h t s
7
~
t
Pd
Pe
Term of
Trade
I
-
Pr:
-
Pa
T e r m af
Trutit
-----W_-
Graph 1
pversll T a r m entl Trsde (211 connodi i e a )
-Intorht?ts
r-
0
1775-76 ~ u mcjb
i !m
Graph 2
.
T
m of TFMJO (311 cor.lnorJitim)
-
-
'1980-81 wni t h t e
Table 2
Q+
l p j - e ~ , o+
: ~i r , t l ~(Pasrt iC70/?1 = 1.QB'f
----------------------------------------------------------------1 773-?a C a e s ~ dtlg
Uc i ght s
19PP-82 Coaeodity b i g h t s
72ras o+
Trade
Px
Year
Px
io
Fa
frras cf
Trade
----------------------------------------.--..-------.---------------
Thrwqhaut, the
1
.
terms oC
t r a d e remain
The detwiwetim i s s h a r ~ e rw h e n we
(ke Cieph 1;.
The b e h a v i w r
met-
remains b e l m
ih
the other-
are a m . t h e w ~ v e m m t
of trade as siniiccr to tre
tho
+,re& c -
i?i8-71
ievel
c b u t m
rhe
zisove I w o
e i g h t s em..I&ye.3
'ihe 22-
ehe rqrevstatc t e r m s
8
I t also
t-,r-a.de.
throuqhwii
state t e r m s o i trede ~ a - . d ~ r L l n t rt h
se
trade to the c-diky
i?emb &en
3waJ!.
analysis. ( s e e rGr&?h 2 )
The d i v ~ r g e n c e
23W-91 e i g h t s .
i n t e r s t s t * t w m s of t r s d a i s rather
oi t h e
1974-75 ;.nb iW-8S.
c w i t y weiqhts
i=ltM)
tfcc i7723-31
rjci-
tne
perid
af
estimtes oi: a n t o w
hrvenass of t h e terms of
tn estiffidtiarr.
&tit,
1975-7A
the
entire
C w e i g n countrrer.
requirernment
s
petruPet,im eas
crude
?3y
1980-81.
met
being
by
being
part
a
inpwks
of
impwtted Zrw
the
from &&ay
iields. C r u d e oil imports con5titated 4,@€3per ceot
inter
state
1,9923
This change? i n
impart:
bill
the
crwe mi!
High
u i t h e totd
in 13881-91.. EVhmas I ~ s Tc. N . ,et.al,
cw,ositiun
of
ink-
.
state z
m
basket is apparently . t h e reesbon .far t h e rfivergent Wends.
2975-76 Goesodit~Ueights
l?&8-al
Caaeodit y Weights
Year
PI!
Pa
-------------------------------------.------------------------------------
Terms oi
i r ado
PY
Fa
Terms bf
Trade
i!.M per ~ m ar?d
t
375-76 efad
?I,
l a .-.~ . ,per
fl.*.lt
itsrjurtl~ vei~!ein
share c.4 r - r + l r t d e t i ~ ? w a I
a . t i g ! r ~ i i t d c tt?~~iar,k
of
wi; w i ~ r 5Z~CSVU G e e t i :tigi-rly wulaki te m r i n q in 4ympathy
aith the ittke-nntian.-i o.-.lces4i3'1e
stable,
everef l
I!*
l9C%?-Bl r e s p e c t 3 vel y,
A t the s i t e time ir%er~
k 4
Toe crude
re:k (3i
Crucie ppetru:ww.:
cf-ices
.
.
:. :
irie
r!*ve
x
orire
i
ui
:
t h e raiincld
the s n w p e s t
d h o le s.a.l s
-
Greph 3
-
Princw;J~rlicnsu-urlc
.
.--e
ktr~Ar?w;r
........- end Petrol-
P~-I::!@J?:::~*
.
increase
in
r
e
since
inclusion i n the i m p o r t ,
the two3
41raje.
O*
pid-*~sv~?nf,ii3;5. Therefweits
+he
basket
K e r e i s would
94
tend to deprnr
is deizatable whelhe- the t r e n d s in Ue
1
prices af crcrble perroleuie imported i ~ i ok k i - 3 i a to m e e t the dclwrrd
of the oil ref in--v
st C - ~ h i i cx d d have any direct t-elevancc 4 r
the r e q i o n a l u r o m ~ t ? . J z
mineral oiis rwcrnk f a r
s h g n i i : i c a n c e to
issue
";-acie
Lhe tcarcrls i n t h e
:5
cot~etruc+erJ k e r n s
we
Tcs SQCUS
mce ki+e
~jetr-oaie~ta
exp.lrrts
-
end
it-r
brjti-~r5e
tt-i..cie excludinq
:;re t r d d u
k>=+er,it
of
peCrolsum
wltltian
ME
c.irsies.
&rapt-i
~iocrldhe
is
chosert
into
of
t h e state
~ l f r ~ ~ r t
gives t h e
con9idw
t7homas f s a x
in
petrolma
prmlucts
from oratside.
1975-75
et. el. Im3
Cochir,
tie
into irerala as net
Ezcpwts of r e i n e d minerd
the expwt
basket.
Tk
in t<erala has been astimat& I.;
2nd
The
Te
Refineries, a
as an enclave uni i; and ass-
cunsunrption of petrelec!m products
crwes
overall term sf
43 remarkable improvemutt
oil at-e slso cmsequzntlv e x c i r l d d frm
be ks. 165
the estimates
Keraiz i n t h e ralculstians.
tu
cmtrai gobernmmt ur*eretakinq,
actu;ri cmsunptitm
5
In
;mrc&.L.
r &ir, to iyitare Ct,c c~,oumptirn
p~raiurts; within
have
this
be seen ~CIMI
3s can
trade both
pekrolrrrim.
i i r
CW)
and imports ere ignored
t h e c~lciriati*~!.!
crC z n l l w s r s r r terrrcs o i
tc
afitcmkim
tcerie +or Ksraia excluding the
a+
i n pstrulew anti ptrkr~kttiific r o d u ~ t s .
Graph 4,
L. -,
Kwala t h a t m l d be of
..-onsu:rtpi-,irk* w i t h i n
i.-wl~ii?i
3e~ePwwtt.
prices o+ r e f i d
Rs-298 crures
in 19#+6;,
re,vised set of s~sculatiansrJ!
indxcec of expart and iepwt prices ernd OVWSII t e r m s of trM+af
k e r a f a using t f ' ~
adjusted.
.- ~ ..
; o a m b d i k yimights fw 1'?7>7ci
and !W-
8 2 are pre-t&
S a?ld
i :)_+$.i&s
am
&&eest.ate ...Terns -.?I.f . I c.3~~-e..
.w.th..~ . ~ u . i r _-~=-WS~-I~~W-~!~-.?E$.EQ~.C~?-?~
~ . . . ,. .
-
--------...----.---I-.-
I?75-l'4 Co*r~*&kLy,iwiqhts
Px
Pt!r
..-.i s :f
'
?irk?+.?:
Year
,
,
'
1~4-75
1m - a . 3
l c>E33-!34
1 W4-85
:
t~
-----
--.-
-
1.38a-9r C c m m W i t y W i g h t s
F,:
Ys
T e r m s of
#.rearte
- &. _
-.
& - r r V- - - - - - I - - - - - -
.
3
2
5
4
t'
-----------.-------------------I--------
I
I ?a-8:
199I-82
---,--..-.---------..-
.,,,,
1
1975-76
1976-77
1777-78
1W8-79
3779-88
-
259.26
4
245.73
$73.21
195.44
=.+,LL~.
z;-&,
17i.
Li
t ?ha67
5.93
LYb.5Z
l€hmZC*
i84.64
21xmaa
43.52
253. Ja
6.93
m y asc?
2~3.~2
274, :."L
2s.49
=A
3i.5.34
--------.. - - -359.13
... ..
ZZ?.f?7
,
-
80GE!
8.93
1
.
8,3i
14$.;?7
24&,2b
152,ZZ
3S&,BY
i4S.t.Z
184.45
213.36
2 , ~ a 237.53
159.25
163.51
246-432
-
:72-b5
I . , z*G?
7-
L?V,5Z
-.--cb~a='&i
243=723
0 ,
Q,SF
~
~ ~ 5 . 1 : z7s.c~
292.89
3633.27
!,GT
:
.
3. &
0 . E9
B- '32
12.. 521
La. 9s
0.73
z. t.2
omSG
e,
31;=57
-.
7;
U . 77
.
$-4
.
.
.
.-,...-
Sreph 5
Gvar 31.1Ter:.$-&,J&$
.--.-.
d
.
.- c w?CcZ,-
'oP--&t&OUg
Preducts
1
O+
terms
7110
of
tt-ir~e
kith
actual
tile
cms~~mticm~ 3 +
. : t r o l m pc~iducfrc.x?slrlered as eet impw ts i n t a Kwala i s taken
!bas+
the
3
of r-aie~tlatimsand t h u basis of
wproc~r~i44p.set
tho etimat-
'utve d i s c ~ s s i o n ~ . 2gf.h
ratio
k 1974-75
&el-
is
chwe
is
197~3-71 :=3.m) Level t?kt
E i e c b i n ~du.rlnq
It
p i p i d l y imro-ve uuto 1WS-79.
WE. Froe 1?33
ths
reveal s i m i l a r t r m d c .
ancrr agarrr a s t r o n g resergE?rics-
nhoia, t h e t e r ~ sr.+ t t - ~ t i .~mprove
~
by
ra
the r i ~ x t.cwD
;mints between 15'7'4-75 3 r d i i;81-E?S.
u r h i n d Zb-'Y-z
>
.,
Ci,
U.KC~N~~Q=
L S e 6r*phs 4 &s;- 7 3
W-aRun.Iw-cn3-.~!--7rad-e- ~962=&.3..-i;~-l.W.~57_
L W ~ C O V ~ M S ~ ~LT)
The
i:he
twms
a4
' s r ~ m t ii s~ brouqht ifit0 =harow
m
;c*g rurr
i'l the canstructrun CJC- truch a
t 4
i
series.
i.,;trskG+-
3i.s erii~1
MS
:
shal;
GQ
t.rs4lf
x G
e
'
. ir.twstete
a
w
There +re S M
~ t h c t - a uwl y employed,
iitbicete the
i
when
t r t?de +-xKerai?.
+ r w ~ i f fi~ide
trsC'+
uxpcir:,
itwort
i
c,mrmoGL Czes
: ~ s t s04
lC75-33 tr-.rde data. W ~ - i c c ~ C-+
s
iliil~~'li4.iL&d
*;r.
~ valcco
of each o+ these c ~ ! mL i&e + in
the t ~ t d l
c.9 t h e
basis
Y ~ ~ C fi;
C )
che
mket c i these tF3 i m p w t / s k p w t i + ; h & i t i i ~ ~n lS73-'i'e.= Foreign
u r n s w e ce,,?;idered swarsceLy
Rsr
wise actcrels.*
+fbd
W k 9 ~ Z vt h e w h o Z e % k i s o r i c e cw.& us&
c ~ ~ c u l a t , i ocn
ci %he ~ n t w - s t a t e r
RDW~S
tmdex.
?!c?
ewe
irc
ths
I
.
i?i4 c$f-rL
far the
~ l t l u eof
r-airr?Ihticq 0.r: Guraiqn e x p o r t
orice
TZle e i ~ r b t a uaverwe o+ ic?Lw-s?xt.;esycrct prics rndox and
+or ei.gn
-ice i n d e x .
rade
iZhe w e ~ g h t h++e?.e Uas@d on
ir.3
wpwts i n
export pr- ccu
Us
the
aisdd
&r+ht;
;. ndex w s
Irsrec~ b e
s.;:=ut&
+;*ken
as
t i h e
5ansil-ivitv
of
tu
Lns
0 v u ~ 1 1e x p o r t
the
t e r m s of
+woxqn and interstcte
lhe c~mstr~tctio:r:
o$ the 6 x p w f : pric~5index.
Estinat-
b v v s r y i r ? ~ the weights
were made
a:?wor.tsi c q i Lniil range a+ .1;0:?W
to 70r 3 Q W 4 A l l
cke difference t h a t higher
tandem, *i .ih
foreign e x p o r t s b e t t e r .-ire i n p r e v e w m t
appf-opriata
mke g i v r n tile
rtin t e r ~ s~i trade
data
reluvent
+BE?;
indice
TUi!
-
.
-
o
f 38:78 as the
04.
export
mrr
the actual rat12
G r 3 9 h 8.
Th?
orlcw art
itnplrct
-
-----------
state
Fareign m
e*.
~ s r t p r ir e
e
pr-Size
price
I odes
4
and
+T~J
Y W ~ S06 Trade i962-63 413 t 7 6 r i - l : 7
?Bass = iY-;G.J?l = 1 - X I
Y.
_
I
-
Year
in t h e terws o+ trade
b&s& on "crlis r a t l o is gi v m in
af
move In
the weightage givm tr
in 19-76
::ha+,
.iabis
-----
t h e ssrles
.?;heratio
cave se2ei;trrf
mid- seventica. Ue
ta i n t e r regirm!
of fareign
-
;=trr;c alr
enpor 2
i?t- i ce
I
ride*
-iarifis r;f
Lr
~?dp-:
i ndex
---.---------------------------------------I
2
-------
.-
l?
E
.
.
I
d
1962-4.3
61.4B
m
dd. v
-*5'
156z--.5.3
m, 35
m
J d b 3 2
I' 3 6 4 - A L 5
-- &i
18
aei. 29
C--8-
i 366-67
~L,F&
3 2 , .Ti3
13 h i - M
78,%3
88,9&
69. FQ
68.57
.!.&,
91,88
96.67
75.4E;
?&&.is
1 s-s~-&?
1739-70
1973-71
397: -72
i9f2-73
i~7.z-7~.
1574-75
1r,75..-76
19:,5-77
1?77-78
157a-?'?
137?-ErE3
iw-31
a
-82
1392-83
L
1387--84
i $84-35
15&3-w
t?Eib-97
--------------
~9
t L*.
r aa
10;a
9-5.
23- ';"
3
iSt3.S
3g8,2&
33-25
;;&, 6J
142.6
253.45
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.>
574,2y
i76-25
-7r7.33
jr;
.i ,32&'35
~ 4.
3*1727?
, q - &T&WZ1
- -.
@
64.26 d.SA1777
~ , , 5 3l . c +, .>s66
~-
37
aL,'74 G.&530C&
64 Q, 9~-,.'357
31 ,73 @.?46i&z
rat3
;.&.'7&
31Sm7GJ
13: -66
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2fG.13
iG4-G-3
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;3::..,ZIS
Z4.81
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e$
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27G.22
m4.82
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cn
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FtS-66
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b
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----.--------------------
I-...--a_-.
i ~ f . 3 .44
2 ,4
273.75
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Z
~
1579793.G77143
166.58 &>.693819
i 47,4 1,077548
210.2 Z. i 10244
21'3-54 l d L Z . 3 i ‘ 3 1
23:. 34 1.8522T
247,Vt
312.92
zcjrc,g;'
4
27.&,G 3
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71.58 0.9417M
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127.42 @.'79021
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:;iSm09y1-9$7&=
a. 62G.2'7
512.34 1. Q83577
1.185978
17
sf?, 5 ~ 1 %TI&, 32 1. ' 8 & 1 =
514.55
435.S7
4i3.21 1 1553216
... - - - - --- --. . - . - ._*_. .. -..-. ...-
-I
_^
-
I
_-_.-------
~
DesaFru t h e
ker-
w
of
. ..
i
t
b z s i li o i a ;,or u
$:fie
oergmtaqe p.;.i
,
-
tt-e ,~+-a;ie
Subwcr~f,
'i
a+
t,&cn.g
J:.#&T'Q~
.
'r;-,e
rl!-s.
.
y 'st- s
CTC~f~~~~f:fj-ttr-p
$
11
r
13 ssen
C.-E
bxr
2
s . - s r t i r i q .:'.
prig*
i.-r.i?>
;'ies*
zi-,s+.~n
mr-rr-e
..- - .
A
1374--;5 to 2 984-
t<\*i!
v..
the
‘2J i - i 3 c . i ~ . I C V C ~
od~
r.$r
I%?- t l z s k c;rts
~
iiibi
ie
it t
rt13si.
%
m iLd
anti 1374-75.
is9m i: rice I n d e x rose
b:!~e
ii?+i-tx*?
G C ! C ? J - ~ this
~
mrlad.
I
L S ~ 2-93
-
r r ~
r
~ ~ e r - . . annusl
.j~
!
i B . 5 percMceg+ .jsl --'.*is
~ e + -.
-
. .
sx~cn-I-i.r:ce iitde;v he= i,t.t-dec:
price i n e = . ~ : n
terns of i.:-+de. .hPi.+-41t't
khen t i r . =
t,-..L.gn :fi.-r,.
-+
2
t b
the export
rake
a+
27.9
incre.zsed onhy by
erl+:re ~ e x i o df rum
Lm=ic;ccat.ion I
rxse
P~Lc t h i s
s c ; b ~ ~ u w phase
rt
and i W B - 9 7
&Lr++?? 1974-7';
p . d - r - . . . d .
f;)i'.;.=..: lflCrZ*+;=d
t.2
us
a<?=
.;c.?r>??~,i-.c
p e r ~ z , f i %p~~+i ~ t k b
+-+-..t:ll~
C!,S
~ f i 3 c a ~i t~ f i . "index
~=
tQ&,L-i?
The
< + : M ~ O J ~ -
~ t v % . a u e?hit .s:i.*w.t
p r i c w inciex rose by o n l y
.
n
iu-.t.c;
+ ~ ae d
f_~'%
%:hi
d ~hi t-5 ci??~si
der.ab1a
51% ri.'
<ST
b y la. 4 per(,art-~a~+-t
polr:Cs per
dst~tclr;it-ion
...=
'5 +3r
ki-?e
srtd
zr-v~pc(
\r
,,:-ret e r m s u+ .Lr:>a.; betwi.sn 2?&2-63
>-#;a*..
G : , *r;
p
LA
:
;i
l_r.'.c!.-jy
c.,~,
Q!
.I*
&+,pi~rhtc?:
.
99'.1.+5 5 ~ f i i - l
t ;ii~,:Lua*;~
m5,
cyciiczI
I t
tr!*
.
:....I--75
.,
.Z
.r-.i. j e . ~lice s ~ h l f ?
L n the
in'+:-.
-..
2r~d'i'&.ite
51eh;vr
L.-,-
un t h e
;7;31-;53
d3.-.;j
: h ~ ~ + r r a ~ i\;-2;-6-*
I inbkj
V S i~i i t a l p+ t i ) +
The
-.%~e
tw::
ru.n
t r i e kt'eflds
;-'XJ.+-gZ
i..;.j;*~q%
.#
,
iw-r5.
bv 5:f?ei.i.+::.,
3 ~ i o ds r r i b + d
G
:,-,
;?'.7'4...73
, ~ t ~ : p r e h ~u~es r -exere I see
reiative dnkw~orei:i~r-,.
C?Tdp!!
+
rr-e3k series & h i i s i t c m r a c k ~ ~ rcifi!iel
a
r . i + kc*
d;scc!ss&
14':.'&7+
.?1!7~f ~ l e i r _ h * l i l ~ l i ::be
) ~ ~ -i o n a
~ : F + + L v ' c ~ F ~ c ~ s -:I
+ester
t
js
thm
s
m that
the i m p o r t
+ar'oi~.r+h;u i o r v q run improvement i n the
.
.
+b~-.5;
pr ice tind.,.r r i\j?ei D~'5 :l)e?- LMS
!.5C;35-!3T
the int(lt5tate PXDM-t
a113 t~14+oreibn
export
C? Inrfnx of Karslc'o E x p m b p i c o a
(in rupee tnrnn j
+
Ind% :.,F KnrcrIeCs E-Q'
(in d o l l ~ rtarns)
price index
at
18.14
per
ifice index rase at 3. a4 p w
iorm price inden w a s
+intwfis
0.i:
r m ~ tper snnurrl.
een t
per
I
The avers11 e x p o r t
.
irrcrease i n
7 r:e
m l y 8 . M pwcmt g w . +nr?lrm..
tr&e has improved at E . 73 percerri. p e r
Cm-tquently
act.tlc,.n d r ~ . r i n g
24 year ~ e r i o dsdrrce lJb2-6-3.
hn-furl expor..tit?y devela~inq regli.nc
c W i + v e ~ p w t e - snave ~7nthe
Is
in he w 2 b .
c.rii-m'l;es i j ~ ~ S + e r esd e c u i s
'siytias ),h5 b x l i n e wss mi.+ rncderate
trade have bearr
G ~ E ~ V 711e
.
1
.
The p r i m w y
as in
- ~ a l~ i i r f a m w 4L y fir-ices
decline in
the case &
< I . e.
cuannodi ty
trices de+l a t e d by uni 5: v z l us a$ rnsfiu<~rl'tu~eb)
have ntld-'eighties
faller, to the Levsl
vs
the
under2 v i n g
UPU~WICS
the next
rji
KwaXa?
sectlm,
oi inter-uar
a
. !Sark;ic,
.f:~cf,r;ridt-=spw-fuibi+
Lk is
to z h i t
19653
Whzt
+#rt h e di+.Cwential
question
HE?
shall turn i n
er~ert
irs
*,it;;
a
w~re
.
mk?
.
&.; y
tit9
T P dti
~ VO
Ut0v-t
.3
the e x p
11uteci aire~l-3
j tilat
5 i ~
3):;jt;
t.t-ices,
Kors?a.
c ~ s eC-i
iciber h+.a tended
*
be
Lr5
& ~ ~ ; ~ t i i ~:h*s+
+ V.#--J-
Thereice;
5
e . % . ~ ~3rTfL: C W .
1i 5t t t r q ~ 5.4
i
b
?
, 1
-
srtd 2376-77
the mycrt
~ c ) o E ~ :
23 i-ne other harid, the export prlc
~ F ~ F ~ Q T ~j.:.atr_lt+.
Z
4ear 5
y - ~ si t d u l i n ~
Ln i l v t ?
-314 r ~ i t ) r 3 ' v ' ~ to
be
E . = ~ . Y ~ . +~ ~ L ~ . . ~ ~ _ a r , %
o . t tihoei l
.e;.
index mhibii
eiwcurt; p r i c e
t ~ g t ; , ( m " r a ~ i l c ; m c ~ ~ r &to
ie:. a
IF!
.e . 1
.
:r
i ifi.2c.rt pr 1 CQ
-
-
Vi~iv
i i s .
c - : . ~ - ~ ~ L ?C
I . t, ~
1
ste=.=tb>
r ~
a t li .+piy
l
ehc;*Le I?+++ CWOGM
it. ?-a=+ - ~ + = c w Char, i ~ p w price
t
prices or?
p
t
i?rtr,~:
:~
t ? - a d @ r-'&
'?he P,&r.mS QS
the years d
twes
of trade.
i~
. , w i i s i t u s e v - exa+ir-ti?tid;tn of t h e rroovmat?t
lii
4
S L C ~
~
i
ai?
t
i~
r ~ =1; r s t a , t eexqort
S ~ S O
1-
~ ( n p 0 f f ~tll
)t
price* and 9waign exnq!
Ihe-.Eo+ezg ~ .- .' Q Wt...GornwB.&2-yY
.PC
icgs
7-
.tr+
trrh4:e ;rtdex ~f
m ? - s blx)ar?'L
175Ws
r
than
the
wner &vtwagr33
9
8
:
r w e ~ g n exports
interstat;e
(13743i71
ciely
3:s.
ti=
the wcice fluctuations
arqu
irp
tcs
k
chcs
e x p c x t price Lnclesc.
2m) nhils
I n tn,
iatter avw-
Lne rase i n f treigrl e x p ~ v tp r i c e occulwated .vsP
have alao
escaiated.
l i t the l%&
beginning o f 19743s tire f weigr, e x w c w t , f ~ i r e ws e
r ~ l a t i v e ; ntwe
~.
stdbjs.
eNpi!wt-
=
been relativdr
h-
%a
5 C per cw!b Irbrreascr i n the fweiv
p:.r 1 ce index rtC W a i a 1966-47 i s due to tnc Jt?vaiuatiw
t h e I n d i m rupsc in that
pr Ices of
K w a L a r&e
v * ~ .
m3 y at
?I>e i r ! d i x
2,be7
OW
ui
<:ant c(rr
i " x a : g n w3ui
~ ~ P L U
betwci.rq
R
13/2-63
$972-73
end
d a l l a r exchange ratio.
cr+
the majar 39 m i u g l
be
the Sweign
cmnaditres
dramati caL L y
the internationai comw6it.y
P W
nmk.
was
a c t i v i t y and fnCIatiun in
an
nut
drm
exhibit m y
onwsrds
or ices lea0 t @ b e ~ O s &,y
a r ~ u n d40
aFr111~)
sf r e i a t i v e i y high economic
;jrdv&aceci
cci!ntriw but
aw-icrlltur&i per+r~:wsrcein t;~s
d e b s l o p i n ~c w r r k r i e u .
P r i c e s cmtinued
1
The
.
grimary
29=-74
change
yew
tha
*I:
the3 fiqF p r i z e inden of
in *+.th
*an
ii77.3-74
movement
pr;ce
5 ~ 3 7
prilrcary
r i t u a k f an
The
crf
reiati*/e stability
The
intarnational
kr cen
Cmmdities.
by 'the indek of the rupee-
de+I eked
af Kwala duriny t h ~ sphase rs f ~ a a l yline ~ i t hthe
e x p e r t prices
5tXpuionce
&en
of p o w
Cammadi t y
to m7ve uperds i*? an irregular fashion up to
upr~rJ r n o v m t
or
keraLs e x p o r t p r i c e s w a s less
dramatic i n i ti cl l y t.15 acceleri.t& t h e r ~ . h + t w .
The fnajrx
di veryw-ce
price
C-ity
i?nd
ifidex
c.;
tronda
T
Kscraia ' 5 .Foreign e x p w t p r i c e index
taok place i n t h o ' ' ~ i ~ h t i 4 i b .71rs fW
to
shar c i y
md 1=.
Linrwnat~
Cormclobities frw
3 ~ v ean
when
if
siido
The orice
'eighties.
indeu a4
the
with
.Id-
andm /jec:ins
finrni?ka.ry i'zmci, i W 3
Ker-ala,
k
recession
oy 2'3
w!
G+
rrwe
OW
oi
cent bet-
early
19849
The export p r i c e af
tire other t t m d , a f t e r taking. a nose
297e-79 began -La c i i n i b lap cwce
s t b -
dollar prices
reaclaia-tq ao s c i L time p e a k r n the year 1988-81,
C s m c n o d i t i a , &tec
m
in international
tha
fntwnitriona3 c m d a t y price? inoccx.
aya.in p-king
per
cent
h i m
in -1
than the
A @art
t h a changes
Lib
rite f w e i g n exchsnge
khs other hand. the
f ndisri
-
&~Pw
trze
aivwqmcc? i5 explained Ly
cef1ti~-tt,!~s1
depreciated
y
~cst.=.r.naLL~neZc c m m d i t y p r i c e s d m
exciieflqc r & . ~ , Ttie a x p a r t
price index d m
adjusteci +w t h e c i a r e c l a t i e i ~a+ tit+ fnciidrt rupee,
?ids tended
adjbstea sx$w-k e r i r * irtrjsx
te tire di ? f e,rer=cei n
basket oC E e r a i z =td
thil
~
ci y
t i s t A n wv:d
cmos-i
~
'cim
~
trade.
broadly t d s
raster than
to r i n a
ofi
the
t h e expwt
Thus, far example,,.tne
n a t sftktd
~ t a l as d air,wa:r. vuorr end cocoa th& have b-
i n s i y i i i f i*sa~skw absent rr? i-k-ala's e x p u r t s .
intortanre e
f
the hi*
Helped b y
cakes.
has
f'15se
-,
'eiqhkias.
during m e
rupee
above dramatic
uf the
T h j c points
t o the
s x a i n z n g the s~ecif
ic +raturres of K e r a l a ' s ext.rt
colmodi ties and their p w i u r w n c a .
characteristic which
divwqertt
c w d i t y
to a
lwqe e x t e n t
price
~ntwnaticznal ~ r k e t . Ccir
experienc6
is t h o
m l c r yt, to ~ s p l a i nthe
uf
KeraLa
only e x c 4 p t i r - s i > .
in+w S a r . cormvodity whose intwna'cimal 3ethanG has
'
in
thc
E a i r is
at1
ism deciininq
r rise
in
their
incomes
an4
+ram synthetic
competitiwt
ulstitutes. j t s substztution by other oroducts a s
ndng
incomes,
technologica:
chanqes
in
pen with g e n e r a l
despite
rapid
?t,al. 19-82
0-f
trend
effect
OF
hop c u l ti v a t i o n snd
Wpct neavinq in Eur-ope and t h e failure tu - i o t a i n
bu? even in t h e case
an
t h e qua1 ity.
c o i r , t h o unit value of e x p w t s have k e o t
cc+ cpward
shrinkago
m v e m m L c.+
cwti?odi+-yprices
y u e n t i t ~ . sxpwtud.
CThomas Isaac,
Czrtaccte Zashen
-- ---------------------.-------~-
2
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42.65
2s. 16
27.6;
41.94
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85.35
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217.05
228.82
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223.45
426.36
321.35
258.73
33.17
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$3.;2
50.59
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I7.33
51.76
65.1 l
57.02
72.93
75.42
78.94
76.5>
73.q;
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57.15
182.59
157.45
76.64
92.57
126.35
126.~9
115. it,
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140.31
236.71
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315.34
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566.27
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586.86
164.44
244.63
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240.42
531.27
575.17
468.67
164,fl
237,5!
314.54
215.35
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2a3.88
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143,C7
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8
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4a$.75
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38.18
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&;.56
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61.82
56.54
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123.48
42.35
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52.86
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27-78
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25.88
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243.22
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171.87
154.92
13.75
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23.76
2.49
25',95
33.51
35-43
44.41
b2.66
65,i.S
hi. 5 ;
^'
53.44
8
i4.37
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bQ.58
68.3;
51.~4
52.12
414.97
1
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22.17
16.61
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183.4;
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55.3ri
89.38
9
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45.86
59. I5
57.41
58.83
iti.55
Tea
_--__-_--_
----------...
S
-~
Peaper
lfarinc
Products
---- -------_--_-_
I
-
C ~ i r?arn Coir Rats
Co++cc
251.2:
3
%
4iG8 SB
392.37
332.27
427.26
431.53
4i4.Li
-----------------------------------------.-.
Gureau of Econteics and St.ai.i s t i c s , KerfLr i 5?72;
Dir~ciorateof Eionar&c; and Statistics, <erala 413371, 119881
bevartnent o? E r o n o e i c ~and 5 t ~ t i s t i c s ,K c r a i l (1SSP>
i9.h
iZeli
;3,11
1117,iJ
111.36
W.17
bi.!!
iCir.M
9i.i:
'5.51
27W
23b.41
219.17
2b5.41
459.97
35L2b
341.11
335.55
fha cmmodlties
trhol-C, hawe
Ishe
K r r r a l a , cin
c t h e r thzr?
demand c m d i t i w t s
coxr i n
tradition.
ever since l ; ~ b s g w d e c ~ c a . T h e demand f o r these
m * x e stat~le. b t
it i-c
Fur example,
strbi 1 i t y of
r e l a t i v e l y bouyartt
enjoying
5
c d i t i e s is not a b r r - i d w i d-.nd
is, t h e r e t w e .
the e x p w t basket of
b ~ ?f. . ~ fr i c ~ a lcmaumptim and
L s t g e l y gcivcrned b y t a s t e and
2.5
sew4
due
thdt
t h e relative
to
+d
or-ef ~ + - i i e sLi-re substi t v t i o n of cashewnuts by
1i m i t e d
despite the
rise. LKannsrz K.F.,
1 9 8 3 3 I t is
rmpwted t h a t ttlwe ir; 4 6 t t l e -;uhstiti?tion ever, Get-
beverage
.the
nuts
1 ike
+.lr.~c.nds has
beef)
farmer's r e l a t i w ~ i v r w t 3 p r i c e
cermodities l i k e
wsry
tea except
c c f j e s and
largo scale change i n ce:ativz
of a
in instances
very
The demand aejustments ta
grices.
changes i n rcla-L~-#e
rir-.,ces tai:e place w i l y in t h e l o n g run in the
case of these r m i o d i ties,
Furthe
, they
are al so ngt threatened
fibres w
by the
svnthetic substitutes
su9a.r.
As a conseq~\ancc;tnr demand +or t h e e x p w t c m d i ties of
Ksrala
have
1argel y
been
stead1 l v
incress&
deter-alrled
in price partir,rtlar:v
thee cmodtties
and
the
behaviour bas
price
in
Even
suppl y.
repgl y results i n major uoshrngs
if tho s t o c k s are 1w.
are also
of hard
the case
+ 1 c c c t ~ aitons
t.y
shartfaLlc i n
r e l a t i v e 1 y small
as I n
holdli-tgs of
Stock
relatively I w as the qualaty
@f
the
products would d e t w l w a t e i n stwaqe.
The p e r i o d i c sharp increases in
prices,
as
a
r e s u l t cf
&ort.ialls in prc;du~timin any o# t h e w a j w p r d u c i n g c w r i t r i e s ,
waul d
f n i tiate
additional suppiy
a
buoth
capacity.
marine products all t h e
products of
of
addi tiana2
It m a y
major e x p o r t
1 nvestmsnt
to
create
b e remembered t n a t but +wr
cm.mo4itiis of
Kerala * r e
The SUQPJ
y response
t r e e and other perennial craps.
these
d
pwsr2fiiaZ
i i a j lmq gestatim lags resulting i n
C!-WS
cyclir~l pattw-n i n p r ~ d ~ c " c i 9 n
artd pr-ices.
ddursnq
years.
oi:
+.
in.l+?mdence
oost
the
~i t;h ;;re-Fodic phases
tntervuoted
pwiad
CNair
.
I
be
tc!
a+ decline 2nd stsqnation ef
to
around 3:
be
19E-83 prove3 . k p ~be a peak
e l . 2-3
T h e o r i c s cwtinrs&
c a r d e m ~ mcyc?.e.
seen
is
The cyclical p e r i o d ha+ teen estzmated
prices.
f o r exatwle,
m r r u f i m m t uf c a r d a m prxces at v a u n d 1 8 p e r cent pw
t h c ayward
annut?
Thus,
ycllr
b o ~ y a t n t i n the
.to be
succeeding t w o vwr.5 aiso.
Ir!
the
e
of
f r ~ . ! a tac=.Le9, the
r . e 2 a t i . v e l ,i h i g h
~r:".ec:w t ! ! ' l i th!
la?"3Bs2nd L37&
M-e gera&s
19-s
;-5.B31;
M-e of Z0l.c prizes.
end earLy
Q+
-.
ran f-.s
coffee, 2s
:
r t t s
Lsr-a=iLs&n .Frroat#
1975 was resp~nciblafar m.5 rjS tP=s~ l i s r ~ e
+su&icz.tlun
~f,
G+
trices
~n
hist~ry,
In
1';'75-:7~7
.in:t
ti.,;.
&:.-re
enparts
ijli
increased b y around 3Z3 pw- C ~ L . T h e fi'ilcti) 4 ' 7 ~ :-h;.t t)waCI the
year
next
verr
was
to
.
i s r ~ e e x L mt
.-
i
Izkrrnetiorra3 C o + + s A~rseinertt
!?.lrazil Ln
1983-64 .jue
to h-vv
p r d unged d ~ w g h t919 iS62.
137Cs was
d
3
tsFnfsLS,
.* e r - e s - ? l
r;-
It -2s
:nu
the
crm
~ e l a k ~ yu ~ gLa w
3
o+ raiative3y
period
by
4
in
Srril*~dbyi
iiscacfe
32 nce
il.rs~tysi?t c r ~ + T e epr LCCS.
mid-
lWfd
6ank 19991.
Ths
uctilatr cn i n
tea
~ t - ~ c e s:
,::?e ~ t i i + r
c o ~ d ~ ~ hes
! v bean
,
rslativeiy
,=re
stack. h 0 I d i n . j ~and t h e i i o s s i b i i i t v
r
througrr
5
scsrcity,
perad
crezrse
+-i.;r*rj
p'+dc+:rrbcr' *:r5
T e a Drlces cusc S R S . ~ F ; + L i t
o+ reiati v
r l
v
!L
ct+
stabie
tit8
prices,
-riue
NtrtaJa3r
beverqe
the meration ef
E ? ~ S S~ ~n
~reass
in s h a t
t h e Ped~ssi n ti-
e e f . 1 ~ITAS.
d
0ft~;l
i t r o s e r n sycnpathy w i t h
r4+ee
price
rn
2a?e
drnuuhk
vspanse to t h e 23=
India's
attempts
ti.
L t trfitintied tu move dpwdrds in
197E:s.
li;
S w ~ t hAsra a ~ d
the
restrict
jlM5tic t ~ s u m e r 5f r o m
exparts
t h e rise
Government of
i n wder k b ~ r o t e c tt h e
iffternetfrwral- prices.
ir?
CWwld
knk 19891
sncl :mrlnu ovaducts are the t w a majar +ood
Cashew k e r n e l s
-.
* he
cmmodities exported Irrw K e r ~ i e .
IW cashew
has alre~cfvbeen r e f err& to.
h r p l y mve uovrarss
by
m
e than
+rmt
Cashew prices began to
P97?-"r ., &*en t h e unit
53 psr
gether 1 W ? per cect.
re p u t
r e e lativel y atable demsnd
value af c x p w t s
by 1334-7;. prices had risen by
cent.
The r z d ~ ~ z t in
i c ~r2k ~ u t : avai1ability d ~ e
datrrwgc wad c_?wi+ttfWJ ~ o c i d f c m d ; t i c?ns i n East
Africa was
+ha major s u p p l y can:strej.rtt.
East M-rican supply
rlwly and t h e sbpply has
Been su+ficient to m e e t t h e demand.
:msec~aentS
y the
ieshiun.
tK.P.
i60t
Drices cimtinked
L=33
Kaijizsn.
to move
pirkecJ up
cml y
upwards i n i r r e g u l s r
29ii+-a5 the cashew prices bad
By
risen to newly 7 tirres t h e Level oi: L97(6-72. tSee Table 9 3 .
Due to chen~asbrought abate in
the f w d
w l d war I f t h e rfeiwnd f
w sea +sod hss
s s t war period.
L
Japan
has
remained bmyarrt i n the
Farticularly, the demand +w crusteicems in
been
steadily
restricted b y natural cmdi tlms
imply
i a t t t s duricg the
+ram wtif i c i s , I
expsnbinq.
G+
culturing
marine
of
B-i+
ice behavrour,
crop
has
crustsceans
hird
m
r m e r a t ~ ~ l r t The
~
i i q n i + i c m t o n l y in recent years. tShajaha;l %.?Is
Ptmper the nsjw saice
suvply h*s b
has
becilcee
;%37'
the . , most voi&tile
;t is astiwted t h w
~ ' L d d=+an.'!
+or p e w r ~has
leer.
~ncreasing a t
19w
(3er ~ e i ~3tr
f - dftnum.
2
S E ~ C ~s ?t x k h 0 1 d ~ f 1.J+
~
1-3
&-d2.
o
till
the
wtrv
~ e p g t wp r w c t c t i a n
changes i n
o
f
DCpper
h35
been relaicivclr
.liapar?esen r ; l t i n & t ~ c m a l into
s
Prazilin
recsct-ttly , o r f c e h ~ v a- i l t i r t c i a t t l d
prudcct i-i.
Ctearge P.F.
Mtw
5
accwding t:
o r e c s D i . ~ ~ae=lir?rr
~=
lo+
t h tsrl
~
y 2TfGs *the¶ the br:i k +aLGe oi e x p o r i o &4+22in&
m e +ifth o
~i th c u r l lc?i
and
~
f l<-?.?.crraeLiooa.the VY.ices
T
cr:id-IS3iDs.
rrt
rase sns.rpZ y
sr, d = l i t r ~ t e . t i n t ; an iagiz.c+_ 4s
basket,
i n 1974-T,
( s e e T e t l v 9)
ekpwt
Zre(?t&nG 'r-z?'
f wtx t o u s
c LY-cirms!.a:~rres i
14'70s h a s
cw;ksre-.-.
d f i
prodir.=ts
SUPPI
i ~ k to h s l?S€%.
cornmoditiw W
the case uf many uf
Xri
t m f ? ~ c r @pr
o r n i l r y +tjrfiaoaiky ei(pe?-ters because
exgot- t
1
Anrs-khw sttsrg upward w ~ G ?
srice ~ n o t a h i i t c4
~ ~ -?::wd;a's
nat h2d
to ~
s s l w l y i n c h i n g upwr,
rears, ~ i r i t c shad b
u0~3t-6s t ~ r i If?;?--=.
mved
orlcurr&
..
v
pricrs i n
y
of
t)Y
t h e d i v w s i f iu
tfic regicw, h i
c m ~ t r anit s I n tt
The relatively. I m v ~recava
4!?i..ert;?,-e-.Gx~.w.tCww%.kf,)r_-F1_rr!,r-qs
We
shall now chnsider t h e trends
stzcte expw!:
rfiversi+j&
tr:+,fi
the
p r l c w of
account i w rvesrhv. 3 8
c m o d i t i e s khat
t h e total t ~ x o w t sof kt>= r - e g x w r ,
mre
i n trta
QVT
iotacertt.:.
The i f i ; * s e t - s L d t e e ~ p c . r ? . sat-e m:'
.inreign
expw.cs.
possible n w L r i t necgsgavy Lo enaly5e t h e
It:
t s naitW
pri.=r trenGs
o;
d!
'
+:-:cey.t+:; t~ L!IE rest o+' fndb 2.
L;~s+: =:-d
thp.
t a k a up
tno
commdlty grcsuix,
&?ist-,
ccwstitute
55 per- cent of t h e
.I;etaiie3 e x s m i n s r i s - t
+or
circonut prctducts
send r kbher
.
Ib 5h;rLi
girly
t o t a l value ot 28 major coqn,&ities that have beet? c o n s i d w e d ic.?
the cor?strc?ctL r n k
The p r i c e o f
0.. E ~ , E icmg
";m
i n t e r s t a t e e x p a r t price? ir,d?x.
t ~ ct ~ r , s t i t ~ t another
e
1Q p~
B P ~ C P St
cer:t-, ~f th3 !
ecoort indew D=cket c i e s l y r'cr32cw the i f ~ t e r n s t i w r a iuric+ t r e n d s
thsi
intws^cate export
raym
cunditions
klol-le
the
with
re1 a t i ve1.f
rising
prices
a t k r nej.:r
the
the exceptirm a,!s. + e w 1 1 kb
m-aJoy&
hairis
of
Hgst
corrcmudzties, w i t h
q j nqw,
ayit:
discuscsd.
already
hzbe
+astw
~ r 'ce
i
Lii,.us;rn'k
tlhart
?.ic=r;..Ce
t:ss
price t ~ b e x .
f-rices 0.) r b b t y and curch-,ut 0 ~ 1hdvs .'&w ~ 2 5 5 . ; ? * S
2 a~te!t:i.an
agricultirua:
other
ice:ative
tilt of p r i c e s i~
t h e tlte
Lo605
rc'.a'tive
rji
+ d v ~ u r3f ~ . ~ i ~ a i k .i~
it
uthw
~ . ' r 1 5 to
-,.diblc
1
The
relaxiqo
pradgct fr,r man+
d d i n e d rJtxend
rqiivds ru3bor
L L ~ .
US than
fne
stability
its. s p e c i a i
z t t r i b u t ~ r !t~
uses
2s
r:~..:in'i~i!:
t6
q~-talii:iek.
S U C ~
as
t
.
t-?t
~ i ; ED.
b%?srrd
wlrich
+&tp
cts~
a150
j,
it
i s r r s . ~ slittle
Cii;if+jr%fid
22. a3
.
c~:.ccmc;.<all is
s a k e s s t a pre+wred
- and
custoi?! and tsste
ccsE.itv~ meJiu.tn *;.;nun$ i'%!ara.li pogtilatlzf~. 4s
;:-:He is
c ! ~ , o..!
9w
cj+
oil
Tna urice
LriterastzrayL
m 5htw-n ths..t availabi l z t v y ui: otttsr w i k ; ; e
i w ~ r c ton i t i s =-ice ~!qvsmmt.;
The
L i i ~ ' : ~ , ~ r i b i;!P "?o ~
~ b 5 t i r n t i t
in favour c.4. ::c.r.x?~t
oi i ,
.
.
.
r
t h d t of r i r b b ~,C:.'oc:.i t!'te ;;?i~!-l'i'7Zs,
subrtenti a3 i y muvd
Ira b
.
~ ~ ~ m ties
t . ~ d orodircel!
i
1162
c ~ ' ~ ~ ~ ) e subs:.d'2ute
tifiq
to
s:,-!thetac
re-tk 0.6
p H c e n t i nt2rnrr.t.:ma1 l v .
Y - P J C ~ ~L
FR
.
i t s maxn end
lnuia is v e r y limited-
.totai c r x s r l : ~ g t i ~ , l kr rt i r le it
is around 70
proj.uctir.n
Furth+r, khe rj:w!esillc
..I+
C O C ~ U ~ ,aS
thus insulated trs
heavbl y p v o t s r r t ~ 3bv izcpor', y e t ! - i c t i o n s and
the t r e n d s
Ti15 the late 1-,
t?e interfiaticnrl markets.
lay
the case of c-,:.n=mut,dnd tiXl rcound t h o
c*i1
gre
102l,ZiB3
excwc;u3
Korld G 2 - 2 ;
the case
illrpwts of copra ad
ar?nv!n an the icllcacdict!
ot thcr
+ > . r s t half
19-
aj
r'crrotectiQ t i 4 ?-ore i ~ E w n a t a o n a lcmpeti tr an was extended
imprsr t e b .
have
in
in
c e n t o f cbie consewtion of rubber war hiry
nr~chas afudr~d 4@ 3-
to t h e s e
tofin-as per
ZJurik-!"rrj<he
YEWS.
mid-lY&Bs,
-.
the
consu!r:yii an o f thssc pruducl;% ln Irtiiia.
COC.XU~
~ rubber
d
ir
en irir,ef?tiwrs
grc-3ects 2s
t-wid.:. .v
d ~ a e d . In
:
a
ef
y e -
but
d
s
the expansion 04 d-tic
+W
supply has l a g g e d behind the
sti L L
C;ET~~L?%
f~ismatch between
suppl i.', t=?r,.sed ~ = i ' i l C.
$ji~ f i--:.c'i~af,Lwts
in -01
y
demand 4
conditions, the
cmmoditjl at-ires have surged u p w ~ d s . In such situations imprrts
c m t i n u e tc
3.. %mic.yur!
i m o r t s zrs rfa importent
prices
t~ k e e p
detertninznt of
ln check.
Thus +weiqn
the d m s t i c
prices of
c x o n u t e62 and rebber.
Tho c ~ c m u tprices In t h s Ims
to the u n r e s t r i c t e d icnowt;a
i>rsces begars
1950s.
f r o m the
of copra
to m4e upwards w 2 t h
But t h e
the
r a p i d escalation
Late 3 9 4 0 s
&en
had r m i r t e d d e o r e s d 3tie
from the
then Sree Lanka.
decline imparts in the late
of cIlcondC
t h e impcvts -re
p r i c e s i t?egantrtl?
virtc,tslly eliminated.
I; study M r e c m ~ ~
ait L prices has ahcmn t k a t t h e imports wwc ti:e
single m w t ,
importent v a r i a b l l *
wf t h e w p l z n a t w y
Hathew 19703.
p
The
m fur
underlyirrg the
77 per
cent uf
w r t e chsnacs
!-
ths-., ch~nqes)LJacab
downscrinqs in coconut eii 9.-ices i n 1971-72,
1375-74
as a
deliberate
prices.
L
C
jrowsrs in
prtventinq any
.=oatsin
R ~ V ~ aS
h
3
l e t - t ~v-un
I~SG~
50J - 5 -
6mpmt5, the .=ev.;re :sf.i~c~f;-~+i.-ni!ikcrlni;
8
a d
peak l a v e i e f n z354-85.
which
general i i?der: of
Pr.i,ce
&>rS.
T+?.-t3
? g , & i . ~ y>+.i
#era23
1982-
&ring
c o c a n ~ tei 1
&Z.Y':<,:~.
been general2y Z a g ~ F n gbehind the
had
521e>
In t h e absence
:r;^~rr-p~t
y.zis ~ d
t h e cac:?artt priras to
CIG~
ehen
till
i n domestic
~ ~ ~ c e c ~ ; i$ni t f .
bee!?
scbcw +sr Isrtze z m p a r t s .
can3eqi-...unt pnijf-
wep-e
r o s ~ t 7 t e db y t h e c~crlrturt
G e e r , ? ,y
. .3een
ch
increases
the
rf
prices
!3p~ft,.=;
whf
3 5 ~ 3 c?-LEG
i
~1
p ~ 4 . i r . y t~
Kurs.13
. t+
,
>.qiss-s&
~ i - C
5
~
s;J,!--Q~&
S
sf>^&^
>+ei-.L Q ! ~ * Q ~ 2 &
~ a , . r trj+ t ~ ( i , f ~ ? - e h e~e
fl~i
25
requ2r.tov.v s c h ~ m a ct+ g ~ , ~ i r d ~ ~ c : . t . i c ieon~u~~g=rt::ion,
'?,
Sr?tpwt,*~w~ort
s ?.fit3
p r i c e of f i ~ k ~ r !-er.sbe;l.r.
s l
ntt.-c.sL!red
1ntprnat-i.an* t
CHI
d u r i ~ g15'74,
- - ;s*;fjqp-2e~?ent ;fi
$25
r-~=.l"i~r:?izerArrt
a Dz-uress
subsidiszd e v p r t c -
0.;
e.b.y/e i rterease i.rc L i r e
ar?d
Raf 4 t h e
r;bsPLe
to
3'377-78.
The
i : ~ n r pe
l t e arass on of rhcs
kc prevent
t
g r i rcs
i 5 ~ MNani ,
pr~r.?rri
tk&,
iw>#~i-ts
of
3
nak to
the .CircCf
+
aj.
-%-.k
2 3 z 3 ~t h ~ f . 2 i.;i;~
j. :-?. 1;
.g:;~cb;
The i rnurlrks
?-eLe%%e
3 r l ~ 50
e ~
u?.brf~i2
y def?ress tfss dan;lastL r
C S ~c&&a
G
;&;-. ;.?
n,-,t
r l0't-c
s c s l s as +a
s&iiczenk
-~cceler-atT
r ~ i ? tZ;e or ace s.F domect 5 r, r?z.bber,
regulated as
oncc a9s.i n
Srsbseqi!enf,l y e ? c p ~ r t swere stpppcd
& rubbe? h.3.'~-ebw!1 ca~naLLseet ! ? v ~ ~ t g i -S7.Z
t
$:he
r c.. k-h.&s> pr-!
en;,
tg pr-cssurc it-m? groi.?erc; i k has n o t
a5 in t h e c-+.rju of ~ ! > ~ c ! m j f :
been possib3e to ~ f i & r t & e
515 C E 1~ipg
-I#
prices sharul y. rose
f '37.3-74
skbscqucnt years.
snce agairt
1,954-
-F~r'r_her
8 s s t e n ~ dby
between
rchbw-
i rf 297Q-79,
L i m i t s d ie:@ou.t 5
1965, The
$ N - t i ~ r r bet-
c o n t i nus t i ~ r tr,.f e:-:~r.r::sh e l p &
sharp1 y inrree*r!
t;;tse e ~ r - 3 f~s 3t . ? m e + of t h e
5ar~;i;
-. " -.- aV
-.
r';;j.t-ab.iy
m 2 X i r ~ ~ r n ur.i,ce
~2
+ :f. CA~?.::
!??-
i ce5,
~T)~(-~+..S+
2t.r
r?Cj
i.!> 'the
we-c-$4-jintle-.Q ti .snoi
,a~nd~tt_~.p~~~fj4~~-n=j.-F.-r:jI~,gsssr,i~..~p&ft~_ir_t:
01 I and
------------------------------.
---------.--
-.----
RbBSer Price
Ratt o o i
Indiiii
&orid
i a d l z ~~ r s z c
t s %CY I d 9 r i c e
?ear.
{Rs.
----------------.---------
per quintal:
d
--------
C o i ~ n ~Oil
t Price
Ratio af InGiin
Price t u W#r:3
Indian
ilorld
Price
-----------------------------------.----.-----*.----------------------------_______
2
3
----------------.-------------^-----^-----^-^-.--.------.-------.l CbS
333
+*
P, ?Z
196i
333
257
r.15
T-r
l9bZ
~ L J
568
i.2?
1963
525
245
8,31
C 9b4
325
2.34
1.37
li'b5
368
2143
1. $23
d9 ~ ;
59 1
355
l5b7
418
272
isAzg
19&8
9.3h
237
a,3i
!YbF
345
337
:+45
1979
4G '3
J35
:$3
2
.(
-7
,tea
- ..
iwr
i972
1973
l?iP
t 375
1976
17.77
$479
1979
1988
;El1
1932
1.783
1P84
1965
1986
a
44.1
453
3
- JEd
i'
:,I.C
ZL 1
L.78
L'-."
z-e.
7 P3
597
P, 3a
i ,S4
327
422
787
.73
05.3;
UJg
385
1~24
;:sa
-7
648-2
I?.?:
t47:
:672
IbgP
8 674
1bZQ
1766
1950
i81!
--, .,
-.7%
f
33E. i3P
f75.81
5BS. d I
540.88
8.30, B I
538. gg
494.89
439. @is
2.83
3.38
298%
73?.a)%
SSPI
3372,Bg
758,1325
2.31.
2-62
2.33
5.44
5.58
3-96
277
422
53.5
458
143
1883
032
f,gJ
i.t3
733
I802
2~ 9 2
t 34%
34J
Pa8
r, ~ r 5
i, ~9
271.88
298.88
fit;I
2 i
864
i 153
278.88
l7B. 81
.
t!?3
T"148
1563
2432
11556
: va
1758
1898
316.5
l.bY
t.45
S f
i,A .-•
'5139
Sccrce: #or24 Bank 149861, harsyanz G. et.al,
TO&. t;3
245-88
295.88
iUL
"m
1972
i 9%
>,&is
143.314
i 2 l . &8
121,19
IS&.8%
141.tiB
166.88
487
531
G
7
-------------------
1.61
1.95
2.21
2.08
I . 56
2.54
2.11
2.82
1.66
1.84
2.35
2.88
2.93
2.26
1.42
2.43
2.13
2.12
2.89
1.45
2.64
643
*,a
7%':
Ill;
&?z
~ a @
23C
364
284
7
6,?Z
2.9:
1 - i ~
1 41
C- C
- -----.--------------------
?9
b
5
51?99>,
31.
se
6-38. S
U
375.44
575.88
79'r,00
------------------------SnniZ #mi (i9911
ihs i n p ~ r i :!-;?s;+,r.ic+,i~ns
hage r e s u l t e d in the s e w r a t i o n
‘r
and
the Indian damestkc
.
rubbat-.
This
is
eqident
where w h s I e s a l s prices a+
Ko'stz,+acli mirirkets
i n t x n a t ~ o n a l prrces
rlrf
cocanuts and
+ r s m the d3ra prssefitsd in Table iG
caconut u i l
are. ~ ~ ' i r n p a r e dto
=rrkci i " ~ i 3 t %~
:! ~ Cr,;ictit_ 2nd
tht i ntei-n&.i
on&
prices oi
these
coamnditier;;.
The
,uvur and cocanut- ui 1
at Rotterdnc?! i n do1i ~ i - p r . i c e s h a v e been
~ m v w t e d~ r r t o cwee rslcces
rs:uv+nt
by rzsing
sta*-tl~icg.
The results are rather
rates.
quotatiwrs of rutbcr at Kuala
market
f
~
~
i
t
>
exchange
t i
DiM(EZstic ~cv,mutoil
wices have alnsys b ~ w rhic!ner thsn ' z n t w r i i * : i o n ~ lg r i ~ e sb ~ *at
t
!s important to n u k e is chat; t r t c c!i++?wer?serjriJvtt +:ended Co w i d -
m u time.
T h e r a k i o o+ t h e + o r w
2.2 i n the L?bOs,
to
increased to
2.2
i-srio ci: 3.5.
tencied
ireve
>atbr
ths Z?7Cc
if4
a startinqly hroh nrer;yc
rubbev the two pf a c e s that
t o 1 ttre
lwsstic rubser trices e r e
In the? case of
Lcrqeiy close
Zii!ring t h e 1 9 W s t h e
sveFaqte 1.3
~ r aift
and cisring the
mave
53
have d i v e - q e d from the :etc 1(1778;,
')ether
which abwaged
tzcnes h i g h e r than
Vls i n t u v n d t i csnzll p r i c e s .
W.K. .-!w?w2_i-%!! - IPr.lS F5.
P
,!re ?rice
i ~ b c r i :ccemwAit,ies d Kwaia has been
Index ei
rising m.Lv *t eta?i.rd L i ; e
rices in
the
saqe
C G J ~ ~ I - . ~ . &s
rfrt
.--.ix
i?s
.r cent
EI-~SR
dc!i inca t:-a
d i sturery
aecau3e
rsms period,
i GIC)OT-L
ti.s~':ct.
*-?TJ~
the
-he ~i gi;.ts of ctir
s e ~ c - tr
iwwt
r a t e of 0.6
This
i s a rather
p r i c e control i e d commodi tics
dctuted consumebL es account for
?1 p s r cak\t and cide?inLsj-edn&dO r : ~ - o crjmmdi ties, name1v,
rlMucts, grains, wga!.,
1eveL of
th9 cbi-wznailce wC menuJacturEd
05
final i>ruducts ant! ad:nirir s % r k C + - . e + l y
In &fa.; a ' s
arbd 1WF5-8&
inGex q r 9 - a? t;;e ~ Q I - ~ ; I L R ~ L1-I Y
uer annu*
wprising
;)mwal
? I ~ Y ) C T , U ; B S ~ ~orices
P
i + i India qreu
.t 9.3 per c e n t per annu* betv~otl2 5 7 6 - 7 1
rruaoditiee
b e
petrol m m
c w e r ~ tJ C * ~ iran axid steel 71 piiV cent
c.2r?a~di
i:y- pr ici? i r!ciex,
Tne
06
weight of
administrative canl~-.~L
5
05
The
latter
of c w r d i t i e s
grwp
bbt e l s o
ttto
oxtend rtot
gogwn,nsnt
~ r ? i ytc.
price
,onthe
structvw
m d e l i t i w o+ distribut~on. The poZic=y ob~eitivesv m
corrswmers w o~nimwtprice to C a r w s .
a l s o varied betueera cmmaditiss
C3ir price tr
ec,iualisati~s-s
co-
w i t h coarmwlity: intw-state price
The degree
also
2nd
O*
cantrol he#
~ u e ti^
from full
c m t r o l +u partial control to dezcd~r'rel. i t is fiat our intentian
to document the
histwy
c-hequwxS
Iht t h e f o l l e i i n g broad r r w ~ J swv be noted: F i r s t l y , tk
India.
main trend i n
the
recent
Becondly , the resource
mc&i
y.>at-5
o+
accmtuatzon
raise
the
c r - i s s s .r.J' t
ef+icI.~r-,cy
p~btic
evidence that
&tween
p r i c e s grot4
the iniZat-ion
< r a m the
~ c i c r sled.
i97Q-7: and
at 8,&
units.
sect=
frilvc
+r~(1umt
' s e w e r r t i e s is
d
t o a d
2nd -dipto
the
khile
per ar;na*r
t
Thus
73-.we is a g r w i n g body
E S h k kha Jha
19T3&6
i
3
With
essentiir.1 i ; ~ d basic goods haw
Qrsces,
extent administet-+3
19871
c4 these
chcr;.
be
i s e g o b e - r ~ m c l c c tand
hiksre ha'de p r t v e d xv ue tm tempting.
administrative control
to
<he auth~w-itres.
y l f t ~ i r t ~ ~
0 f; t
the riscal
administrative orice
ceased
tw=m-ds decontrol,
tzgn
habe
l i s a t k u r , ~oisibll
i ties +rum requlrtim
has been f - e c e i v i t ) ~qrbater
+,a
~ G s r n i s t r - t r v s pricesin
oi
fhnlle
eon edtninistud
the administered pim
qrei?w at 1-69. :
; per c m t o e [email protected]. Petrsl e.-am products nas t h e I
d
per+waet- k i t h
a 4Zi E s r = e n L
1773-74 and a 1974-
. ~ ~ ~ c ; Y E H - sbE
at-?
75 and 27 per cent yer arbnun price rise between 1W0-81 and 'l*
8;.
id
Bet-?
~ e t -tw:t
ZY'/'@-7;
z?nd :Cir3.-t% petraleucs p r d u c t prices grcw@t
Ir-rn
per irrirbu*.
rrh~sr prices
hn-+e n
q m w a l p r i c a Level.
C ~ ~ l r i i . t t , a and
rs
steel i s anather c m m a d i t y Qrca
ro
4-(.
..
-
the g e n e r a l
.
2 5
ci se
at
a f a s t e r rate thin the
are set
by the
J o i n t Plwt
Inef f i ~ i e n c yo+ steel productim has
increasinql y b
I
m
tc consuews
5
vices.
The r a t e oS rncv.easi'e rjf prices
use o i
goor3e1 t h a t
but
has been
higher in the
ar s n o t rfilrectl y .Jem.mded b y t h e govwnmmt.
;mnt is a comncidity
=tor
i n the +wo of higher
whose
I
grises
%?rqely p r d l i c e d
3
:
-
i n the p r i v e t s
gwet-naent cantrolled until the
cnly 196%. Since d e v e t ! t i I
.&he cemwrr,t
-
that general 1y
prices
w i t h t h e ~ = i v w . i l l& u i e s a l e p r i c e index has tended
wed clo-iy
tr shar~Lymve u ~ w . s + - ddbrrb!?g
~
th:cr d9Skk.
;.See Gr aph 1 0 3
B~kt shzrp tscs:ation ~f tlTzsabove admini s t w e d prices have
bccn
to
a
qraat,
f o d g r a ~ n s-rnd
e:it+nt,
tftet
scgav.
by t h e price behaviour of
~ : e a i ? : r a . L6s-J
ar-c
partial
under
!#kc ~ x r v e e ~ c~f
~ t rain
rdministreti or?.
c a n t r ~ l of t h e
p r i c e s is 04 particuler
-A.
inp~tsr?ce,c . i a ~ n i n gas it does 2& par- cent of t h e
i w w t price
'4s can be seen Cram G r a p o $ 1 , the wrice of
index.
rice has hew, clrise.~.,:
+cr'llw+inq k h ~erho:rr=le
r o w d the
,%id tY70s.
i9Z5-r5a
pw c e n t pec annrlcri
c n i y at:
&hil e
prics
then ~ l s bas tended
SFrzce
reiativeiv siower r a t e than the w h u l e s a l s
1970-71 and
&,i 19 the
The r e a l increcse in the pe-ice
rsst.\e mice
rising
signi.):icantly I m e r
u4
Betweem t378-71 and 1?85-8t,
i.t is
m ? at
~
annkln.
5.33 per
cent per-
insulatsc: +ram market f l u c t u a t i m s
ugwnents would
becduse
rice
rate
+w t-atlsning
,
has be-
then wholesale wares.
prices tenrj~cfi?roe
seen that
~3s
bulk o+
f w di str ibtation f:h.rat-!gh
qovwnment account
The
a
Betweso
a$ r i c e irrcreased
wholesale g r i c e
ration a h a p s ,
et
to rise at a
price index.
6 r i c e impor-ts i n t o K w e l a must have betxi
are on
index unti :
tho who1 esa.1 e price inde* rose st 9 . Z
b.78 per cent.,per annum.
the i~nports
w e ~ g h tof t h e
I . . i
grain
or i CLS
prices.
% r e a!. 50
Tho s a w
also 2 ~ p 3
Z ~ Q~the E m p ~ r tO*~ ~uqet-. LC: t'cck. t h e
'War. Price
increases have been rmsch w e muted i n t h e 1980s.
There is another aspect of the imports oT grains and sugar
!.hat ouuht to be mentioned.
N o t o n l y have the ration prices bean
r i s f ng
at
+-mu
have always b w n 35 to 40 per cent 2~
a s l m rate than the open m a r k e t prices but a l e the
r n other m ~ d there
s
is
a signiiicant al-t
in the major proportian o+ the
KmraS&.
The
twcw
than t h e latter.
d
intwrcrpiarral trade as i n
of s u b s i d y involved
i d g r a i n and
trade
do
not
rt%le?ct
its constructim
the absblute .levelst h a t ars r s l e v c n t .
sugar imparts . i n t o
this
gain of
anly trends and not
Having surveyed
ccMHlroc)ity
wices
the factors
t r y ta
w e shall
like1 y tendencies i n future.
under2y i n g the t r e n d s i n the
i r a ~bras6
in+erences a, tha
Such .an e x e r c i s e
assumes importance
.
._
price r-crforas beinq
in t h e context o C the contemporary t r a d e and
Me shaPl confine
i m p l e t m t t d in t h c country.
possible impact o(: these r e f w m s cm
01s
comments tothe
t h e regional
terms 04 trade
alone.
There is
cmsensce5 un the i n 2 2 a t i o n u y potential of
a near
the rsfora pack-.
i n f l a t i m which
There
to pwsisL
is likely
regional import reqmirement i s
rapid escalatiar~ o+ the
It i s all the
basket is
been
has
iset
'
an
. 'Since
+-om
other
mare so yiven t h e
than
almost the entire
Indian statw a
p r f ce i f i d i c e s is a near certain.
i-t
Tact that
weighted ~ i t f i c o m c ~ b d i t i e swhose
qrcm faster
acceletatim i n thc
the regional impad
prices
are likely t e
t h o general rate 04 inqLstion.
It is claar that
sdffcinsa'cratrve p r i c e
hikes would continue
to be
an irrpw tant s w r c e of resawice ambi2isation i n the future
also.
India's v u l n w s b i l d t y
LiksSy to
intwnational
imrare, A s the -bay
and thwe hss not been
deposit yet.
but
any
crude
p r i c u is
H i g h G i l pruducticm has pHkd
other
similar
large
Jixcnrery oil
F'etroleum prodluct price% ere likely to continus b
r i s e as i n the east pat
movements
to
glso
~5
pnl-f
scc
in
respmse
to
intwnaticmal price
e a s v means of tesout-ce m b i l i u t i m
bnificant
cno
step
t
+ f f i i ~ . ~ t . yof
prWction
steel
and
wmqmnt dampmine of stwl. p?-i.ces are also bleak.
oS
The prices
pt-esew-i c w s r ,
ta persist, ~n iCls
likely
riu rise
than the
impwt
weiw
ipPainr
i;vtwaae s i
into Karr'la is
a+ a relatively slomr
. ~ h @ i c s a l (rdces.
e
F e w I the
I l f u t i v e p r i c e of K w a l a ~w>ot.tsHI L l tend to rise +aster as i t e
b w b d # r c y wr
txxm ~ s r k a Qpirrcttsscs ?rtcr-edses,
gvirmmnt the
- wlta i w d
ybsfdies
-*I1 be
CSlr6ad)c Kar-i..: a's
~wticulerTy A
n
reg
m
6.s
a.. nCT668&
35
r r t ~ o np r i c e s and
vain imports
the prima targets-
dependence m 008n market
poyulrv pressure.
The ~
c
ere s i g n i f i c m t l y hiqhw than
increase 0 9 the f w m r ' s
might in I t e r r l a ' s
~ i l accelw-at@
i
tne r i s e in &+ective q r e i n v i c e
zwi f wh01esaie
P ~ I C E . SO?:
cmtrnue to reamin relatively
qrirbn
true +w t h t +uturc trends i n sugw
'The s m e m i d bold
YMW.
uf
'eighties, drastically reduced
under
w? hav9 m t e d ,
hn
d India to cut down
*he el i ocaticms have often been,
ths S r t c t ~ rhe24 of
dy t o o r yartrslly restw&
rkct p r r c e ,
me
4 h r i d t w buinq
~ncrsabiny.
rurchases has b
kh6 government
prer;+c\re on
f n the new policy
g i c also.
~
exports'. it
On the s i d e of
would
o+ prices
icuyancy
persist
that tho present
is unI i &ely
into
the + u t w t .
?here is
irkely to be a cimm twn I n prices i n the coming )rears given the
tyclic*l
behrviw
brhnate
~ i 6 ) t
o+'
orlces
of
of
many
the products.
of circumstances which +ecilitetsb high ot-icm
tb foreign cswpwt commodities since t h e mtd 197dure
inddrnitaly-
cmsidweble
investment
High
pr iccss
b)rou:d
into d i tima3
The
f~
is ursl i k e l y to
have
attrartud
csoaci t);. creation
04
n
cone
will
which
+ccrititian
into
tri
ccwing
I
c m ~ e ttior,
l
to tradit~annl . F ~ c i q r l e x p w t e ; C c w t
c*mnt:ries
davelaping
~rrrreasi
nq.
z
2
Atrr r.an
East
1
, Tai %new
mcrk e t
t - e l ~ l i v ey'l
ere
KeraIa by
L
c m r are
a
A
x
burden
i1
Irrrcaw.
of t h s w rouncrizs
, corngdslons
cok?rdetit : . . . ~z ,:i
Cmseqcsent?,y
v ~ i u e&
+fie? unit
deva2udt~on04
ir!Orair
the
t o expar!
internatiml
t t ~ e
eicpwts cimsequrnt ub.r~
t--k*.maL
-cks
r~p*.
shoccs elthm- stegnatiun c.r deci i 3;. dut-ing
ta I--&?.
+ro% 1985-8h
anpear k~ fie biedC:l
L P ~ W
S?STS
i i b w a i i s e t , ~ o n . ~t
Lhnt
campeti t l ors
carc
IFthe
i
I
csna
r-urwcik
~acrtil?clir r n a e i f
ccmrmodit~ss
f?srk?
cantentian.
h'ut*&er it:ilrr_rr::s
!T$CPB
t h e most
e+.pbrt c
pe?l.r+,rct~bzr-2
y,
cucone-tts.
protectiw.
ewpoftsfrm
recent ycwr
LScaZe FLafinlnq board IFG3Y
The ~ r o s ~ a c t+L*I
s
and
CjZ
V~;C\S
~ x a c . : - t cmeucli k i s s +or inhi~xhdata is availablr!
gr incigel +oreipn
the t-ubber
11, Iww of quaiit!
. L ~P X M ~ ~ F ? ~ .
t h e n i d 194% there uauib #rot be acny proportirnatr
5~
i n c v e & . s s in
rubber.
Q S C ) market
~ ~
Iik o i y I u i rt~caasap q q i ng dd~unpr-r ces. linl i kc tb
market i, s sl
c.rperiertst
many
ceshr-
. r r - e al'-i;+n a i l t ~ ~ : . r ~ ~ r +
31
?tth~ a
& qrmti~(
.
end cast X q r s E s ' s p r d v c f - s
debt
~i V
bpr
wyicet-,, & l - r t m ! a
r ^ r r s.wr1
in the Cardamom n r r k e k , B r a r - i i acid 1ndwe;;la .?n t h e
and Sr 1
8 t h
etttr x t t s has
. cu~lntt-less i n the
dnd Indrlriesi ans .3 n i h e
ihr
rMt*S.
?)r?~:cme
on
-Z
leash
the
po2icv
rnat
tiie
n l tsl y .
swims
fiave been
i!l
principal crops-
%NO
new
vuhber
i t y prices also
W
m,ioy
reqime
present
&
the recent yeq.rs.
to k m
f?ubb# p r l c e
a + t e r cl i r r t l ? rtq rhe pe&.
in 1985-84 s l c w ~ dd m and on
has incre*.sed o n ? y bv a
c
annum.
t h e tnc
50~io-p0~~tiCC!
e+fectiueIy u&
d 1 per cent per
level mf
+ r a m irvternatiwal
fhs i m p r x t s of
i5we
of imp&.
an a w q c
Similarly the
wholesale
prlre
index
,But
crashed t h e 901'Lwlinq Y e a r .
r e l a t i v e l y bouyent
i i r c o s - b ~ t
~ e a k i n gin 1984
54ter
o i l c.rires have remained
so f ;.r, Apsr~. f t - ~ i n t h e ttirei&
cmccmut e c ~ n a m yf c g o i . 7 3
which
oil
s.:xx?ut
or
to
;see
is l i t t l e rearised todsy-.
c - a ~ ~ to i i have been
O+
Ttre stable denarid
ei-aded due
sLr)+'ly being
grave preblem
@ajar
atnotiter
i ~ u f t t~h e,
c w ~ d i t i o n sfor
to rts prolrnged
Sithin :<erala itself cocmut oil is being
r c l a t i v a I y hiqn p r i c e .
i ncreasinal 9 s u b s t i rut&
b y cheaper ai i s Far cooking and
tc?i
l str-y
The use ob cocmii:- 3 1 i i n soap manu+actur i n g has a1 so
purposes.
been signif l r a n t l y rurtai l e d i n
recent yir;at-+.
further, coconut
production i n other etatss has been rapidly a~pandingundermining
Kerala's
The
t r t~ h e cost of fw~t,r.u'eness
of
Many other i n t e r s t a t e e x p a r t
C
r
have
teen
+acing
f ~ n di t
K w a l a's
r-i
stsgnathon
Ksrala'i; c%lite f Fbrs prciduc9:f ctn
Yarn, woult.
signif icantly
t h s s e new t o r ~ n i : tg v w w s wi 11 also be
p r o d u c t i v i t y of
=ha1 lenge
~ \ o s itctirm.
dominant
and
d i f f Lci;.lt to
high-
a seriws
production.
ties like
b e t e i n u t znd
in prices in recent years.
f ts
products, p a r t i c u i a r l . ~
ccmpete w i t h the cheapw yarn
and rope made f r w fibre eechanicalky e x t r a c t e d f r o m dry w green
h u s k s ~n Tamil Nadu.
The p i c t t w e
+ a i r l y evldsnt.
c u r r e n t rcte o i
O+
the rise in
direction.
w ~ l d
~aiqtain
The prices u+ impart c - d i t i e s
incr-ease, w- e v e n accelerate.
prices
c m . H I ) O d i t i e s appears
the t w m s
that is emerging irgn t h e above discussion is
a+ trade
of
the
inev4teb3e.
of K w a l a
fpreiqn
and
Put a c l e c e l s r a t i o n
inter-s-Lake e x p o r t
C o n s e q ~ ~ t lin
y rhs medium t e r m
are likely
T h e data in Table 7 5h0r)4i,
+-anave
+.~;wr-se
i n ait
in f a c t , that the
k
e
~
af
~ 3
~
trade
r
declined
in
1.18
and 1W30+.
1.m i n 1985-%ad
W e d i d a quick astimate of t:te ratir
further in i.GS in IVf3&-B7.
far 1987-89
to
5984-85
For the 1987-88 the ratio irrprovest~
1-67 but declines tu 0.99 in 2-89,
Kerala scr#ns to have entered a phase of d e t e r i w a t i w t
i n tk
terns of trade which i s 1i k c l v ta.b e marc severe than' that
it may also be t-emmtnwed i n
19Ms.
income e+fgct
to a
Q+
rsgional exports
mitigated
yaws,
cmstraints
drroletian
in
f
the
been
charactwised
various
case of
factws
+west
QF-
ecoPogf cal degradation and l a w productivity
agricui t w a l
e x p a n s i o n c i the
the r a p i d
by
elsewhere the t-eqimal e n p a r t s ,
have
arising
as
~ K ~ U C ~t E
T h.
ms
Isaac
bv
also a deterioration i n i t s incame t w m s
&ass.
duriibt;:
the
as r ~ s w c e
marir~e prOCiuct~:OI
as
In
et.a.l.,
appear t h e t urlllike I n the $9-
89t,
severe srtp~ly
such
d i f f i c u l t to ease thwe constraints in the s h w t
~t wauld
that t f i i r r e d
that took place during t h e earlier pha*.
a5 w e have pointed out
recent
the
deterioration i n barter t e r m s 04 tr+tt m
the
extent
grest
t h i s context
es.?
the
i t is
19921
run.
rase d
TI!~rdre
Keraia is wing t o CKY
of
trade in
It is indeed a bisouietiirig urasoects .Cw-
tncm
the regim far
the near future.
C The present warking paper fwrrrs a part of a larger s t u d y n
trade ana t h e development expcrrisnce of Kwala. The euthws wish
to t h m k 2). Navaya~aand K.N. H a i i a l cm a earlier version 04 h
tm
paper ,3. Srmkrcmar f w .computatianal assistamce and 3. Giri ja fr
typrng s w v i c e 3
1.
F a r a st+.temens o+ the caarnodlty campasiti~na+ Kerela's
e x t ~ v - n a i k g acre r;assSbi&
i n 262 c c ~ r t tfy groups sse t h w e s
Isaac s f i . a l .
c t9Q2:.
Sasical~v. w e have us& the share o i
each c~m~vc.iiit.i/In the '564a2 vwIr!e o i ekports and icttpor tls as
t h e @ e i g h t s +w.r. ti:+celilr-;llaliw?o f the price irrdicas.
Thrwse
i r l t e r ~ 5 t s dirl the Oetail s rjf
the weights ailoteci to tr?e
comk~3fJitzus tn ths d i r 4 e r e - t ~ calculations m a y d < r e c t i y
con: ac :- t h e a - t h o ~ ; .
bpwt Iksket
--.-
I m p w t Szsket
-----**
---I---.-.--.-
$!La
onut a
. i
gonuts
bper
Irr d a m
5inger
ky an
hl p
'I.vmd
EL
Rite
8.
lh
8- G
5
Q. fir)
Wheat
Pu: ses
Sugar
Edible s i Z
ChilLtes
Raw cotkan
Rsui tobacr-u
G
3
m
.
05
8.03
43. i z i
8.U2
F).
P. 03
8, F 5
Raw c-.a.;helr
Petrol-cr,
C e m t
3.i~
ptsctr
ZTM
& stre;
Tubacro a r ~ 3 u c t s
3riq.j5
6.94
C.
8
.'Z2
;37
IIunini,-?ln
8, Q5
iinc
H d s P.: Sicins
43..k
3
.
3
@. 82
711-
0. p.'L
Et~niumJiox3de
P., ;l,l
- ----.-..-
I
-
Electrical g ~ o ~ s
Vet<ir :es
PI. scru #4inb14ac t r - ~ ! - d s
.-.---8 . :;i
-
G,C5
G . b';
3. r : ~
P.UL
0.33
2,Q3
a. ?!I
0.34
3,Z0
i3.423
Z. 01
G. G4
QI ,g.5
.
B.iiI1
Oe8i
W.C?1
C.81
@ above 13 e x p o r t zrrd i m p w il .:u~rnxhties acccnrnted +ar srw.nd
*and 6@ per c e n t
the total w b l t t s <i.j9 ;r(terststc! Q S ~ C J ~ ' a.nd
~ S
iaprrrtr; I r, t975-5& r e-aectb veS y
E Thc;mes Isaac e:.,ai , 19323
.
<,
For a datsi2ed s t a t e w n l c i e k e p s t t e . 1 1 end tt'ends i n
foreign e x p w ts f rm b % r a t a
rjur ~ n q tile past-i ndeoendence
p e r i o d s e e T!1cmz5 Isaac et,a:.
ti9cZbi,
1
themajor 14
com:-a*>di
tzes lisfied i n t:te above paper, w i t h the e x c e p t i o n of
t i aher., h a v e
heen ciwsi d e r d
$ 9 -1 :
cal ric.2a+,i gas. T h o s e
intierested L l r t h e detai l s slay cor>=-act t n e ac..&h=tcs.
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