Pedagang melihat orang berjubel senang, karena melihat
konsumen bagi barang dagangannya.

Salam,
RM

(Asia Times)  

China and India supply the demand
By Thalif Deen

NEW YORK - China and India, the world's two most
populous nations, will soon be potentially big markets
for a wide range of commodities, like cotton, rice,
coffee, cocoa, palm oil and rubber, which should
translate into a rare boon for the developing
countries that produce them, says a new United Nations
report. 

''Thailand expects its rice exports for this year to
increase by one million tons, to nearly eight million
tons because of strong Chinese demand, earning
revenues of US$2.4 billion compared to $1.9 billion
last year,'' said the 20-page study from the UN
department of economic and social affairs. 

The accelerating demand for rubber from China's fast
developing automobile industry has also created "a
boom" for rubber industries in neighboring countries.
The east Asian giant is also set to overtake India as
the world's leading importer of vegetable oils and is
expected to buy up to 5.5 million tons of palm and soy
bean oil in 2004, up from 4.2 million tons in 2003. 

''India's share of world consumption of major
commodities is relatively modest,'' says the study,
''but China's rapid industrialization has led to it
becoming a major market for most raw materials'',
including copper, iron ore, lead and zinc. 

China and India have a combined population of 2.3
billion people, about 37% of the world's population. A
$100 increase in the per capita income of these two
countries (representing a 10% rise in China and 20%
for India) would translate into about $230 billion in
additional demand for commodities. ''Commodity prices
increased considerably in 2003 and the first half of
2004, particularly for minerals, while prices of
agricultural products rose more slowly,'' the report
added. General economic recovery and the rapidly
increasing demand in Asia, particularly China, were
the main reasons for the increases. 

The study, which will go before a UN committee at the
current session of the General Assembly, scheduled to
end in mid-December, says that over the long term,
increasing Chinese demand for vegetable oils,
particularly palm oil, will benefit Malaysia, which
accounts for half the global production, and
Indonesia, another significant producer. 

According to figures released by the UN Conference on
Trade and Development (UNCTAD), 95 of 141 developing
countries are more than 50% dependent on commodity
exports, including oil. For most sub-Saharan African
nations, the figure is 80%. ''This dependence makes
most countries particularly vulnerable to commodity
market fluctuations and is a real handicap to economic
development,'' UNCTAD said in a report released at a
UN conference in S�0�0o Paulo, Brazil, last June. 

The world's 50 least developed countries (LDCs), "the
poorest of the poor", now depend heavily on
commodities for their economic survival. Since 1997,
the fall in prices of some commodities, including
coffee, cotton and sugar, has been ''dramatic'',
causing large economic losses and increased poverty in
several developing nations. 

According to UNCTAD, about 70% of the world's coffee
supply is provided by smallholders. Coffee growing
supports about 40% of the rural labor force in
countries such as Nicaragua. ''Essentially, depressed
coffee prices have been caused by five consecutive
years (1998-99 to 2002-03) in which total coffee
production has exceeded demand,'' UNCTAD said. 

Phil Bloomer, head of Oxfam's International Make Trade
Fair Campaigns, says: ''Commodity dependence is the
single-most important trade issue for the world's
poorest nations.'' The countries most affected by
plummeting prices are in Africa. Burkina Faso and Mali
depend on cotton, Ghana on cocoa and gold, Kenya and
Malawi on tea and Ivory Coast on cocoa and cotton.
Coffee accounts for 67% of the income of Ethiopia and
79% of that of Burundi. 

But the study says African countries experienced a 10%
annual increase in agricultural exports to China from
1995 to 2002. Anwarul Karim Chowdhury, UN
under-secretary-general for the least developed
countries, says commodities occupy a very important
place in those nations' quest for equitable trading
arrangements. 

The development efforts of most LDCs - 34 of which are
from sub-Saharan Africa - ''can only go forward if
their primary commodities, which traditionally come
from the agricultural sector, generate sufficient
export earnings and employment,'' Chowdhury told IPS.
Besides increasing South-South trade, he said, the
rising demand for commodities from China and India
would provide a much-needed stimulus for the world's
developing and poorer nations. 

In order to assure fair commodity pricing and reduce
their volatility, he argued, there is an urgent need
to reach an effective agreement to allow LDC commodity
exporters to compete on a level playing field with
richer nations. "Assuring LDC producers their fair
share will not only benefit their agricultural sectors
by increased employment savings and reduction of
poverty in rural areas, but will also allow the LDCs
to reinvest any surplus in necessary services and
infrastructure," Chowdhury added. 

The UN study says the importance of the relationship
between commodity production and both the incidence of
poverty and the potential to reduce it is illustrated
by the basic fact that more than two billion people in
the world are employed in commodity production - "and
that the majority of them are poor". 

But the report strikes a positive note when it
concludes, "The coming years may see an unprecedented
opportunity for developing countries to increase
exports of commodities, particularly to other
developing countries, as a result of favorable market
conditions over the medium term, both for raw
materials and for food commodities."

(Inter Press Service)  


 
 


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