Commodity Agreement || what is Commodity Agreement || Forms Of Commodity Agreement

 

Commodity agreement

An international commodity agreement is an undertaking by a group of countries to stabilize trade, supplies, and prices of a commodity for the benefit of participating countries. An agreement usually involves a consensus on quantities traded, prices, and stock management. A number of international commodity agreements serve solely as forums for information exchange, analysis, and policy discussion.

The basic objective is to stimulating a dynamic a steady growth and ensuring reasonable predictability in the real export earning of the developing countries so as  to provide:

·         Expanding  the resource for the economic and social development

·         Considering the stable price for primary  commodities

·         Considering the import purchasing power

·         Increased imports and consumption and also coordination of product    and marketing policies

Forms of commodity agreements

1.      Quota agreement

2.      Buffer stock agreement

3.    Multilateral contracts