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Commodity buffer stock redux: The role of International Cocoa Organization in prices and incomes

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  • Swaray, Raymond

Abstract

This paper utilizes linear demand and supply models, with additive independent shocks, to derive producer price and income variances of a typical commodity during and after a buffer stock control. It proceeds to use the models to evaluate International Cocoa Organization's (ICCO) Buffer Stock's decision to purchase excess stock from the market a floor price and re-sell it, in periods of low supply, at the ceiling price. The results show that cocoa producer prices and incomes were more stable during periods of ICCO buffer stock intervention than after the demise of the buffer stock. The results further indicate that stock-buying operations induced greater stability in producer incomes than buying stock-selling operations.

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  • Swaray, Raymond, 2011. "Commodity buffer stock redux: The role of International Cocoa Organization in prices and incomes," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 361-369, May.
    • Handle: RePEc:eee:jpolmo:v:33:y:2011:i:3:p:361-369
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    Cited by:

    1. Yves Jégourel, 2016. "A chequered African history of commodity markets. Part II: cocoa," Research papers & Policy papers on Commodities & Energy 1604, Policy Center for the New South.
    2. Yves Jégourel, 2016. "A chequered African history of commodity markets. Part II: cocoa," Policy briefs on Commodities & Energy 1604, Policy Center for the New South.
    3. von Arnim, Rudiger & Tröster, Bernhard & Staritz, Cornelia & Raza, Werner, 2018. "Commodity price shocks and the distribution of income in commodity-dependent least-developed countries," Journal of Policy Modeling, Elsevier, vol. 40(2), pages 434-451.

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