International Commodity Agreement Meaning In Economics
(1) Non-elastic application. If narrow substitutes are available, market price support for a single commodity will certainly have immediate and significant negative effects. The existence of synthetic rubber explains the total absence of a post-war agreement for the natural product; agreements restricting competition for individual oilseeds are excluded by the existence of a large list of substitute seeds and by competition from butter; But sugar has applied since 1937 for a continuous succession of agreements. Commodity agreements are agreements between producer and consumer countries aimed at stabilizing markets and increasing average prices. Such agreements are common in many markets, including the coffee, tea and sugar market. The United States has completed recent efforts to renegotiate the ICA and the text of the Seventh International Coffee Agreement (ICA 2007) was adopted by the International Coffee Council on September 28, 2007. The new ICA aims to strengthen the OIC`s role as a forum for government consultation, increase its contribution to meaningful market information and market transparency, and ensure that the organization plays a unique role in developing innovative and effective capabilities in the coffee sector. Features of the new agreement include a first advisory forum on coffee-sector finance to promote the development and dissemination of innovation and best practices enabling coffee producers to better manage the financial aspects of intrinsic volatility and risks related to competitive and developing markets. .