Would Bank §aff Commodly Worng oPaper No. 5               AUG 0 3 1987
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The world sugar economy: an econometric analysis of fong-te
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The views and interpretations in this document are those of the author
and should not be attributed to the WorZd Bank, to its affiliated
organizations, or to any individuaZ acting in their behalf.
WORLD BANK
Staff Commodity Working Paper No. 5
November 1980
THE WORLD SUGAR ECONOMY: AN ECONOMETRIC ANALYSIS
OF LONG-TERM DEVELOPMENTS
This paper uses an econometric model to examine the growth pattern
of the world sugar economy during the next decade. The projections are
based on a detailed econometric analysis of sugar demand and production
in major consuming and producing countries. The results indicate that
sugar consumption will grow most rapidly in net importing developing
countries, as per capita consumption in developed, centrally planned and
net exporting developing countries approaches saturation levels. It is
further projected that sugar prices will reach their peak during 1981 and
rise again during the second half of the 1980s. The paper also analyzes
changes in the assumptions that underlie these projections as well as in
the sugar policies of selected countries. It is shown that sugar prices
and trade are positively related to income and thus that healthy world
economy has a greater impact on the world sugar economy than any other
factor.
Prepared by: Jos de Vries
Commodities and Export Projections Division
Economic Analysis and Projections Department
Development Policy Staff
Copyright © 1980
by the International Bank for Reconstruction and Development/
The World Bank
1818 H Street N.W., Washington D.C. 20433 U.S.A.






TABLE OF CONTENTS
Page No.
PREFACE
SUMMARY AND CONCLUSIONS    ...................     ....................  i
I.  THE WORLD SUGAR ECONOMY   ...................................       1
Introduction   ...................................      1
The  Product  ....................................      1
Production   .....................................      2
Consumption   ....................................      3
Tradp .... ......................................       7
The Model ......................................       13
II.  SUGAR CONSUMPTION .........................................       15
Consumption and Incomes ........................       20
Consumption and Prices    .....      ....................  23
The Complete Equations .........................       27
III.  SUGAR PRODUCTION   ..........     ................................  30
Lags in the Price Response    .....     ................  30
The Specification of the Production Equation     ...   31
IV.  PRICES AND MODEL SIMULATIONS    ..............................    41
World Sugar Prices   .............................     41
The Price Equation   .............................    45
Model Simulation   ......      .........................  47
Model Simulation with Dummy Variables    ....   ......  47
V.  SUGAR TRADE   .    ..............................................  50
Explaining Net Trade        ...........................  50
Explaining Gross Trade    .....      ....................  51
The Trade Equations   ............................    53
VI.  PROJECTIONS   .    ..............................................  54
The Initial Projections    .....      ...................  55
The Baseline Projections    .....     ..................  60
The Size of the 1980 Crop    .....      .................  60
A Confidence Interval for Projected Prices     .....  61
The Rate of Income Growth    ......    ................  65
Changes in Sugar Policies ...................... 67
Conclusion ............................--.-. 71
ANNEX I:   BASIC DATA  ...........................                    73
ANNEX II:   MODEL EQUATIONS   ..........       ................. 104



LIST OF TABLES
Table No.                                                           PaRe No.
1  Sugar Production 1954/56 - 1974/76, by Country ....     ......  4
2  Sugar Consumption 1954/56 - 1974/76, by Country ...... ...      6
3  Sugar Exports 1954/56 - 1974/76, by Country .............      11.
4  Sugar Imports 1954/56 - 1974/76, by Country ....      .........  12
5  Sugar - Per Capita Consumption, Per Capita Income and
Constant Income and Price Elasticities of Demand by
Country .........      ......................................  17
6  Sugar Consumption Equations, 1961-77, by Country ....    ....  28
7 Coefficients of Equation 16, by Country ....        .............  33
8  Price Elasticities of Production at Average 1955-1977
Production Levels and at Two Different 1970 Price
Levels, by Country          ....................................  34
9  Coefficients of Equation 21,,by Country ........      .........  39
10  Sugar Prices in Current and in 1970 Real US Dollars,
1951-78 and the International Price Index, 1951-90     ....  44
11  Sugar Closing Stocks, 1975-1977, by Country ....0      ........  52
12  Sugar Price Projections in US¢/lb, 1979-90 ..........   ....   54
13  Initial Projections of Sugar Production and Consumption
in 1990, Assuming a Constant Price Level of US¢10/kg
in 1970 Terms .........................................      56
14  Baseline Projections of Sugar Production, Consumption and
Trade, 1985 and 1990, by Country ......................      59
15  Sugar Price Projections Under Different Assumptions About
the Size of the 1980 World Sugar Crop ....       .............  62



LIST OF CHARTS
Chart No.                                                           Page No.
I   Percentage Change in Country Shares of World Sugar
Consumption and Production, 1954/56 - 1974/76    ......     8
II   Per Capita Consumption and Production of Sugar By
Country, 1954/56, 1964/66 and 1974/76    ....    ..........  9
III   Structure of the Sugar Model    ......... ..    ..............  14
IV   Per Capita Income ana Sugar Consumption, By Country,
1964/66 - 1974/76   .......      ...........................  16
V   World Market Price of Sugar and Sugar Retail Prices,
Selected Countries, 1970-1978   ......................     19
VI   Demand Functions and Income Elasticities of Demand     ...   21
VII   Demand Functions and Price Elasticities of Demand     ....   25
VIII   Annual Percentage Changes in Area, Yield and Sugar
Content of Sugarbeets and in Centrifugal Sugar
Production in the Netherlands, 1962-1972 .37
IX   Commonwealth Sugar Agreement Negotiated Price and US
Preferential Price as a Percentage of World Free
Market Price, 1950-1974 .43
X   World Market Price of Sugar, Actual and Simulated, 1962-
1978 .48
XI   Baseline Price Projection and Projection Confidence
Interval, 1980-1990..                                      64
XII   Price Projections at Different Rates of Income Growth,
1980-1990 .66
XIII   Price Projections and Changes in EEC and USSR Sugar
Policies, 1980-1990 ................................       69






PREFACE
This paper describes an econometric model of the world sugar
economy. The model is used to project sugar supply and demand and sugar
prices, and to simulate the impact of different sugar policies.
The model was constructed as an operational tool, and therefore it has
been kept small and simple so that it can be changed easily and quickly
when circumstances require. The projections are based on data available
as of October 1979. Since then, estimates of the 1979/80 sugar crop
have been further reduced, reinforcing the projections of a substantial
increase in prices in the early 1980s.
The author wishes to thank all those who contributed to the
paper by means of their suggestions and advice. He is particularly
indebted to Malcolm Bale, Choeng Chung, Ronald Duncan, Peter Pollak
and Elton Thigpen who carefully reviewed the paper and made a large
number of useful comments. Valuable suggestions were also received
at the Workshop on Commodity Models and Policies in Aarhus, Denmark
(December 1979). Especially useful were the comments of Mr. H. Bunzel
(University of Aarhus), who reviewed the paper at this workshop.
Of course, any remaining errors are the sole responsibility of the author.
The paper was edited by Whitney Watriss. Naseer Ahmad provided
research assistance, and Felipe Villagran made the charts. Debbie Kreamer,
Anya Sani, Helen Small and Barbara Thompson efficiently and cheerfully
typed the various drafts as well as the final version of the paper.






SUMMARY AND CONCLUSIONS
i.        Sugar prices are expected to increase sharply in the near future.
A price of US¢18/lb is expected for 1980, and a further increase to US¢30/lb
in 1982 (in current terms) is foreseen.
ii.       Since sugar prices are more volatile than those of any other
major primary commodity in international trade, an alternative to projecting
specific prices is to project price ranges. These ranges, calculated by
assuming the same random variations in crops and in consumption for the
projection period as in the past, are as follows (in 1980 constant US¢/lb):
1980   US¢13-26                   1983   US¢14-38
1981   US¢15-38                   1984   US¢11-30
1982   US¢17-46                   1985   US¢ 7-24
The considerable width of these ranges reflects the extreme volatility
of world sugar prices.
iii.      The projections in this paper are made with the help
of an econometric model. If the model and the projected income and population
growth rates were correct, the chance that actual prices would fall within
the price ranges in the previous paragraph would be 95%. However, a model
is only as good as the assumptions on which it is based, and therefore the
model is discussed extensively in this paper before the conclusions are presented.
iv.       The main features of the world sugar economy, which form the setting
for the model, are described in Chapter I. The chapter concludes with a brief
description of the model's structure.
v.        Chapter II  discusses the determination of sugar consumption.    There
are clear differences in the behavior of consumption between the various
groups of countries. The income elasticity of demand has been declining
rapidly in the developed countries as well as in the centrally planned
economies of Europe (including the USSR), and now approaches zero in many
of them. This means that the present sugar consumption of 40-50 kilograms
per capita per year comes close to the saturation level in these countries.



- ii -
vi.       Despite much lower per capita incomes, the per capita consumption
of sugar in traditional net exporting developing countries (mostly in Latin
America) is only slightly below that in developed countries. Nevertheless,
the income elasticity of demand has decreased only very slowly in these
countries. This implies that, at least up to a certain level of income,
the saturation level of per capita consumption will be higher in these
countries, probably because sugar substitutes for other foods as a cheap
source of energy.
vii.      The per capita consumption of sugar is lowest in net importing
developing countries. Here, no decline in the income elasticity of demand
can be found, and consumption in these countries will grow rapidly with
income. Consumption growth will probably be strongest in those countries
that make major efforts to increase domestic production since there is,
at a given income level, a strong positive relationship between per capita
consumption and per capita production in developing countries (mainly because
larger domestic supplies make it easier to keep retail prices down).
viii.     Consumption in net exporting countries is generally unresponsive
to changes in international market prices. In many of these countries
p-roducers first have to supply the domestic market at given prices before
they can turn to the export market, and this process insulates the domestic
price from fluctuations in world market prices. Such a procedure cannot
be followed in net importing countries, however, where at least a part of
the supply has to be bought at the international market price. Therefore,
in net importing countries consumption does react to world market price
fluctuations.
ix.       Consumption in developing countries generally responds even to
very small price changes. In the high-income developed countries, however,
small price changes do not affect consumption very much--consumers can afford
to ignore them. Only when the price becomes very high do consumers start
to cut back their purchases notably. Thus, in these countries the price
elasticity of demand is higher at higher price levels.



- iii -
x.        The observations made on the price and income elasticities of
demand are supported by clear statistical evidence, and lead to different
sets of consumption equations for different groups of countries in the model.
xi.       The determination of sugar production is discussed in Chapter III.
When sugar production falls short of consumption and prices start to
increase sharply, two types of response occur. First, there will be an
effort to increase current production by better fertilization and field
management, and by increasing plantings if the capacity of the sugar factory
and the transportation infrastructure are not yet fully utilized. Thus,
production can, to a limited degree, respond to current prices.
xii.      There will also be a longer term response to high prices by means
of an increase in investments to expand production capacity. Such investments
take two to five years to result in increased production. There turns out to be
little difference between cane and beet sugar production in this respect,
since the investment-production lag is determined by the time needed to
construct the sugar factory and the transportation infrastructure rather
than by the time needed to grow the crop. The short-run and the long-run
price response are incorporated into the model equations by making
production depend on current prices as well as on the prices of two to
five years ago.
xiii.     In the production equation the growth rate of production rather
than production itself is used as the dependent variable. The growth rate depends,
apart from past and present prices, on the production growth rate in the
previous year and on the level of production reached. The growth rate
of the previous year has been included because a high growth rate in that
year (because of, e.g., a bumper crop) will generally be followed by a
low growth rate (return to a more "normal" production level), and vice versa
(crop failure followed by recovery). The level of production is important
because growth rates generally tend to decline when production levels
increase.
xiv.      The determination of sugar prices is the subject of Chapter IV.
Sugar prices can be explained by the prices of the previous year, the



- iv -
excess of supply over demand, and speculative stocks. Speculative stocks
are defined in the model as total world stocks less working stocks, the
latter being assumed equal to four months of world consumption requirements.
xv.       The free market price of sugar has been used as the price to
which both producers and consumers respond. Although domestic prices
often differ substantially from world market prices, and a part of
international trade is conducted under special preferential agreements,
the world market price still represents marginal costs and marginal
revenues to most of the world's consumers and producers.
xvi.      The model gives good results when used to simulate past developments.
The results can be further improved by introducing dummy variables in one
or more of the equations, but since these will not improve the projection
characteristics of the model, they are not used.
xvii.     Once annual projections for production and consumption have been
made, projections for imports and exports can be derived by making some
simple assumptions about stock movements in individual countries and about
the differences between gross and net trade. These assumptions, and the
way in which they are used to derive trade projections, are described
in Chapter V.
xviii.    When projections are made with equations of which the shape and
coefficients are determined solely by past data, not all results can
automatically be accepted. For example, if production in the EEC were
to continue growing at past rates, the sugar surplus would become an ever
increasing burden for the EEC's farm budget, a rather unlikely development.
Similarly, if production and consumption were to continue along past lines,
the import requirements of a number of low-income developing countries
would start to exceed their likely foreign exchange availabilities. There-
fore, adjustments had to be made to some of the equations before a realistic
set of projections could be generated.
xix.      Chapter VI,   the final chapter of the paper, contains the
projections. Assuming population growth rates as projected by the UN and
assuming that the growth rate of OECD GDP will recover from an expected



1.0% in 1980 to 3.5% in 1981-85 and 4.0% in the rest of the decade, the model
implies that sugar prices will increase considerably in the coming two years,
reaching an average of USe30/lb in 1982.   After that, they will decline when
production starts to respond to the price peak of 1982. A new recovery will
start in the second half of the decade.
xx.       Consumption is expected to increase to 102 million metric tons
in 1985 and to 115 million tons in 1990. Over 70% of the increase from
1974/76 to 1990 is likely to occur in developing countries and in centrally
planned Asia. Since these countries accounted for only 40% of world
consumption in 1974/76, the projections imply a large increase in their
relative importance in the world sugar economy.
xxi.      Production is expected to increase at about the same average
rate as consumption, but its development will be somewhat more irregular
as a result of the price-investment cycle.   In response to the high prices
expected in 1981-82, production will increase to 105 million tons in 1985.
After that the growth rate will slow down, and production of around 115
million tons is expected in 1990. Again, the share of developing countries
(including centrally planned Asia) in total world production is likely to
increase, but by less than their share of consumption.
xxii.     Because the consumption projected in developing countries increases
more rapidly than production, their net trade balance deteriorates. Whereas
the exports of developed countries are expected to increase more rapidly
than their imports, reducing their net trade deficit from 6 million tons
in 1974/76 to 2 million tons in 1990, the net exports of the developing
countries (including centrally planned Asia) will decline by over 2 million
tons. The share of international trade in total production remains constant
over the projection period, thus arresting the declining trend of the past
30 years.
xxiii.    Since sugar prices are more volatile than those of any other
major primary commodity a single price projection is of limited value.
Therefore, 500 stochastic projections were made to determine the likely
ranges for future prices. Although these ranges are rather wide, reflecting
the extreme volatility of sugar prices, they are more realistic, and therefore
for most purposes more useful, than single-value forecasts.



- vi -
xxiv.     Although econometric models can be useful in predicting actual
values of production, consumption and prices, their real strength lies
in assessing the impact of changes in one or more of the exogenous
variables. For this they are often the only tools available. The model
in this paper has been used to assess the effects on the sugar economy
of changes in the size of the 1980 crop, changes in selected sugar
policies, and changes in income growth rates.
xxv.      A short crop in 1980 would lead to a stronger and quicker
run-up in prices than predicted, whereas a bumper crop in 1980 would
mean a more moderate price peak occurring later. The interesting
aspect of these projections is that, despite the strong differences
in initial responses, the average price for the whole of the 1980s
is hardly affected. The reason is that the higher the price in the
initial years, the deeper and more long-lived the ensuing depression.
A second interesting point is that large price swings produce a slightly
higher average price over the whole of the 1980s, suggesting that, at
least in terms of average revenues, sugar producers at this moment have
very little to gain from price stabilization.
xxvi.     Most exogenous changes have only a temporary effect on the sugar
economy. This does not only apply to unusually good or bad weather in
a certain year, but also to changes in sugar policies.  In the basic
projections it was assumed that present sugar policies would continue
unchanged. Projections were also made under the assumption that the
EEC would lower its self-sufficiency rate from 110% to 80% over the
next six years, and under the assumption that the USSR would decide to
become totally self-sufficient over the same period. In both cases,
prices would change during the period of adaptation, being higher
in the first case and lower in the second. However, once the adaptation
is completed, prices tend to come back to their long-term trend, and
the only effect that is then left is a change in the volume of world
trade.
xxvii.    Whereas unusually high or low crops and sugar policy changes
generally have only a temporary effect on the sugar market, changes in
the growth rate of GDP can affect the market in a much more permanent
way. A lower rate of income growth would lead to lower sugar prices



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throughout the whole of the projection period (the reverse would hold
true for a higher than projected rate of income growth). At the same
time lower income growth would lead to lower volumes of world trade.
Thus, income growth affects prices and volumes in the same direction,
and the health of the world economy is therefore of more importance
to sugar producers than any of the other factors affecting the sugar
economy.






I. THE WORLD SUGAR ECONOMY
Introduction
1.        This paper has resulted from an effort to develop a framework for
forecasting long-run developments in the world sugar economy. The primary
purpose of the work was not to forecast year-by-year developments in variables
or to analyze them in terms of country differences. This should be kept in
mind when interpreting the results.
2.        This chapter describes the main features of the world sugar economy.
It concludes with a brief description of the structure of the model employed
in explaining and forecasting developments.
3.        Consumption and production of sugar are analyzed in the next two
chapters respectively. In Chapter IV the model is completed bv a price
equation; also included are the results of the simulation. Chapter V
outlines the method used to derive trade projections from the projections of
supply, demand and stocks resulting from the model. Chapter VI discusses
the forecasts made with the help of the model. Annexes contain the
basic data used in the analysis and the model equations.
The Product
4.        Sugar accounts for over 90% of the consumption of sweeteners in
almost every country. Worldwide per capita consumption in 1977 averaged
around 20 kilograms and accounted for about 9% of human calory intake.
5.        Sugar is produced all around the globe.   It is derived from
sugarcane in the tropics and subtropics and from sugar beets in the temperate
zone. Cane and beets are processed into sugar at factories, and the output
is sold to consumers and to industry, where it is used in the manufacturing
of soft drinks, bakery products and other consumer goods. Thus, in almost
every country, consumers, agricultural producers and industry all have a
strong interest in the sugar market. As a result, governmental interference
has been nearly universal.
6.        Sugar, whether derived from cane or beets, is almost pure sucrose.
In the case of cane sugar, juice is extracted from the cane by a crushing
process, and sugar is then obtained from the juice by heating, crystallization



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and centrifuging. The product, raw or centrifugal sugar, is remelted and
purified in refineries to yield refined sugar. In the case of beet sugar,
the beets are cut into slices, juice is extracted by adding hot water,
and, after purification, molasses is spun off, the sugar crystals remaining
in the basket. This process yields refined sugar directly. In their
refined forms, beet and cane sugar are indistinguishable.
7.        Modern cane sugar factories seldom have a capacity of less
than 60,000 metric tons per year. Beet sugar factories have much lower
annual capacities since the beet harvesting season lasts only about four
months, a fact that increases the processing costs of sugar beets relative
to cane. The costs of a cane sugar factory are about US$1,000 per annual
metric ton of raw sugar capacity. The capital costs of the agricultural
component of production and of the infrastructure are around $600-800 per
annual metric ton. 1/ As noted, factory costs are higher in the case of beet
sugar; at the same time, labor costs are also higher and sugar yields per
hectare are lower. Thus, as a general rule, beet sugar cannot compete with
cane sugar without protection.
8.        World average yields of cane were 54 metric tons per hectare in
1974-76. With an average extraction rate of 10%, a hectare yields around
5.4 tons of raw sugar or about 5.0 tons of refined sugar. The cane from
which the juice has been extracted is generally used as fuel for the sugar
mill. World average beet yields were 30 metric tons per hectare in 1974-76.
With an average extraction rate of 13%, about 3.9 tons of refined sugar
(equivalent to 4.2 tons of raw sugar) can be produced per hectare. Spent
beets are used as fertilizer or are mixed with molasses and fed to cattle.
9.        Molasses, a sweet syrupy juice, is a byproduct of both sugar
manufacturing processes. About 3.4 tons are produced for every 10 tons of
sugar. It is used in cattle feed and in the manufacture of yeast, industrial
alcohol, varnish and other products. Over the past two decades it sold for
an average of US$94 per metric ton 2/ in 1980 terms.
Production
10.       Before 1800, all sugar came from cane.   The sugar beet was
developed during the Napoleonic era under the impetus of the continental
1/ 1978 data.
2/ Blackstrap molasses, 79.5° Brix, f.o.b. tankcar or truck, New Orleans.



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blockade. 1/ By now, about 40% of world production comes from beets and
60% from cane. Of the 36 million tons of beet sugar produced in 1977,
30 million came from Europe as a whole, with about 15 million each from
Western and Eastern Europe. The remainder came mainly from North America.
Of the 56 million tons of cane sugar, 30 million were produced in the
Western Hemisphere, 16 million in Asia and about 5 million in both
Africa and Oceania. The total area devoted to sugar production was
around 22 million hectares, 13 million under cane and 9 million under beets.
11.       The volume and growth of sugar production by country is given in
Table 1 (the figures only include centrifugal sugar, as sugar extracted
from sugar cane by other means is not included in the statistics). 2/ The
figures show that the share in world production of each major economic
group has remained fairly stable in the postwar period. Close to 50% of
the world's sugar is produced in developing countries, while a further 30%
comes from developed countries, and the remainder from centrally planned
economies. The largest sugar producing countries are the USSR, Brazil,
Cuba and the US, which together account for one-third of the world's sugar
output.
Consumption
12.       Consumption of sugar depends on incomes, retail prices and, in
most areas, on domestic production. In developed countries, annual
per capita consumption has neared the saturation level of 45-55 kilograms.
The income elasticity of demand in these countries is very low, and demand
does not depend on the levels of domestic production. In developing countries,
however, sugar consumption is strongly influenced by domestic production.
In net exporting developing countries (most of which are in the Western
Hemisphere), consumption generally is between 35 and 45 kilograms per capita.
The trend is upward, and there is little evidence that satiety is being
approached. In net importing developing countries, which are mostly in Asia
1/ For an excellent account of the history of sugar production and trade, see
Roy A. Ballinger, A History of Sugar Marketing, Washington, D.C.: United
States Department of Agriculture, 1971.
2/ This type of sugar, called "non-centrifugal sugar," accounts for less
than 10% of world production in terms of raw sugar equivalents. Over
half of it is produced in India.



Table 1: SUGAR PRODUCTION 1954/56 - 1974/76, BY COUNTRY
Production of Sugar                  Shares in World Total         Produtction Growth Rate  /a
1954/56     1964/66     1974/76      1954/56     1964/66     1974/76       1951-77     1966-77
-------('000 metric tons) ------     -----------(percent)----------     ---(percent per annum)-----
WORLD                               38,888      63.068      82_345       100.0       100.0       100.0          3.7         3.0
Developed Countries               132818      20,621      25507        35.5        32.7         31.0          3.3         2.5
US                               4,347       5,753       5,930       11.2         9.1          7.2          1.7         0.7
Canada                             123         151         125        0.3         0.2         0.2           0.0        -0.8
EEC                              5,956       8,233      10,278       15.3        13.0         12.5          3.0         3.0
Other Western Europe             1,328       2,471       3,540         3.4        3.9          4.3          4.7         4.0
Japan                               60         505         530        0.2         0.8          0.6         12.4        -1.1
Oceania                          1,211       2,174       3,087         3.1         3.4         3.8          5.1         3.0
South Africa                       791       1,335       2,017        2.0         2.1          2.4          5.3         3.3
Centrally Planned Economies        7.278      15.343      16,598       18.7        24.3         20.2          4.1         0.6
USSR                             3,623       8,787       8,409        9.3        13.9         10.2          4.4        -0.9
Eastern Europe                   2,916       4,355       4,222        7.5         6.9          5.1          1.6         0.6
Asia                               739       2,200       3,967         1.9        3.5          4.8          9.0         4.9
Developing Countries              17.810      27105       40.,240      45.8        43.0         48.9          3.8         4.5
Africa                           1,190       2,074       3,344        3.1         3.3         4.1           5.7         4.0
Asia                             4,942       7,970      12,683       12.7        12.6        15.4           4.8         6.0
India                           ,718       3,322       4,857        4.4         5.3         5.9           5.1         5.4
Indonesia                        785         698       1,105        2.0         1.1         1.3           2.0         6.7
Philippines                    1,273       1,611       2,771        3.3         2.6          3.4          3.7         6.5
Taiwan                           763         963         803         2.0        1.5          1.0          0.7         0.5
Thailand                          40         252       1,319        0.1         0.4          1.6         16.3        21.8
Other Asia                       363       1,124       1,828        0.9         1.8          2.2          8.6         3.4
Latin America                   11,678      17,061      24,213       30.0        27.0         29.4          3 2         3.9
Argentina                        726       1,112       1,480        1.9         1.8         1.8           3.3         6.3
Brazil                         2,153       3,949       6,822        5.5         6.3         8.3           5 7         7.0
Colombia                         252         483         933        0.6         0.8         1 1           6.8         4.8
Peru                             651         784         962        1.7         1.2         1.2           2 0         2.7
Other South America              548       1,156       1,754        1.4         1.8          2.1          6 1         2.8
Cuba                           4,719       5,180       6,168       12.1         8.2         7.5           0 5         1.5
Dominican Republic               692         700       1,229        1.8         1.1         1.5           2 6         5 8
Mexico                           893       2,102       2,728        2 3         3.3         3 3           5.6         1.8
other Middle America           1,045       1,595       2,136        2.7         2.5         2.6           3.6         3.3
La  Computed by regressing the logarithlm of production on time    Trhe starting and the eniding year of the second period each
follow by three years the years of record sugar prices of 1963 and 1974 respectively.
Source: Annex I.



- 5 -
and Africa, per capita consumption is very low, often no more than 5 or 10
kilograms. The highest income elasticities of demand are found in those
net importing countries that are rapidly expanding domestic production.
13.       In most net exporting countries, retail prices show little rela-
tionship with the world market price, and there appears to be no measurable
response of domestic consumption to changes in the international price.
However, net importing countries cannot insulate their retail prices that
easily from international price movements, and here clear responses to
changes in world market prices do exist. In developed countries consumption
only reacts when price changes are substantial, while in developing countries
the response is more immediate.
14.       The consumption of sugar accounts for nearly the total consumption
of sweeteners in most countries, with some exceptions. First, in some
countries non-centrifugal sugar is produced from sugarcane for local con-
sumption. Here, total sweetener consumption is underestimated, while the
income elasticity of demand may be over- or underestimated, depending
on whether centrifugal processing has been losing or gaining in importance.
Since no good statistics are available, little can be done to correct for
these possible deficiencies. Second, in the US and Canada, both caloric
and non-caloric substitute sweeteners compete strongly with sugar. Since
1974, caloric substitute sweeteners, mainly in the form of the recently
developed high fructose corn syrup (HFCS), have made heavy inroads in these
markets. Brook 1/ has estimated that the consumption of HFCS in the US
may reach a level of 3.9 million tons by 1985. These substitutes are not
expected to have a significant impact in other markets.
15.       Figures for total sugar consumption by country are contained in
Table 2. They show that, unlike with production, there have been major
changes in the shares of the main economic groups in total consumption.
That of developed countries declined from over 50% in the mid-1950s to just
below 40% in mid-1970s, whereas those of developing countries and centrally
planned economies increased from 29 to 35 and from 19 to 26% respectively
in those same years. By now the largest consumers are the USSR, the US,
Brazil and the People's Republic of China.
1/ Ezriel M. Brook, High Fructose Corn Syrup, Its Significance as a Sugar
Substitute and Its Impact on the Sugar Outlook, Washington, D.C.:
World Bank Commodity Paper No. 25, 1977.



'Iable 2:  SIIGAR CONSUMPTION 1954/56 - 1974/76, BY COUNTRY
Consumption of Sugar               Shares in World Total           Consumption Growtb Rate /a
1'54/56     1964/66     1974/76      1954/56    1964/66      1974/76       1951-77     1966-77
-------('000 metric tons) ------     -----------(percent)-----------    ----(percent per annum)---
WORLD                               39_444      59,056      79,814      100.0       100.0       100.0           3.7         2.8
Developed Countries               20,960      26.744      31,433       53.1        45.3        39.4           2.3         1.1
US                               7,881       9,309       9,822       20.0        15.8        12.3           1.4         0.2
Canada                             730         916       1,002        1.8         1.6         1.2           2.1         0.2
EEC                              7,738       9,663      10,684       19.6        16.4        13.4           1.8         0.2
Other Western Europe             2,230       3,322       4,621        5.6         5.6         5.8           4.0         2.9
Japan                            1,111       1,939       3,105        2.8         3.2         3.9           6.0         3.6
Ocean ia                           675         808         980        1.7         1.4         1.2           1.8         1.8
SoVuth Africa                      596         825       1,220        1.5         1.4         1.5           3.3         4.9
Cencruilly Planned Economies       7.346      15,141      20,862       18.6        25.6         26.1          5.3         3.3
USSR                             4,185       9,309      11,518       10.6        15.8         14.4          5.1         2.6
Eastern Europe                   2,267       3,299       4,614        5.8         5.6          5.8          3.7         2.8
Asia                               897       2,524       4,730        2.3         4.3          5.9          9.3         5.6
Developing Countries              11,137      17,172      27,519       28.2        29.1         34.5          4.7         4.6
Africa                           1,579       2,462       3,899        4.0         4.2         4.9           4.8         4.7
Asia                             4,471       6,772      10,791       11.3        11.5        13.5           5.0         4.6
Tndia                          2,034       2,811       3,888        5.2         4.8         4.9           4.0         4.0
Indonesia                        585         594       1,287        1.5         1.0         1.6           4.0         8.3
Philippines                      271         520         881        0.7         0.9         1.1           5.9         5.1
Taiwan                           107         141         304        0.3         0.2         0.4           5.5         6.6
Thailand                          65         178         539        0.2         0.3          0.7         10.5        10.9
Other Asia                     1,405       2,537       3,892        3.6         4.3         4.9           5.6         3.3
Latin America                    5,086       7,937      12,829       12.9        13.4         16.1          4.6         4.6
Argentina                        665         852       1,059        1.7         1.4          1.3          2.1         2.0
Brazil                         1,903       2,776       4,886        4.8         4.7          6.1          4.6         5.7
Colombia                         223         390         788        0.6         0.7          1.0          6.3         7.7
Peru                             197         336         550        0.5         0.6         0.7           4.8         5.4
Other South America              613         975       1,427        1.6          1.6         1.8          4.5         3.5
Cuba                             241         478         518        0.6         0.8          0.6          3.7        -2.2
Dominican Republic                56         108         168        0.1         0.2          0.2          5.3         4.3
Mexico                           872       1,485       2,540        2.2         2.5          3.2          5.4         5.1
Other Middle America             317         535         893        0.8         0.9          1.1          5.1         5.2
/a Computed by regressing the logarithm of consumption on time. The starting and the ending year of the second period each
follow by three years the years of record sugar prices of 1963 and 1974 respectively.
Source: Annex I.



-7-
Trade
16.       The share of production that enters international trade has
continuously declined in the postwar years. In the mid-1950s, about
40% of world production was exported, whereas in the mid-1970s the figure
was only about 25%. The decline is directly related to the changes in
the geographical distribution of consumption and production over this
period, which have been illustrated in Chart I. In this chart changes in
a country's share of world production over the past two decades are
measured on the vertical axis and of consumption on the horizontal one.
If a country's position is to the right of the 450 line its share in world
consumption has grown faster (or decreased more slowly) than that in
world production, and its exportable surplus has decreased (or its import
requirements have increased). For positions to the left of the 450 line
the reverse holds true. The magnitude of the change in trade position
is proportional to the distance to the 450 line.
17.       Chart I shows that by far the largest shift in world trade was
due to changes in the developed countries. Their share of world con-
sumption declined much more strongly than that of world production, and
their net import requirements declined drastically--they even declined
in absolute terms, from 7.5 million tons in the mid-1950s to about 5.4
million tons 20 years later. The opposite development occurred in the
centrally planned economies, but the increase in their import requirements
could not make up for the decrease in those of developed countries, and the
net effect 1/ was a reduction in the exportable surplus of developing
countries and a consequent reduction in international trade as a percentage
of world production.
18.       Whereas Chart I looks at changes in the worldwide distribution
of production and consumption, Chart II looks at the changes in the trade
positions of individual countries. In this chart, per capita consumption
appears on the vertical axis and per capita production on the horizontal
one. Points to the left of the 450 line imply that consumption exceeds
production and that the country is a net importer. The reverse applies
1/ All shifts together of necessity add up to zero. For example, adding the
coordinates of the developed countries, centrally planned economies and
developing countries gives the coordinates of the position of the "world",
i.e., the origin of the chart.



- 8 -
CHART i: PERCENTAGE CHANGE IN COUNTRY SHARES
OF WORLD SUGAR CONSUMPTION AND PRODUCTION, 1954/56-1974/76.
%CHANGE IN SHARE OF
WORLD PRODUCTION                    ,
DECREASING INIPORTS   /
OR INCREASING EXPORTS /
6                  -
//
4-
BRAZIL   /
°  0 /            0 LDCs
2_ AFRICA f<ASIA LDCs
INDIAG  L4Cs/                    0 CPEs
%CHANGE IN SHARE OF VORLD CONSUMPTION            /  MEXICO    USSR
_   I  I      I                             DI I   I        Jd         tI
-12    -10     -8     -6     -4     -2     /        2      4       6      8      10
/e             LATIN AMERICA
-2-
*EEC        /
Gus                      -4-
* DCs                          Ro                * CUBA
_-6-
/ DECREASING EXPORTS
OR INCREASING IMPORTS



CHART II: PER CAPITA CONSUMPTION AND PRODUCTI0N OF SUGAR BY COUNNTRY,
1954/56, 1964/66, AND 1974/76. *
54 
PER CAPITA
CONSUMPTION                                                  v
48 -   iCG}                   X    7     USSR
/     US                    /                     BRAZIL
42 -/                                   Cs\      EEC /   E   XICO
/'                              LATIN AMERICA
24t  \   X    @/                        g -~~~~~ C\EXHLIPINS
36                                       / AFRIOA  /  SCs  1964/66      PERU
1236/                      o   /                               1X   6 
JAPAN                            CA /
24  -                                                    or  -
/                                            ~~~~~~~~~~~~~~~~~~PH ILIPPINES
/  /         -~~~~~~~~~~~~~~~~~~~97/7
Qely                   ~~~~~~1964/66
/AFRICA  /    LOCs
12    /   ~~LDCs 
/   SIA                                           1954/56
/  ~/AA  DCs..
6      12     13     24     30      36     42     48     54      60     66      72
PER CAPITA PRODUCTION (KG)
*Points refer to periods in the direction of the arrows.     As an example periods have
been indicated for the Philippines (lower right hand corner).



- 10 -
to points to the right of this line. For each country its positions in
1954/56, 1964/66 and 1974/76 are indicated.
19.       As long as a country moves along a line through the origin its
self-sufficiency ratio--production over consumption--remains the same.
If it deviates from this line in the direction of the 450 line its self-
sufficiency ratio moves closer to 100% and the relative importance of
trade diminishes. The latter has been the case for most areas, with Brazil
and Mexico in 1954/56 - 1964/66, and Japan and the USSR in 1964/66 - 1974/76
the only clear exceptions. Again, the overall decline in the relative
importance of trade is evident.
20.       A summary of world sugar exports is contained in Table 3.    As
can be seen, developed countries and centrally planned economies together
accounted for only about 25% of world exports in the mid-1970s. Moreover,
a substantial proportion were re-exports. By far the largest exporter among
the developed countries was Australia (the sole exporter in "Oceania")
which in 1974/76 accounted for 10% of world exports. It was followed by
the EEC (6%), whose exports consisted mainly of re-exports of sugar imported
from the ACP countries. The other large net exporter among the developed
countries was South Africa, at 4%.
21.       About 75% of world exports in the mid-1970s came from developing
countries, with the developing Americas alone accounting for about half
of world exports. The largest single exporter is Cuba, which in 1974/76
supplied one-quarter of world import demand. The second place, occupied
for a long time by the Philippines, was recently taken over by Brazil,
where production has grown very rapidly. The remainder of world exports
comes from a large number of developing countries in all parts of the
world and at all stages of economic development.
22.       World sugar imports are summarized in Table 4.    In the mid-1970s
developed countries accounted for around 55% of world imports. The US was
the world's largest importer, purchasing 20% of all sugar in the inter-
national market, followed by Japan at 12%. The EEC was also a large importer
(10%), but it re-exported most of its imports. The centrally planned economies
accounted for over 20% of world imports, most going to the USSR. The remaining
25% of world imports went to developing countries, mainly in Asia and Africa.



Table 3: SUGAR EXPORTS 1954/56-1974/76, IBY COUNTRY
Exports of Sugar                  Shares in World Total           Export Growth Rate    /a
1954/56     1964/66      1974/76     1954/56     1964/66      1974/76   1951-77         1966-77
-----('000 metric tons) --------     -----------(percent)----------     --(percent per annum)--
WORLD                              14,036      18.504       21,638     100.0       100 0        100.0         2 4             2 4
Developed Countries               3,020       3.648       4,587       21.5        19 7         21.2         3.0             5 1
Us                                 39           3          III        .3          .0           .5        -5.0           42.3
Canada                              1          17           61        .0           1            3          -            17 7
EEC                             2,058       1,587        1,233      14.7         8.6          5.7        -1.5            5.7
Other Western Europe               34         150          164        .2          .8           .8         b.2            4.5
Japan                              25           2           43        .2          .0           .2          -             16 7
Oceania                           655       1,349        2,142       4.7         7.3          9.9         7.4            4.1
South Africa                      209         539          832       1.5         2.9          3.8        11.5            4 1
Cenitrally Planned Economies      1.063       2.513          649       7.6        13.6          3 0          .0           -16 9
USSR                              215         776           85       1.5         4 2           .4        - .9           -35 5
Eastern Europe                    838       1,251          501       6 0         6 8          2.3        -1.0           -8 5
Asia                               10         487           63        .1         2.6            3         9.0          -21.2
Developing Countries              9,947      12,342       16,403      70.9        66.7         75.8         2.4             3.6
Africa                            668       1,037        1,151       4.8         5.6          5.3         3.1             1.9
Asia                            2,079       2,897        3,938      14.8        15.7         18.2         3.0             6 9
India                           -            55          792        -          1.8          3.8          -            10.0
Indonesia                       195          81          -         1.4           4           -           -               -
Philippines                     949       1,101        1,385       6.8         6.0          6.4         2 6             5.7
Taiwan                          617         826          491       4.4         4.5          2.3        - .6            -2.4
Thailand                        -            55          792        -            .3         3.7          -               -
Other Asia                      318         507          436       2.3         2.7          2.0         1.6            - .7
Latin America                   7,200       8,408       11,314      51.3        45 4         52.3         2 1             2 7
Argentina                        28          53          383        .2          .3          1.8          -             22.7
Brazil                          251         697        1,762       1.8         3.8          8.1        13.6            8.0
Colombia                         29          80          142        .2           .4          .7          -               -
Peru                            444         416          389       3.2         2.2          1.8          .0            - .7
Other South America             255         347          470       1.8         1.9          2.2         3.0              .4
Cuba                          4,755       4,642        5,666      33.9        25.1         26.2          .3             1.6
Dominican Republic              617         585        1,010       4.4         3.2          4.7         2.3             6.1
Mexico                           62         515          242        .4         2.8          1.1          -               -
Other Middle America            758       1,072        1,250       5.4          5.8         5.8         3.1             2.1
/a   Computed by regressing the logarithm of exports on time.    If there were no exports reported in one or more of the years
concerned, no growth rate was computed.   The starting and ending years of the second period each follow by thlree years
the years of record sugar prices of 1963 and 1974 respectively.
Source: Annex I.



Table 4: SUGAR IMPORTS 1954/56-1974/76, BY COUNTRY
Imports of Sugar                   Shares in World Total           Import Growth Rate    /a
1954/56     1964/66      1974/76     1954/56     1964/66      1974/76   1951-77        1966-77
------('000 metric tons) -------     ----------(percent)------------   --(percent per annum)--
WORLD                              14.012       17,969      21.456      100.0       100.0       100.0          2 4            2.5
Developed Countries               9.708       10,809      11,961      69.3         60.2        55.8         1.0              .9
US                              3,694        3,675       4,331      26.4         20.4        20.2         1.2              .5
Canada                            622          784         976       4.4         4.4          4.6         2.8             1.5
EC                              3,349        3,410       2,132      23.9         19.0         9.9        -2.8            -3.8
Other Western Europe              879        1,266       1,642       6.3          7.0         7.6         2.6             2.3
Japan                           1,047        1,463       2,637       7.4          8.1        12 3         5.2             4.8
Oceania                           118          152         204         .8          .8         1.0         2.7             3.5
South Africa                      -             58          39         -           .3          .2          -               -
Centrally Planned Economies         938        3.196       4,662       6 7         17.8        21.7         9.7             4.9
USSR                              630        2,008       2,951       4.5         11.2        13.8         8.5             7.0
Eastern Europe                    137          510         904        1.0         2 8         4.2        14.5             1.3
Asia                              171          677         807       1.2          3.8         3.8        10.8             2.4
Developing Countries              3,363        4.038       4,836       24.0        22.0        22.5         2.7             3.8
Africa                          1,087        1,612       1,859        7.8         8.7         8.7         3.0             3.5
Asia                            1,869        2,179       2,727      13.3         12.0        12.7         3.3             3.8
India                           467          -           -         3.3          -            -           -
Indonesia                       -              8         121        -            -           .6          -             15.7
Philippines                     -            _- _
Taiwan                          -           --           -          -            -           -           -
Thailand                         20          -           -           2           -           -           -               -
Other Asia                    1,380        2,172       2,606       9.8         12.0        12.2         3.6             3 1
Latin America                     407          247         250        2.9         1.4         1.2        -1.6             4.7
Argentina                       -            -           -          -            -           -           -
Brazil                          -            -           -          -           -            -           -               -
Colombia                        -            -           -          -            -           -           -
Peru                            -            -           -          -            -           -           -               -
Other South America             369          226         220       2.6          1.3         1.0        -1.8             3.7
Cuba                            -            -           -          -            -           -           -
Dominican Republic              -            -           -          -           -            -           -
Mexico                           11          -           -           .1          -           -           -
Other Middle America             28           21          29        .2            1          .1         2.4             7.4
/a  Computed by regressing the logarithm of imports on time.    If there were no imports reported 1n one or more of the years
concerned, no growth rate was computed.   Thie starting and the ending years of the second period each follow by three years
the years of record sugar prices of 1963 and 1974 respectively.
Source: Annex I.



- 13 -
23.       About 25% of international trade occurs under special arrangements
which insulate it from the free market. The EEC imports about 1.4
million tons of sugar from the ACP countries at prices which in 1978/79
were more than double the world market price, and the USSR and Eastern
Europe provide a guaranteed market for part of Cuba's sugar (at unknown
prices). Until 1974, trade with the US was also conducted at preferential
prices, but this arrangement has since lapsed.
24.       World trade in sugar is regulated under the International Sugar
Agreeridit, 19/8, whicii Lries to keep prices within a range of US¢11-21
a pound through a system of export quotas and buffer stocks. As of October
1979, the arrangements were not yet fully operative because the US had
not yet ratified the agreement. In addition, its effectiveness has been
impeded because the EEC as well as many developing importing countries have
not acceded to it and because initial quotas were set too high relative
to import demand.
The Model
25.        The model of the world sugar economy whclh Is detailed in the
following chapters has been constructed for medium- and long-term forecasting.
Its basic structure, represented in Chart III, is very simple. Four equations--
for production, demand, export and import--were developed for each of the
26 countries 1/ in the model. The demand equations (Chapter II) and the
production equations (Chapter III) were linked together by a world market
price equation (Chapter IV) in a simultaneous equation system. The export and
import equations (Chapter V) were "tagged on" to the model at a later stage.
26.        The production and the consumption equations in the model are all of
a similar structure and use similar lags for the price variables. This similarity
was planned, as it was believed that equations of a similar structure and with
similar lags should apply to all countries unless there were good reasons to
differentiate them (like the systematic differences in equation performance
found in the case of sugar consumption). Time series for almost any single
country are too unreliable to allow derivation of the appropriate equation structure
and lags. However, by running different types of equations for all countries
and by comparing their overall performance, a more reliable estimate of the
equation structure and of the length of the lags can be made.
1/ In the model 17 individual countries and 9 groups of countries have been
distinguished. Both individual countries and groups of countries are
referred to as "countries" in this paper.



CHART III: STRUCTURE OF THE SUGAR MODEL
(ENDOGENOUS VARIABLES ONLY)
|  Sugar Imports  | imzu                            Conrlyu
and Exports   for all other 
u S         CountrCeso                               r
Sugar ProdJuction                                                                           _    Sugar Consumption
Sugar Production                                                                                 Sugar Consumption
Canada         _                                                                                  Canada    
Sugar Production                                        |-|Suqar Consum1ptiont
l                 ~~~~~~WOR LD                               WOR LD
OthrMiddle AmcSugar                                                  Sugar
!  Production            _                Consumption                          a     2
26 Countries      _                                                                               26 Countries
in Total                                                                                          in TotalI
i                .         W     ~~~~~~~ClHIAlNGE IN 
Sugar Production   _r                                                                            Sugar Consumption   L
Mexico                                                                                            Mexico
Sugar Production   _                                                                             Sugar Consumption    _
Other Middle America                                                                              Other Middle America  _
World Bank -21639



- 15 -
II. SUGAR CONSUMPTION
27.       The consumption of sugar, like the consumption of most commodities,
can be related to incomes, prices and domestic production. The first
two variables are important in time series analysis. The third, in the form
of per capita production ot sugar, is mainly of use in cross-section
analysis, where it can be applied to explain why at equal.levels of per
capita income, the highest levels of per capita consumption are reached
in traditional sugar-surplus areas.
28.       Per capita consumption of most agricultural commodities can reach
saturation. Sugar is no exception. At low levels of consumption, the
elasticity of consumption with respect to income is high. It stays constant
for some time and then starts to decline more and more rapidly. Eventually,
it will become zero, or possibly even negative if substitutes become
available.
29.       The relationship between real per capita income and per capita
consumption is illustrated in Chart IV.    For each country its positions
in 1964/66 and 1974/76 have been indicated (the latter is invariably to
the right of the former since real per capita incomes increased in all
countries). A curve representing the "average" relationship between
income and consumption has been drawn in by hand.
30.       A numerical illustration of the relationships that determine
per capita consumption can be found in Table 5. The price and income
elasticities in the table were determined uniformly by estimating the
equation:
log CCAP = a + b log YCAP + c log P-1         (1)
where
CCAP - per capita consumption in kilograms
YCAP = per capita income in thousands of US dollars
P = the free market price of sugar deflated by the Index
of International Prices (1970=100).
The equation has been estimated solely for the purpose of deriving average
price and income elasticities for the period 1960-77. It cannot, of course,
be used for forecasting, since elasticities may change over time.



CHART IV: PER CAPITA INCOME AND SUGAR CONSUMPTION, BY COUNTRY, lc64/66 - 1974/76
CONSUMPTION
PER CAPITA
(KG)
SOUTH AFRICA    OCEANIA
40                       BRAZIL                              CANDA
WESTERN EUR.
EASTERN
30                       t               - U ROPEI
COLOMBIA    PER     OTHER SOUTH AM.
OTHER MIDDLE AM.
PHI'!PP INES
20
INDI  I O               TAlILAND
ASIACPS
200          500      1,000                 5,000     10,000
REAL GDP PER CAPITA (USS)



- 17 -
Table 5: SUGAR - PER CAPITA CONSUMPTION, PER CAPITA INCOME AND
CONSTANT INCOME AND PRICE ELASTICITIES OF DEMAND BY COUNTRY
Consumption   Production               Income       Price
Country                   of sugar     of sugar    Income    Elasticity   Elasticity
1974-1976     1974-1976    1975    of demand     of demand
(--------Kg/cap--------) US$/cap
US                              45.9           28         7,079     .09          -.056
Canada                          43.9            5         6,824     .21         -.077
EEC                             41.3           40         5,209     .22          -.044
Other Western Europe            43.6           33         3,673     .80          -.048
Japan                           28.0            5         4,392     .65         -.086
Oceania                         46.3          146         4,562      -             -
South Africa                    49.4           82        1,399      .29
USSR                            45.2           33         1,902     .34            -
Other Eastern Europe            42.5           39         2,512     .51         -.036
Centrally Planned Asia           5.6            5          367     1.64         -.117
India                            6.3            8          147     1.31           -
Indonesia                        9.5            8          223     1.18         -.036
Philippines                     19.9           62           353    1.43          -.006
Taiwan                          19.0           50           921     .73         -.006
Thailand                        12.8           31           344    1.94            -
Other Asia                       8.8            4           579     .60         -.125
Argentina                       41.7           58         1,840     .22            -
Brazil                          44.5           62           995     .41            -
Colombia                        30.4           36          524     1.60            -
Peru                             35.8          63           807     .90            -
Other South America             34.0           42         1,178    1.06         -.039
Cuba                            54.6          651         1,151      -          -.176
Dominican Republic              32.9          240           705     .43         -.050
Mexico                           42.9          46         1,336     .68            -
Other Middle America            27.9           67           938     .94            -
Africa                          12.2           11           417     .78          -.021
Note:  The elasticities are derived from constant elasticity functions (equation 1)
and therefore represent period averages only. They have not been used in
the model.



- 18 -
31.       A number of global conclusions can be derived from the chart and
table. Not surprisingly, there is a negative correlation between the income
elasticity of demand and the levels of both income and consumption. At the
same time, there is a positive correlation between the level of per capita
consumption and that of per capita production. This relationship exists
because most net sugar exporters are able to enforce very low retail prices
domestically. Therefore, once production starts rising in a country that is
not self-sufficient, consumption generally starts to increase at a much fas-
ter rate than before. This response explains, for example, the high income
elasticities of demand found in Colombia and Thailand.
32.       The low values of the price elasticities of demand reflect the
tendency of domestic prices to fluctuate a great deal less than the world
market price. This is illustrated in Chart V. Even in those countries
where retail prices fluctuate strongly (Japan and the US in the chart) the percen-
tage changes are much less than those in the world market price. 1/ Unfor-
tunately, however, good retail price series are not available for most coun-
tries, and therefore retail prices were not used in the model.
33.       Chart V also suggests why it is that all countries for which the
price elasticity of demand as measured by equation 1 showed the wrong sign
are, with only one exception, 2/ net exporters of sugar. Whereas a net
importing country of necessity experiences an increase in the cost of sugar
when world market prices increase, a net exporting country does not. Thus,
governments in such a country are better placed to keep the price to consumers
from changing, and the stable retail prices of sugar shown in Chart V for
Australia and India are good examples. However net exporting countries are
not obliged to insulate retail prices from world market price fluctuations,
and there are net exporting countries where consumption responds to world
market prices in the traditional way.
1/ Over the period in the chart the annual average retail price change was
17% in Japan and 29% in the US, whereas the annual average change in the
world price was 62%. Changes in each year were measured using the lower
of the two prices as a base to avoid underweighing downward changes.
2/ The exception is the Soviet Union. Consumption would show a negative
price response if the last two figures were omitted. Those two (12
million tons flat for both 1976 and 1977) are ISO estimates for lack
of actual data.



CHART Vs WORLD MARKET PRICE OF SUGAR AND SUGAR RETAIL PRICES,
SELECTED COUNTRIES,1970-1878
US /lb      60
WO.RLD
-.Us
-- JAPAN
- - -INDIA
. AUSTRALIA                                                   Japan
40-                                 / 
-  /                           ~~~~~~~~~~~~us
~~~ _ _ _ ~~~~~~~~~~~World
0-        187                        1S      887            8 I
2S0     I81    17       33    17       85    17      87     17



- 20 -
Consumption and Incomes
34.       This section discusses the relationship between consumption and
incomes, whereas the subsequent section will discuss the relationship
between consumption and prices. Of course, these relationships have to be
measured simultaneously. Therefore, although they are discussed separately,
it should be kept in mind that the results reported were derived by esti-
mating the complete equations. Thus, elasticities in both sections always
refer to partial elasticities.
35.       Various types of equations can be used when forecasting consump-
tion based on incomes and prices. As far as the relationship of consump-
tion to income is concerned, four types of equations are common:
log C = a1 + b1 log Y                          (2)
log C = a2 + b2 /y                             (3)
C=a3 +3        g                           (4)
C = a4 + b4 Y                              (5)
In these equations C and Y can refer either to per capita or total con-
sumption and income respectively, resulting in eight different types of
equations.
36.       The demand functions implied in these equations are shown
in the top section of Chart VI. To increase comparability the coefficients
were chosen in such a way that each curve passed through the point (1, 1). 1/
1/ The demand functions in the chart represent the following equations:
Yl : log C = log Y                   (example of equation 2)
Y2 : log C = 1 - (1/Y)               (example of equation 3)
Y3 :      C = 1 + log Y              (example of equation 4)
Y4a:     C = -1 + 2Y                 (example of equation 5)
Y4b:      C = 0.5 + 0.5Y             (example of equation 5)
Each equation goes through point (1, 1) and has an elasticity of one in this
point. The only exception as far as the elasticity is concerned is the two
examples of equation 5. Actually, there is an example that yields a unit
elasticity in point (1, 1), but this example coincides with curve Yl. Therefore,
two examples of equation 5 were chosen, one with an elasticity greater, and
one with an elasticity smaller than unity in point (1, 1). Because of the
coefficients chosen, looking at what happens when income grows from the unit
level gives a good idea of the assumptions about consumer behavior implied in
the different consumption equations in the text.



- 21 -
CHART VI: DEMAND FUNCTIONS AND INCOME ELASTICITIES OF DEMAND
DEMAND
2-
/Y2 aX                 2                3   INCOME
INCOME                                                3
ELASTICITY
OF DEMAND  Y2Y3  Y4a
2-
ZY4b                                   ~~~~~~~~~~~~~~~~Y2
I                                      INCOME
1                2                3



- 22 -
The income elasticities of demand corresponding to these demand functions
are given in the bottom section of Chart VI. In equation 2 (Yl), the income
elasticity of consumption is constant. In equations 3 (Y2) and 4 (Y3) the
income elasticity of consumption declines, but in the first case it approaches
the zero level fairly rapidly, whereas in the second case a sizeable
positive value is maintained for a long time. Equation 4 (Y4) involves
an income elasticity of demand tending toward unity, suggesting a declining
elasticity when demand is income-elastic to begin with and an increasing
elasticity in the reverse case.
37.       If the first three equations are estimated with total income
and total consumption as the variables, a rapidly declining elasticity
(equation 3) gives the best results (in terms of R-squares and t-values)
for countries in Europe and North America, while equation 2 (constant
elasticity) performs best for almost all developing countries, although
equation 4 (slowly declining elasticity) does give marginally superior
results in some. When per capita consumption and income are the variables,
equation 3 (rapidly declining elasticity) again performs best for Europe
and North America, while now equation 4 (slowly declining elasticity) is
superior for virtually all developing countries.
38.       The choice between the use of total and of per capita figures
is a matter partially of theory and partially of "convenience". Equations
using per capita consumption and income variables are preferable from a
theoretical point of view. However, in some cases an equation using total
consumption and income can be more attractive because in such equations the
income elasticity of per capita consumption can actually reach zero and even-
tually become negative. Such a development occurs in certain high-income
countries where concern about diet and the development of substitute sweeteners
can only lead to a decline in the per capita consumption of sugar, since per
capita consumption of total sweeteners already closely approaches saturation.
39.       Based on the above arguments, it was decided that equation 3
(rapidly declining elasticity) when applied to total consumption will give
the best results for the developed countries (including Eastern Europe
and the USSR). The only country in this group where per capita sugar
consumption is still relatively low is Japan (29 kilograms in 1977, versus over



- 23 -
40 kilograms in all other countries in this group). As of yet, its rate
of growth is not showing a sharp decline. Nevertheless, if extrapolated
into the future, past growth rates will lead to unreasonably high per
capita consumption figures. Therefore, just as for Europe and North America,
equation 3 was used, but was applied to per capita rather than total con-
sumption.
40.       In developing countries, development of high-technology substitute
sweeteners and dietary concerns are not expected to have any major impact
on the demand for sugar over the forecast period. Therefore, there is no
need to use an equation that allows for complete stagnation or even a
decline in per capita consumption levels. If equations 2 - 4 are estimated
with per capita variables, equation 4, representing an income elasticity
of demand that declines slowly when incomes increase, shows the best fit
for almost all countries, including those developing countries in the
Western Hemisphere that have already reached levels of per capita con-
sumption over 40 kilograms. Apparently, saturation levels of consumption
are higher there than they are in most developed countries.
41.       An equation using an income elasticity of per capita consumption
that, in the long run, tends toward zero is acceptable for most developing
countries where per capita sugar consumption is relatively high. However,
for regions at the lower end of the scale, such an equation is of doubtful
validity. Therefore, a fourth equation, equation 5, was used for the five
countries with the lowest per capita income levels. Except for Other Asia,
this equation performs consistently better than both the constant elasticity
equation and the declining elasticity equations. Equation 5 assumes that
Centrally Planned Asia (largely China), India and Indonesia will show
declining income elasticities of per capita consumption, but that the
elasticities will remain greater than unity over the projection period.
Developing Africa and Other Asia, which showed an elasticity of less than
unity over the estimation period, will show increasing elasticities over
the projection period, but they will still remain less than unity. In view
of the very low consumption levels in these countries, such a pattern seems
more likely than those resulting from the other equations.
Consumption and Prices
42.       A second factor that influences consumption is the price of sugar.
Ideally, retail prices should be used to explain consumption. That this



- 24 -
can lead to good results was recently shown by Pignalosa, who studied the
relationship between per capita consumption and retail prices (deflated by
a per capita income index) for over 100 countries. 1/ However, using that
relationship in a model is not feasible unless separate equations are
estimated for deriving and forecasting retail prices. Therefore, the
world free market price for sugar was used as the price variable. When
following this approach, two things should be kept in mind. First,
elasticities will be very low, since large swings in world market prices
mostly lead to only small fluctuations in retail prices (which are nearly
always the product of a combination of government regulation and market
forces). Second, there may be no relationship at all between world
market prices and domestic consumption in sugar surplus countries, where
factories often have to supply the domestic market first at fixed (and
generally low) prices before they can sell to the export market. Thus
world market price fluctuations may not necessarily be reflected in
domestic prices.
43.       Just as the income elasticity of demand is different at different
income levels, the price elasticity of demand is different at different
price levels. Three types of relationships have been estimated, according
to the following equations: 2/
log C = a5 + b5 log P_1                       (6)
log C = a6 + b  P1                            (7)
C = a7 + b7log   -1                       (8)
where:
C = total or per capita consumption
P = free market price of sugar
The price of the previous year was used to allow for the lag in adapting
the generally regulated domestic prices to developments in world market
prices (Chart V showed some clear examples of this lag).
44.       The demand functions implied in these equations and the corresponding
price elasticities of demand are illustrated in ChartVII. All demand curves go
1/ F. Pignalosa, "A Statistical Analysis of Sugar Consumption and Future
Demand", Monthly Bulletin of Agricultural Economics and Statistics,
Rome: FAO, December 1977.
2/ In the actual estimation an income variable was added.



- 25 -
CHART VII:   DEMAND FUNCTIONS AND PRICE ELASTICITIES OF DEMAND
PRICE  \ \?, P1
2-
1                                                              P
PR ICE                 1                2                 3   DEMAND
Pi                     P2
P3
2 
1L
P4~~~~~~P
PRICE ELASTICITY OF DEMAND
1                 2                 3



- 26 -
through the point (1, 1) and have an elasticity of 1 in this point. 1/
Thus, looking at what happens to the price elasticity of demand when the
price increases or decreases from the unit level gives a good idea as
to the behavior of consumption that is implied in the equations. The
price elasticity (plotted on the horizontal axis in the bottom section of
Chart VII) is constant in equation 6 (P1), increases with price at a constant
rate in equation 7 (P2), and at an increasing rate in equation 8 (P3).
If the demand equation were represented by a straight line (P4) the elasticity
would rapidly approach infinity when prices increase.
45.       When equations 6 - 8 are estimated a striking difference emerges
between high-income (developed) and low-income (developing) countries.
Whereas equation 7 gives the best result for all developed countries,
equation 8 performs best for nearly all developing ones. The logic behind
this difference is clear when one looks at the top section of Chart VII,
where P2 is an example of the equation that fits best for high-income
countries and P3 of the one that fits best for low-income countries. Starting
at point (1, 1), if prices increase poor consumers have to cut back their
consumption level much faster than their richer counterparts. When prices
decrease, poor consumers will increase their consumption rapidly by sub-
stituting cheap sugar for other sources of energy, whereas rich consumers
will not change their diets that strongly.
1/  The demand functions in the chart represent the following equations:
P1 : log C = -log P                 (example of equation 6)
P2 : log C = 1 - P                  (example of equation 7)
P3 :     C = 1 - log P              (example of equation 8)
P4 :     C = 2 - P
The last function, P4, is an example of the textbook demand curve.
It has not been estimated because its implications are difficult
to accept in the case of sugar with its very large price fluctuations
(most textbooks explicitly restrict its application to small variations
in price).



- 27 -
The Complete Equations
46.       When the results of the foregoing analysis of consumption are
combined, the following types of complete equations emerge:
(a) industrial net exporting regions
log C = a -1- b/Y                        (9)
(b) other industrial countries with high consumption levels
log C = a + b/Y + cP_1                  (10)
(c) other industrial countries with low consumption levels
log CCAP = a + b/YCAP + cP-1            (11)
(d) developing net exporting countries
CCAP = a + b log YCAP                   (12)
(e) other developing countries with high consumption levels
CCAP = a + b log YCAP + c log P_1       (13)
(f) other developing countries with low consumption levels
CCAP = a + b YCAP + c log P_1           (14)
where:
C =  total consumption
Y =  total income
CCAP =  per capita consumption
YCAP =  per capita income
P = world market price
It should be noted that for net exporting countries, a price response was
added where the response showed the expected sign.
47.       The resulting estimated equations are contained in Table 6 (they
are given in more detail in Annex II). Two equations are given for each
country.  The first represents the best equation with total consumption
and total income as the variables.   The second gives the most appropriate
equation using per capita figures.
48.       The equations included in the model are marked with an asterisk.
They follow the pattern given in paragraph 46 except for developing net
importing countries with low consumption levels. Altho'ugh equation
14 is most satisfactory from the point of view of "pure" consumption
analysis, there are problems when it is combined with the production equations



- 28 -
Table 6: SUGAR CONSUMPTION EQUATIONS, 1961-77, BY COUNTRY
Country                                      Equation                         a         b       t-value     c        t-value  DWS       R2
Developed Countries
US                                  * log C - a + b/Y + cP                 9.59    -461       11.1      -.004       5.5     1.34      .89
log CCAP - a + b/YCAP + cP               4.43      -.66      2.2     -.005       6.5      1 34     .74
Canada                             * log C - a + b/Y + cP                  7.38    - 50        7.8      -.004       2.3     3.03      .8C
log CCAP - a + b/YCAP + cP               4.11   -  1.09      2.1     -.005       2.3      2.66      .32
EEC                                * log C - a + b/Y + cP                  9.60    -369        7.2      -.003       2.6     1.81      .78
log CCAP - a + b/YCAP + cP               3.97      -.98      3.7     -.004       2.7      1 70     .51
Other Western Europe                * log C - a + b/Y + cP                 9.06    -224       24.4      - 002       2.1     0.84       98
log CCAP - a + b/YCAP + cP               4.42   -  2.16     24.5     -.003       3.0      1.10      98
Japan                                 log C - a + b log Y + cP             3 86        .70    25.6      -.007       4.6     1.53       98
* log CCAP = a + b/YCAP + cP               3.82   -  1.66     15.8     -.006        2.8     1.04      .94
Oceania                               log C - a + b/Y                      7.16    - 30       14.8                           1.02     .93
* log CCAP = a + cP                        3.83                        -.000        0.2     1.60      .03
South Africa /a                       log C - a + b log Y                  2.85       1.19    16.6                          1.48      .98
* log CCAP - a + b/YCAP                    4.07       -.33     2.2                          0.32      .23
Centrally Planned Economies
USSR                                * log C - a + b/Y                      9.63    -138        9.0                           2.27     .84
log CCAP - a + b/YCAP                    4.05        .45     5.7                          2.33      67
Eastern Europe                      * log C - a + b/Y + cP                 8.82    - 95       28.5      -.001       1.7      1.05     .96
log CCAP - a + b/YCAP + cP               4.13       -.84    21.0     - 002        1.9     1.00     .97
Asia                                      C - a + b log Y + c log P -20897.00      4597       19.2   .249           2.4      1.21      97
CCAP - a + b YCAP + c log P         -1.44      23.07    14.1     -.473        3.3     1.45     .94
* CCAP - a + b log YCAP + c log P     12.81       6.20     9.6     -.347        1.8     1.78     .88
Developing Countries
Africa                                log C = a + b log Y + c log P         3.99       .89     38.0     -.021       1.9      1.61     .95
CCAP = a + b YCAP + c log P          2.81     24.4      18.1     -.242        2.0     1.69     .96
* CCAP - a + b log YCAP + c log P     20.27      8.55     16.0     -.184        1.4     1.41     .95
India                                 log C - a + b log Y                   3.12      1.15     7.1                           1.30     .76
CCAP n a + b YCAP                   -2.33     60         2.4                          1.30      26
* CCAP = a + b log YCAP               22.21      8.23      2.4                          1.30     .26
Indonesia                             log C - a + b log Y                   2.98      1.22     9.1                           1.68     .84
CCAP a a + b YCAP                   -2.45     52.87      7.6                          1.61     .78
* CCAP - a + b log YCAP               24.62     10.18      7.8                          1.66      79
Philippines                           log C a a + b/Y + c log P             7.54    -11.42     15.1     -.006       0.2      1.39     .95
* CCAP - a + b log YCAP + c log P     40.75      18.63     5.5     -.471        0.6     1.18     .71
Taiwan                                log C a a + b log Y + c log P         3.52       .81     17.2     -.009       0 2      1.06     .96
* CCAP - a + b log YCAP               19.26     10.47     12.7                          0.96      .91
Thailand                              log C - a + b log Y                   2.12      1.54     11.8                          1.95     .9C
* CCAP - a + b YCAP                   27.57     14.79     10.0                          1.52      .88
Other Asia                            log C - a + b log Y + c log P         4.61       .74     16.8     -.131       4.4      1.11     .95
CCAP - a + b YCAP + c log P          6.14     10.69      7.2    -1.053        3.6     0.84     .78
* CCAP - a + b log YCAP + c log P     15.57      5.53      8.0    -1.094        3.5     1.08      81
Argentina                             log C - a + b log Y                   5 15       .47     7.0                           2.40     .78
* CCAP - a + b log YCAP               35.68      8.77      2 2                          2.23      2'
Brazil                                log C - a + b log Y                   5.51       .63    24.1                           2.34     .97
* CCAP = a + b log YCAP               43.37     15.89      9.3                          1.92       84
Colombia                              log C - a + b log Y                   3.42       .96     21.5                          1.48     .98
* CCAP - a + b log YCAP               55.44     39.68     17.0                          1.10     .95
Peru                                  log C - a + b log Y                   3.85       .96     21.5                          0.97     .97
* CCAP - a + b log YCAP               40.24     27.50      8.1                          0.88     .80
Other South America                   log C - a + b log Y + c log P         3.37      1.03     15.4     -.041       1.6      2.21     .95
* CCAP - a + b log YCAP + c log P     32.48     31.92      7.0    -1.103        1.5     2.18      .78
Cuba                                  log C - a + b/Y + c log P             8.10    -10.54     3.7      -.290       3.7      0.96      52
* CCAP - a + c log P                  86.53                      -11.411        3.3     0.70      .40
Dominican Republic                        C - a + b log Y + c log P        74.48     87 84     11.9    -6.127       1.4      1.60      92
* CCAP n a + b log YCAP + c log P     41.90     12.59      3.0    -1.448        1.0     1.36     .40
Mexico                                log C - a + b log Y                   4.12       .85    40.0                           1.14     .99
* CCAP - a + b log YCAP               34.85     24.93     15.1                          1.26     .94
Other Middle America                  log C - a + b log Y                   3.42       .98     28.2                          0.47     .98
* CCAP - a + b log YCAP               27.85     21.42     12.6                          0.35      .91
/a 1968-1977.
* Equations included in the model.



- 29 -
derived in the next chapter. It turns out, as is discussed in chapter VI,
that these countries would have to import enormous quantities of sugar to
sustain the levels of consumption suggested by equation 14, an unlikely
event given balance of payments conditions. Thus equation 13 had to be
used, 1/ even though the low per capita consumption of these countries
as such does not warrant an assumption of noticeably declining income
elasticities of demand in the near future.
49.       The equations were originally estimated for the period 1960-75.
After completion of a first draft of this paper, they were updated to
include 1976 and 1977. This resulted in a strong decline in the Durbin-
Watson statistics for some countries.    The formulation of the equations
was not changed, however, because of the tentative character of many of the
estimates of income and consumption for the last two years. In the case
of South Africa, Peru and Other Middle America (countries that, incidentally,
are only of minor importance as consumers), the Durbin-Watson statistics
were only moderately higher for the period 1960-75. Their values
can only be improved by choosing a consumption function that leads
to rather unlikely projections. Therefore, although the equations
only marginally reflect past trends (their coefficients are almost
certainly biased), they are believed to be more realistic for projections
purposes.
1/ These equations are included in Table 6 and Annex II as the third equation
given for these countries.



- 30 -
III. SUGAR PRODUCTION
50.       In the model, production is determined by past production and
prices. The two major questions in researching this relationship are
the length of price lags and the exact form of the relationship.
Lags in the Price Response
51.       The question concerning the lag in the response of production to
prices is most easily answered. First, there is a short-term price response
relating to current prices. (Current prices are those in effect at the time
that decisions are made as to planting, weeding and fertilizing.) Since
these decisions precede harvesting by about half a year, the relevant price
for explaining output in 1978, for example, will be the price during the
split year 1977/78. To obtain this price, the average of the prices in
the current and in the previous year was taken.
52.  -    The size of the short-run supply response is limited not only by
agricultural factors, but also by the capacity of processing factories and,
not infrequently, by the transportation infrastructure. Since it takes
about 2 - 5 years to expand factory capacity and improve transport facilities,
this period was used as representative of a "medium-run" lag in the price
response of production.
53.       The short-run elasticity of supply is about the same at all price
levels. However, the medium-term elasticity turns out to increase when the
sugar price rises (i.e., the response is stronger when prices double from,
say, 16 to 32 cents a kilogram than when they double from 8 to 16 cents
a kilogram). The reason may be that domestic producer prices generally
are adapted only when the changes in the world market price are substantial. 1/
Therefore, whereas the short-term price variable enters the production
equations below in logarithmic form, the medium-term price variable is
non-logarithmic to allow for an elasticity that increases when prices move
to higher levels. Obviously, a more satisfactory way to determine the elasticiti
of supply would be to use producer prices (as well as acreage and yield
statistics), but the data required for such an approach were not available.
1/ This also explains why the short-term elasticity does not decrease at
higher price levels. Normally, this is the case since the technical
possibilities for a short-term increase in production are progressively
exhausted when prices rise. However, since producer prices are seldom
adapted to small world market price changes, this effect is obliterated
when production is regressed on world market prices.



- 31 -
54.       The ideas as to lags and the form of the price response were not
developed in isolation of the estimation process. Different lags and
different types of price responses were tried. For the medium-term
price response, an average lag of four instead of three years still
gives reasonable results for a number of countries, although longer
lags do not seem to apply. A constant medium-term price elasticity
instead of one that rises with increasing prices leads to a decline in
the significance of the price response in most cases.
The Specification of the Production Equation
55.       The growth rate of sugar production clearly shows a declining
trend over the estimation period in almost all countries. This makes
it likely that a lagged supply response equation with total production
as the dependent variable will give the best results in explaining
the course of sugar production. In its simplest form, such an
equation could be:
Q = a + bQ_l + cP                              (15)
where:
Q = sugar production
P = world market price
In this equation, there is an equilibrium level of production (often
called "desired" production) corresponding to each price level. If the
price moves up to a new level, production starts growing by absolute
amounts that decline each year by a fraction equal to 1-b. If the
equation is made double-logarithmic, production grows at a declining
percentage rate according to the same pattern.
56.       A number of forms of this type of equation were estimated.
It was found that the following equation gave by far the best results
for almost all countries:
Q = a + b log Q_1 + c PAV-3 + d log PC         (16)



- 32 -
where:
PAV =  three-year moving centered average of world market
prices
PC = average price during the current crop year, i.e.,
PCt = 0.5 (Pt + Pt- )
The form in which the price variables enter the equation was explained in
the first section of this chapter.
57.       The results of the estimation of equation 16, which are given
in Table 7, are very encouraging. In 24 out of the 26 countries it gives
the right sign for the long-run price response; 22 out of the 26 countries
show the right sign for the short-term price response. In addition, the
standard deviation of the coefficients of the price variable is less than
the value of the coefficient for both the long- and the short-term price
variable in over half of all countries, with many coefficients significant
at the 95% level.
58.       The implied price elasticities of supply are given in Table 8.
They were measured at average production levels over the estimation period
(1955-77). Since the medium-term price elasticity depends on the level
of prices, it has been given at two different price levels.
59.       As was the case with consumption, the values of the price
elasticities are low, since domestic producer prices fluctuate considerably
less than international prices, and it is only through domestic producer
prices (and, in some cases, quotas) that international prices affect pro-
duction.
60.       The type of equation specified above has one problem, however:
it leads to totally unreasonable projections. It shares this problem with all
lagged supply response equations applied to sugar production. Such equations
imply the assumption that the desired level of the dependent variable
(in this case production) corresponding to a certain price does not change
over time. If the autonomous decline in the growth rate of production
over the estimation period has been small, the problem is not great, since
the implied "desired" production level will be far in excess of the actual
levels reached. However, if the decline has been strong, as in the case
of sugar, the equations start to suggest that desired levels of production



Table 7: COEFFICIENTS OF EQUATION 16, BY COUNTRY /a
constant       b       t-value       c      t-value       d       t-value      DWS       R
Developed Countries
US                              -32953       4420       9.5                             192       1.5          2.14     .83
Canada                               9         24       0.9        1.2      1.5                               2.09      .14
EEC                             -56427       7057       7.2       51.9      1.3         403       1.1          2.58     .79
Other Western Europe            -14040       2043      10.0       40.4      2.8         157       1.2          2.53     .89
Japan                           -  770        210      15.6                                                    1.02     .91
Oceania                         -12357       1877      12.5       21.7      2.0           32      0.3          3.06     .91
South Africa                    - 7295       1193       9.0       18.3      1.9           1       0.0         2.59      .84
Centrally Planned Economies
USSR                            -37438       5081      10.2        8.9      0.2                                1.81     .84
Eastern Europe                  -16954       2486       4.3       16.3      0.9         104       0.6          2.22     .53
Asia                            -11811       1752      24.7       14.1      1.6         339       4.1          1.60     .98
Developing Countries
Africa                          -13519       2057      18.2       12.9      1.4           10      0.1          2.59     .95
India                            15154       2179       5.7       13.7      0.5         402       1.5          1.44     .72
Indonesia                       - 1424        255       1.4       15.3      2.2         165       3.1          1.85     .71
Philippines                     -10698       1611       8.0        1.5      0.2         227       2.4          2.22     .88
Taiwan                          - 1199        286       1.7        7.6      1.4           17      0.4          1.68     .33
Thailand                        - 2349        325       7.5       54.1      5.4         232       2.5           .76     .90
Other Asia                      - 5420        936      16.9       20.1      2.8                                1.35     .94
Argentina                       - 4249        700       3.6        6.8      0.6         181       1.9          2.02     .67
Brazil                          -29977       3979      11.0       67.7      2.4         372       1.4          1.74     .91
Colombia                        - 2530        484      23.5          .8     0.4          42       2.1          1.75     .92
Peru                            - 2892        538       5.2                              47       1.7          2.13     .71
Other South America             - 5489        933      17.1          .7     0.2           74      1.7          1.67'    .95
Cuba                            - 8679       1596       1.3       44.5      1.1           51      0.1          1.93     .16
Dominican Republic              - 3716        669       4.0        3.5      0.5          33       0.4          2.28     .63
Mexico                          -10028       1578      18.2        5.5      0.8           67      1.0          2.43     .95
Other Middle America            - 8996       1406      18.4       12.0      3.1          83       2.6          3.11     .96
/a  Estimation period:   1955-77.



- 34 -
Table 8: PRICE ELASTICITIES OF PRODUCTION AT AVERAGE 1955-1977
PRODUCTION LEVELS AND AT TWO DIFFERENT 1970 PRICE LEVELS, BY COUNTRY
Medium Term              Short            Long Run
Elasticity at             Term           Elasticity at
Country                     USC   10/kg   US¢  20/kg     Elasticity   USC 10/kg   USc 20/kg
WORLD                             .050          .099          .046          .791      1.202
US                               -            -             .036          .225       .225
Canada                          .088         .176            -            .106       .212
EEC                            .061          .122           .047          .629       .984
Other Western Europe            .159         .318           .062        1.120       1.927
Japan                           -             -              -            -           -
Oceania                         .099         .199           .015          .812      1.518
South Africa                    .125         .249            -            .666      1.330
Soviet Union                    .012         .023            _            .035       .069
Eastern Europe                  .041         .082           .026          .178       .287
Centrally Planned Asia          .062         .123           .148          .884      1.144
Africa                          .056         .111           .004          .512       .987
India                           .041         .082           .120          .462       .580
Indonesia                       .191         .382           .206          .581       .861
Philippines                     .009         .017           .127        1.364       1.451
Taiwan                          .090         .181           .020          .167       .304
Thailand                      1.093         2.186           .469        4.559       7.749
Other Asia                      .165          330            -            .717      1.434
Argentina                       .064         .128           .171          .692       .880
Brazil                          .151         .301           .083         2.026      3.334
Colombia                        .014         .029           .076          .666       .773
Peru                             -            -             .059          .183       .183
Other South America             .006         .012           .062          .314       .342
Cuba                            .079         .158           .009          .123       .233
Dominican Republic              .037         .075           .035          .255       .387
Mexico                          .027         .054           .033          .269       .390
Other Central America           .075         .150           .052        1.063       1.693
Note:  The elasticities are derived from the coefficients of equation 16, estimated
for each country for the period 1955-1977.    The short-, medium- and long-run
elasticities refer to the changes in supply after one year, three years and
an infinite number of years respectively.



- 35 -
at prevailing prices have already been reached at the end of the estimation
period or will be reached shortly thereafter. Thus, to have production
grow any further after this, prices have to increase sharply. In the present
case, prices of up to US$1 a pound of sugar would be needed for production
to match expected 1990 consumption levels.
61.       To avoid these risks, the above type of equations can only be
applied to area planted in countries where most arable land has already been
developed. In other cases, it is more a "desired" rate of growth than a
desired level of production that corresponds to a certain price level. In
many countries, agriculture is continuously being expanded: the expansion
is not contingent upon any increase in the level of real prices, although
its rate may depend on that. Similarly, if the equation is applied to
total production, there is a continuous increase in yields because of tech-
nological improvements; again the increase is not contingent upon an increase
in real price levels, although the rate at which such improvements will be
made may well vary with the level of prices received for the crop.
62.       The above reasoning led to a reformulation of the production
equation in terms of growth rates, as follows:
logQ-      a + b  PAV + b   log PC           (17)
The dependent variable is approximately equal to the growth rate of pro-
duction, since for small absolute values of k, the relation log (1 + k) = k
holds approximately. Actually, if the dependent variable is replaced by
(Q/Q 1)-l, the coefficients turn out to be nearly identical in all cases.
The logarithmic formulation was chosen because of a slight advantage in
interpreting the equations.
63.       Two variables can be profitably added to the basic equation in
the previous paragraph. The first of these is the one-year lagged dependent
variable. Annual growth rates tend to show a strong negative autocorrelation.
A drop in production because of bad weather will tend to be followed by a
larger than normal increase in production, while the reverse holds for a
large increase in production reflecting an exceptionally good harvest.



- 36 -
Thus, the one-year lagged dependent variable can be added to the equation,
to give:
log Q =a + b     log Q-    + b  PAV + b4 log PC   (18)
The expected sign of b1 is negative. This implies that the equation is
actually explaining the weighted average growth rate over the past two
years, since it can be reworked to:
log   Q        a + b  PAV + b   log PC            (19)
Q1-k Qk         3        4
where k is equal to -bl.
64.       A second variable that can be profitably added is a variable
that captures the autonomous decline in production growth rates that has
been observed in the past.   As a first try, the variable l/t was used,
where t is a time trend. It performs well but has one major disadvantage:
it assumes that the decline in production growth is dependent only on the
passage of time. It was felt, instead, that the decline in growth rates
should be dependent on the level of production reached. Thus, there would
be no decline as long as production stayed at about the same level, but
it would set in once production started growing, becoming more pronounced
as production grew faster. A variable that satisfies these conditions
would at the same time take care of the fact that growth is much easier
starting from a low basis than from a higher basis.
65.       The form of this variable chosen is I/QAV 2' where QAV stands for
the three-year moving average of production. It has the advantage of declining
with increasing production at a slower and slower rate and of having a
definite limit of zero. Thus, the decline in the growth rate over the past
can be captured without having to project it ad absurdum. The coefficient
of this variable depends both upon the rate of decline and on the starting
level of production in the area. To minimize the dependence of the coef-
ficient on the starting level of production, the variable was multiplied
by production in 1951-54, the years immediately preceding the regression
period. Done this way, the relative sizes of the coefficients of this
variable for the different areas more clearly reflect the relative
strength of the decline in their growth rates.



CHART VIII
ANNUAL PERCENTAGE CHANGES IN AREA, YIELD AND SUGAR CONTENT OF SUGARBEETS
AND IN CENTRIFUGAL SUGAR PRODUCTION
IN THE NETHERLANS 1962-1972
40-
20j
SG-              _m 
-13o                                                             L i.  I P  | 2 AREA
-2B- 1                                                             SUGAR CONTENT
SUGAR PRODUCTION
-3s-o



- 38 -
66.       The complete equation explaining regional growth in production
now becomes:
log -QQ  = a + b  log     + b        + b  PAV + b   log PC   (20)
Q-1l         Qo-2 -+2 QAV-2         3 
or, in the notation used in Annex II:
1 GR-l + b2 DC + b3 PAV_3 + b4 log PC              (21)
where:
GR = growth rate of production as measured by log (Q/Q1)
Q5154 = average level of production during the years 1951-54
PAV = three-year centered average of price
PC = average of price in the present and the previous year
DC = "deceleration variable," equal to Q5154/QAV 2
67.       Equation 21 was estimated for all countries.    The resulting
coefficients are contained in Table 9 (the equations are given in more
detail in Annex II). The sign of the coefficient of the first independent
variable is negative in 25 out of 26 cases. It generally lies between -0.2
and -0.5, implying that present production can best be explained by
relating it to production in the past two years, weighted about 65-35 in favor
of the most recent year.   The coefficient b2 is positive in all cases,
meaning that in all regions there has been an autonomous decline in growth
rates. The coefficient is highest in those regions where production has
shown a strong tendency to stagnate (e.g. Taiwan, Cuba, Indonesia, Canada
and Central America, which all have a coefficient in excess of 0.5).
68.       The coefficients of the price variables are difficult to estimate,
since annual fluctuations in production growth rates resulting from weather
and other exogenous influences far exceed the changes in growth rates
resulting from price fluctuations. This is illustrated in Chart VIII, which
gives the annual percentage change in sugar beet area, yield, sugar content
and total sugar production in the Netherlands. 1/ The chart shows that
1/ Since data from FAQ production yearbooks on acreage, beet production and
centrifugal sugar production were used to compute the variables in the
chart, the choice of a country was limited by the requirements that
statistics be good, all sugar comes from one source only, and the whole
of this source is used to produce centrifugal sugar. This restricted
the choice to a few countries only.



Table 9: COEFFICIENTS OF EQUATION 21, BY COUNTRY la
constant      bl       t-value      b       t-value       b3      t-value       b4      t-value      DWS     R2
Developed Countries
US                              - .15        -.24      1.0          .11     0.9                                .033     1.3          1 84    .15
Canada                          - .83        -.50      2.7         .83      2.1          .008     1.1                                2.14    .43
EEC                             - .10        -.44      2.1         .07      0.9         .003      0.6          .031     0.7          2 26    .23
Other Western Europe            - .14        -.34      1.6          .09     0.7          007      1.2          .036     0.7          2.37    .19
Japan                           - .12        -.13      0.5        1.86      2.6          .002     0.2                                2.33    .35
Oceania                           .02        -.48      2.4                               .004     0.9                                1.89    .23
South Africa                      .07        -.42      2.0         .15      0.9         .006      0.9                                2.30     22
Centrally Planned Economies
USSR                            - .13        -.13      0.8          .33     2.8          .002     0.3                                2.28    .30
Eastern Europe                  - .26        -.24      1.1         .22      1.1          .003     0.5          .032     0.6          2.20    .13
Asia                            - .04        -.08      0.3         .11      1.2                                .035     0.8          1.92    .08
Developing Countries
Africa                            .04        -.57      3.2          .09     1.2                                                      1.67    .35     s
India                           - .03        -.02      0.1          .46     2.0                                .072     0.9          1.75    .19
Indonesia                       -1.22        -.43      2.3         .93      2.8          .011     1.5          .192     3.4          1.76    .50
Philippines                       .18        -.23      1.0         .08      0.5                                .075     1.4          1.96    .17
Taiwan                          -1.07        -.23      1.7                               .008     2 1                                1.78    .54
Thailand lb                       .87                                                                                                1.81    .13
Other AsiLa                     - .03                               .10     0.9          .006     1.0                                1.81    .08
Argentina                       - .45        -.28      1.3          .28     1.1                                .128     1.4          1.91    .16
Brazil                          - .02        -.18      0.8         .04      0.3          .004     0.6          .015     0.3          2 02    .06
Colombia                          .04        -.05      0.2          .04     0.6                                                      1.82    .02
Peru                            - .33        -.25      1.2         .34      1.9                                .040     1.1          2 07    .19
Other South America             - .04        -.33      1.2          .22     2.7                                .007     0.2          1.75    .28
Cuba                            -1.08        -.31      1.5         .90      2.6          .005     0.7          .043     0.6          2 18     33
Dominican Republic              - .17        -.39      1.9          .28     1.0                                .007     0.1          2 02    .20
Mexico                          - .01        -.37      1.8          .15     1.7                                 001     0.0          1.95     22
Other Middle America            - .08        -.61      3.4          .05     0.7          004      1.7          .032     1 5          1.77    .44
/a  Estimation period:    1955-77.
/b  The equation for Thailand is the only one wherebl is positive.     The reason is that production expanded quite suddenly and drastically
in the 1970s, causing a positive autocorrelation in annual production growth rates. Also, because of this sudden production increase
at the end of the estimation period b2 is negative.    No equation for Thailand is therefore given in this Table.      The coefficients of
the equation used in the model (which is given in Annex II) were fixed arbitrarily.



- 40 -
changes in yield and sugar content are often more important than changes
in the area planted in explaining total sugar production. For example,
the largest increase in area planted in the chart (16% in 1965 in response
to the 1963-64 price boom) coincided with a decline in production because
of a decrease in yields of over 20%. Even when both area and yield decline,
sugar production can go up because of an increase in the sugar content of the
beets, as happened in 1969.
69.       In view of the overriding importance of the weather variable in
annual fluctuations, it is not surprising that, with the annual growth
rate of production as the dependent variable, the standard deviations of
coefficients of the price variables often exceed their absolute values.
However, their general pattern was the same as that implied by equation
16, which means that their values are not as accidental as their low
t-ratios suggest. A table listing the implied price elasticities of supply
was not prepared since it would have given the mistaken impression that
there was a firm basis for suggesting, say, that the short-run price
response of production in Western Europe was twice as high as in Eastern
Europe. If such comparisons are needed, Table 8 is a better guide,
although it should be realized that it gives average elasticities over
the past 20 odd years rather than ones that could be used to explain
future developments.



- 41 -
IV. PRICES AND MODEL SIMULATIONS
70.       In the preceding two chapters, production and consumption were
explained as dependent on lagged production and current and lagged prices,
and on incomes and the one-year lagged price, respectively. There are
two ways to complete the model. First, demand for stocks can be estimated,
and the resulting equation, plus the requirement that total demand equal
total supply, can be combined with the production and consumption equations.
Second, an attempt can be made to develop a price equation, which together
with the requirement that closing stocks equal opening stocks plus pro-
duction less consumption, also completes the model. In this chapter
the latter approach was chosen. However, there is not much difference
between the two. Stocks are one of the main variables which determine
prices, and an equation involving demand for stocks is thus implied in
the price equation.
World Sugar Prices
71.       There is a large variety of sugar prices in world trade, depending
not only on the type of sugar involved (raw or refined, bagged or bulk), but
also on the market in which it is traded. Until the end of 1974, there were
four important markets in international trade: the US (a protected market
to which exporters had access on a quota basis), the USSR (which since the
early 1960s provides a guaranteed outlet for Cuban sugar at unknown prices),
the UK (a market to which Commonwealth producers could export predetermined
quantities at fixed prices), and the free market, absorbing most of the
remaining sugar.
72.       Since 1975, the US is a part of the free market.   Prior to 1975, the US
Sugar Act allocated quotas to a number of exporting countries for an average
of 4-5 million metric tons in the early 1970s. Sugar imported into the US
market under these quotas could, after a fixed duty of US¢0.625/lb had been
paid, 1/ compete freely in the US market. Because of the quota system,
1/ Sugar from the Philippines entered duty free through 1955. From 1956
onward the duty was gradually increased to reach US¢0.625/lb in 1974.
A duty of US¢0.5/lb was payable on sugar imported from Cuba.    No Cuban
sugar entered the US after mid-July 1960.



- 42 -
prices in this market exceeded the world free market price often by a sub-
stantial margin, as can be seen in Chart IX.   The expiration of the Sugar
Act implied a very drastic change for the sugar industries in those countries
that had enjoyed large quotas in this market.
73.       The Commonwealth Sugar Agreement also expired at the end of
1974. Although the prices negotiated under this agreement were lower than
those in the US market, they still included a substantial premium over the
free market price (see Chart IX).   The quotas under this agreement added
up to about 1.8 million metric tons in its final years. Additional sugar
from the Commonwealth countries, up to a total of about 0.9 million tons,
could be imported into the UK under a preferential duty. The agreement
was replaced in 1975 by the Sugar Protocols of the Lome Agreement.
74.       The two most important markets for sugar traded outside the
preferential agreements are London and New York. Prices reached in these
markets are corrected for freight and insurance and quoted f.o.b. and
stowed Greater Caribbean Ports. The average of these two prices is used
as the so-called "daily price" under the International Sugar Agreement
(ISA), and this price is the best indicator of the development of the
world free market price for sugar. 1/ This price is given in Table 10,
together with the International Price Index which is used as the deflator
in this paper.
75.       The world free market price deflated by the International Price
Index has been used as the price variable in the present model. 2/ There
are basically two reasons for this decision. First, since 1975 about 75%
1/ The ISA Daily Price is the arithmetic average of the New York Coffee
and Sugar Exchange Contract No. 11 spot price and the London Daily
Price (after correction for insurance and freight to bring this price
on an f.o.b. and stowed Caribbean Port basis). If the difference
between these two f.o.b. prices is larger than 10 points (6 points
until the end of 1973) the lower price plus five (three) points is
taken. One point equals US0O.Ol/lb.
2/ Another price that could have been selected is the trade-weighted average
of the world free market price and the preferential prices in the US and
the UK markets. This price was used in a model by E. Brook and D. Nowicki
(Sugar: An Econometric Forecasting Model of the World Sugar Economy,
Washington, D.C.: World Bank, Commodity Note No. 10, 1979).



- 43 -
CHART Ix
COMMONWEALH SUGAR AGREEMENT NEGOTIATED PRICE AND US
PREFERENTIAL PRICE AS X OF WORLD FREE MARKET PRICE, 1950-1974
US PZALPrxE=
c M-~~~~~~~~~~~~~~~~~~~~~~~~ 
CSA tATMED PR      \.
r  I  9  I  I  I  I  I  I  t  t  I  I  I  9  9  I   I
BB   6i2  64S  GO   68  IS8   02   04   Oa   Se   78   72   74



- 44 -
Table 10:  SUGAR PRICES IN CURRENT AND IN 1970 REAL US DOLLARS, 1951-78
AND THE INTERNATIONAL PRICE INDEX, 1951-90
International
1970            Price
Year                    Current Sugar Price    Real Sugar Price      Index
US¢./lb    US¢,,/kg   US¢/lb     US,/kg    (1970-100)
5.70       12.57       6.91      15.24       82.5
1951                    4.17        9.19        4.93      10.86      84.6
1952                    3.41        7.52        4.22       9.31      80.8
1954                    3.26        7.19       4.12        9.08      79.2
3.24        7.14       4.03       8.89       80.3
1956                    3.47        7.65       4.17        9.19      83.2
1956                    5.16       11.38        5.99      13.20      86.2
1958                    3.50        7.72        4.05       8.94      86.4
1959                    2.97        6.55       3.43        7.55      86.7
3.14        6.92       3.54        7.81      88.6
1960                    2.70        5.95        3.02       6.66      89.4
1962                    2.78        6.13        3.15       6.94      88.3
1963                    8.34       18.39       9.40       20.73      88.7
1964                    5.77       12.72        6.40      14.10      90.2
1965                    2.02        4.45       2.18        4.80      92.8
1965                    1.81        3.99        1.93       4.26      93.7
1967                    1.92        4.23        2.02       4.44      95.2
1968                    1.90        4.19       2.13        4.69      89.3
1969                    3.20        7.06       3.55        7.83      90.2
3.68        8.11       3.68        8.11     100.0
1970                    4.50        9.92       4.15        9.14     108.5
19721                   7.27       16.03       6.06       13.37     119.9
1973                    9.45       20.83       6.53       14.41     144.6
1974                   29.66       65.39       16.40      36.15     180.9
20.37       44.91       9.76      21.52      208.7
1976                   11.51       25.37       5.46       12.04     210.7
1977                    8.10       17.86        3.50       7.73     231.1
1978                    7.81       17.22       2.92        6.43     267.8
1979                                                                303.2
1980                                                                334.9
1981                                                                365.1
1982                                                                394.3
1983                                                                422.0
1984                                                                450.4
1985                                                                479.8
1986                                                                509.8
1987                                                                541.2
1978                                                                573.8
1979                                                                607.3
1990                                                                642.0
Source:  Prices - International Sugar Organization: International Price
Index - World Bank.



- 45 -
of internationally traded sugar went to the free market. Second, even
countries with quotas in protected markets have (and had) to export any
surplus sugar at the world free market price. Unless these countries cannot
fill their quota, the world market price rather than the price in the pro-
tected market represents their marginal revenue from sugar exports.
76.       World sugar prices fluctuate more strongly than the prices of
any other major primary commodity in international trade. Between 1968
and 1974 prices increased by over 1400% (nearly 700% in real terms).
In the next four years they dropped by 75% (over 80% in real terms).
Even in a single year, an increase of 200% is not uncommon. This excessive
price volatility should be kept in mind when the explanation and the pro-
jection of sugar prices are discussed.
The Price Equation
77.       Sugar prices are closely related to the end of period (closing)
stocks of sugar. Since world sugar stocks have never fallen below four
months' supply, this level was used to represent working stocks:
SWK = (C + C  )/6                             (22)
where:
SWK = working stocks
C = world consumption
The stocks in excess of this level have been defined as speculative stocks:
SSP = S-SWK                                   (23)
where:
SSP = speculative stocks
S = world stocks
All stock variables refer to closing stocks. To express speculative stocks
in months' supply these stocks can then be divided by the import require-
ments of the free market:
NOSP = 12. 0.5 (MF    +    2)                  (24)
0.   M-l   - F2)



- 46 -
where:
MP = net import requirements of the free market 1/
MSSP = months of supply of speculative stocks in terms of
net free market import requirements.
The net import requirements of the current year have not been used, since
such an approach leads to instability in the computer routines used to
solve the model.
78.       A second variable that influences prices is the supply and demand
balance, defined as:
Q + Q-1 - (C + C-1)
SDBAL         C + C                           (25)
where:
SDBAL = supply/demand balance
Q   world production
C   world consumption
This variable can be interpreted as a proxy for expected stock developments,
since it is equal to the relative change in total stocks over the current
and past year.
79.       The real price of sugar in the free market, P, can be explained
as follows:
log P = 0.89556 + 0.56366 log P_1 + 2.130496/MSSP
(6.4)              (4.0)
- 8.335892 SDBAL                      (26)
(4.9)
R  = 0.928            DWS = 2.14
The above price equation has been estimated for the period 1962-77, 1962
being the first year for which a figure for world stocks was available.
80..      If the price, instead of the logarithm of price, is used in the
above equation the R-squares and other estimation statistics improve
considerably. However, such equations, which minimize absolute rather
1/  Net free market import requirements are defined as the net import require-
ments.of the 26 countries distinguished in the model, with the exception
of the*'EEC, and, through 1974, of the US.



- 47 -
than relative deviations between estimated and actual prices, give an
uncomfortably large weight to the peak prices reached in 1963 and in
1974-75 and therefore were not used.
81.       The model can now be simulated if a stock identity is added:
S = S_1 + Q - C + SDISCR                      (27)
where:
S = world closing stocks
Q = world production
C = consumption
SDISCR = discrepancies between calculated and actual stocks
that always occur in practice.
Model Simulation
82.       The results of the simulation for the price variable using
equation 26 are given in Chart X. All variables in the simulation were
generated endogenously except for incomes and population. 1/ The
simulations were started with 1963, the first year for which the necessary
observation on S-1 was available.
83.       As can be seen from the chart, the simulation correctly captures
the general movement of prices. The performance is good given that not a
single dummy variable was used in any of the 53 equations entering the
simulation. Thus, conditions at the start of the simulation were as close
as possible to the conditions prevailing when projections are made. The
only additional step that could have been taken is to have the coefficients
determined by regressions which only use data prior to 1963. However,
sufficient data are not available for that, especially for determining the
coefficients of the crucial price equation.
Model Simulation with Dummy Variables
84.       For those who may not be convinced by the above arguments, a
second simulation was carried out. It used the same set of equations,
but two dummy variables were added. One, equal to one in 1964 and zero
1/ Also exogenous is the variable reflecting stock discrepancies. This
variable can be omitted without much problem, however, since discre-
pancies are generally small in the case of sugar.



- 48 -
CHART x
WORLD t1ARKET PRICE OF SUGAR, ACTUAL AND SIMULATED
I 962-t 978                 1t
AcTUAL PR3-
Ss-V                                        , 
$9.~~~~~~~~~~~~~~~~~~~~4
6 ts 1   ;      !       X       _  s      at
62           as E$  Sst8  78     72     74     78    78



- 49 -
in all other years, was introduced into the production equations for
countries in the Northern Hemisphere to capture the effect of an
exceptionally good crop year. The other dummy variable, D6374, equal
to one in 1963 and 1974, was inserted into the price equation to account
for the exceptionally high prices in those years, as follows:
P = 20.647766 + 0.314212 P_     5.971828 log MSSP
(3-5)          (4.0)
+ 11.256973 D6374                          (28)
(4.0)
2
R  = 0.932          DWS = 1.646
85.       The simulation results were greatly improved by the two dummy
variables. As can be seen from Chart X, the simulation now approaches
actual price developments fairly closely. Despite the gain in "simulation
power", however, the variables also lead to a decline in "projection power",
because there is no way to project either the next "exceptionally good crop
year" or the next year in which prices will be "exceptionally high". 1/ Even
if the model were corrected for these conditions by projecting "average"
dummies for the future, there would be the problem of artificially reducing
the range of variation of the dependent variable. For example, in the
past the price has shown exceptionally high values in about one out of
ten years. The relevant dummy could then be set at 0.1 for each projection
year to correct for the underestimation of average prices which would result
if the dummy were set at zero for all projection years. All this would do,
however, is shift the whole price curve upward by US4l/kilogram--it would
not reflect the volatility of sugar prices which, in equation 28, has been
attributed to the unforecastable dummy rather than to forces inherent in
the process of sugar price formation. Therefore, equation 26 was used in
the model.
1/ This is not to say that dummies cannot lead to a more correct estimate
of coefficients, and hence to better projections. However, they will
do so only when they are based on a priori knowledge (rather than on
the existence of large error terms in the first attempts at a regression)
and refer to factors totally unrelated to any of the explanatory variables
in the model (like wars or natural disasters).



- 50 -
V. SUGAR TRADE
86.       Once production and consumption in a country have been
established, it is no longer very difficult to determine trade. In
this chapter, net trade and its relation to the balance between pro-
duction and consumption are examined first. Subsequently, the reasons
why gross and net trade may differ in some of the countries are reviewed.
Finally, the character of the resulting trade equations is discussed
briefly.
Explaining Net Trade
87.       Ideally net trade should equal opening stocks plus production
less consumption less closing stocks, i.e.,
X -M    Q + S      C - s                       (29)
where:
X = exports
M = imports
Q = production
C = consumption
S = closing stocks
88.        In practice, equation 29 never does hold exactly.   A first reason
is that, worldwide, exports always tend to exceed imports. In the case of
sugar, the implied loss was about 2% of exports over the last 15 years
(1963-77). Given that about 25% of world sugar production enters inter-
national trade, the loss of world production in international trade has been
0.5%. In fact, however, world production has exceeded world consumption
plus stock changes by 1.0%, meaning that a further 0.5% of production has
gotten lost during internal transport and distribution.
89.       These product losses are not very large when compared with many
other commodities. Actually, they are small compared with the statistical
discrepancies that are expected when using standard conversion factors
to convert refined to raw sugar and given that sometimes it is not even known
to which type of sugar the data refer. Thus, it would be inappropriate to
derive any conclusions as to actual physical processes in production,
transport and distribution from these discrepancies. Because of this, and



- 51 -
because the discrepancies are very small in relation to likely errors in
forecasting, it was decided to disregard them in the trade equations. In
the projections, world exports thus equal world imports and world stock
changes equal world production less world consumption.
90.       To use equation 29 in the trade projections regional stock
figures are needed. However, only a world stock figure is generated by
the model. This difficulty was overcome by assuming a fixed distribution
of stocks over the 26 countries in the model. Actual average distribution
of stocks in the years 1975-1977 as given in Table 11 was used. Thus,
regional net trade was forecast based on the equation:
X - M =Q - C - SH7577 (SWO - SWO 1)           (30)
where:
SH7577 = region's average share in world stocks in 1975-77.
SWO   world closing stocks of sugar.
Explaining Gross Trade
91.       There are several reasons why gross trade can exceed net trade
in a country, i.e., why a country will import and export sugar at the same
time. First, some of the "countries" distinguished in this model are
regions made up of several countries. While the region as a whole may be
a surplus producer, some countries within it may have deficits. Second,
some countries import raw sugar and export refined sugar. Third, certain
countries have entered into import obligations in excess of their import
requirements (e.g. the EEC and, in the 1960s, the USSR). Thus, for those
countries that show both, an equation for either imports or exports is
needed in addition to the equation for net trade. Generally, this means
constructing an equation for exports in net importing countries and one
for imports in net exporting countries.
92.       Of the 15 net exporting countries in the model, 11 do not show
any imports. Each of the 11 represents a single country. Of the remaining
four "countries", three are regions consisting of several countries, of which
at least one in each is a net importer. In the case of Oceania and Other
Middle America, imports move roughly in line with total regional consumption.



- 52 -
Table 11: SUGAR CLOSING STOCKS, 1975-1977, BY COUNTRY
Closing Stocks
1975       1976      1977    1975-77      Shares in
Average    World Total
--------('000 metric tons)----------      ---  %  ---
WORLD                              32,406     36,664     43,563    37,54         100.0
Developed Countries              17,043     18,440    20,994     18,826        50.1
US                              2,613      3,206     4,130      3,316         8.8
Canada                            356        436       451        414         1.1
EEC                             8,984      9,220    10,840      9,681        25.8
Other Western Europe            2,607      3,275     3,730      3,204         8.5
Japan                             563        391       442        465         1.2
Oceania                         1,345      1,338     1,061      1,248         1.3
South Africa                      575        575       339        496         3.3
Centrally Planned Economies       6,347      6,496     8,625      7,156        19.1
USSR                            2,805      2,986      4,559     3,450          9.2
Other Eastern Europe             2,438     2,427      2,744     2,536          6.8
Asia                             1,104     1,084      1,322     1,170          3.1
Developing Countries               9,016    11,728     13,944    11,562         30.8
Africa                           1,222     1,580      2,107     1,636          4.4
Asia                             3,880     4,855      5,229     4,655         12.4
India                         1,237      1,340     1,850      1,476          3.9
Indonesia                       -55        113       347        135           .4
Philippines                    1,108     1,737        818     1,221          3.3
Taiwan                           161       125        221       169           .4
Thailand                         144       187        279       204           .5
Other Asia                    1,284      1,353     1,715      1,451          3.9
Argentina                        579       851        590       674          1.8
Brazil                        1,790      2,683     3,895      2,790          7.4
Colombia                          30        20        62         37           .1
Peru                             130       201        148       160           .4
Other South America              501       633        674       603          1.6
Cuba                            557        413       609        526          1.4
Dominican Republic                67       188        153       136           .4
Mexico                            25        46        159        76           .2
Other Middle America             235       257        319       270           .7
Total Developing Americas     3,914        293     6,609      5,272         14.0
Source: ISO Statistical Bulletin,.August 1978.



- 53 -
In Other South America, imports have shown no discernible trend. The
fourth country, South Africa, has shown sizeable imports only since 1975.
These imports, for which no source is reported, came in all probability
from Zimbabwe-Rhodesia; it is assumed these imports will stop in the
future.
93.       All 11 net importing countries also export sugar, with the
exception of Indonesia. Of the 10, 6 consist of more than one country.
Exports from Other Western Europe and Other Asia grow about in line
with production. Exports from Eastern Europe, the centrally planned
economies in Asia, and Africa do not show any trend. The EEC was a net
importer in the estimation period, but it became an important net exporter
in the mid-1970s. Its obligation to import about 1.4 million metric tons
annually from ACP countries, together with a small amount of other
imports, sets a minimum level for EEC imports.
94.       The exports from the four net importing countries that are
single countries can mostly be explained by logistics. The US and Canada
mainly export sugar to each other. The USSR exports small amounts of
sugar to Eastern Europe. Re-exports of sugar from Cuba, for which the
USSR guaranteed a market after trade relations between Cuba and the US
were terminated, have not occurred to any large extent in recent years.
Japan exports a small amount of refined sugar to countries in Southeast
Asia.
The Trade Equations
95.       The trade equations are given in Annex II.   Although a few
derive their coefficients from normal statistical estimation procedures,
they do not try to capture any past developments. Their purpose is purely
to help in forecasting a consistent pattern of world trade. Prices have
not been used in forecasting exports and imports since they already
entered into the determination of production, consumption and stocks, the
variables on which trade depends.



- 54 -
VI. PROJECTIONS
96.       Using the latest available data, l/ the model projects a future
that, at least in the short run, will delight producers and horrify consumers.
Table 12 contains the projected prices.
Table 12:   SUGAR PRICE PROJECTIONS IN US¢/LB,
1979-90
Sugar Prices
Year               Current          1980 Real
… ------…(US¢/lb)--
1979                 10.6             11.7
1980                 17.9             17.9
1981                 26.0             23.8
1982                 30.7             26.1
1986                 18.6             12.2
1990                 31.4             16.4
The purpose of the present chapter will not be to defend these projections;
rather, it will be to show how easily the future could look completely
different from the one depicted here, and with how much care sugar price
projections have to be used.
97.        The first section of this chapter   gives a set of "initial
projections", using all equations discussed up to now without
1/ ISO data were available up to 1977. For production in 1978 and 1979
the production estimates for 1978/79 and 1979/80 made by F.O. Licht
(International Sugar Report, October 12, 1979) were used. The figures
for China were increased by 1.5 million metric tons for both years to
maintain continuity with past series as well as consistency with the
consumption estimates (F.O. Licht recently revised its estimates of both
consumption and production in China downward by about 1.5 million tons).
The actual price for 1978 was inserted. All other variables for years
after 1977 were generated by the model.



- 55 -
any changes, except that prices have been fixed at their average historical
level throughout the projection period. These projections serve to show
the long-run implications of the model for the various countries. In some
cases these implications seem unlikely (for example, the EEC cannot be
assumed to subsidize an ever-increasing quantity of sugar exports, and a
number of developing countries may not want to devote ever-increasing
amounts of foreign exchange to sugar imports) and this leads to changes
in a few of the equations. These changes are incorporated in the model,
and thesecond section then discusses the projections made with all
variables endogenous. These projections serve as a baseline against
which the projections in the subsequent sections, which introduce different
assumptions (e.g., sudden crop failures or bumper crops, changes in
income growth rates, or policy changes in high cost beet producing
countries), are compared.
The Initial Projections
98.       As a first approach, consumption and production in 1990 were pro-
jected assuming a price of US¢10/kilogram in 1970 terms (US¢l5/lb in 1980
terms) throughout the projection period. This price is about equal to the
average price over the past 25 years. The resulting projections are contained
in Table 13. Like all projections in this paper they were arrived at using
actual data up to 1977, plus estimates of production in 1978 and 1979 and
the actual price in 1978. The fact that world production is
considerably below world consumption in Table 13 is not a problem--without
a strong increase in prices production cannot be expected to recover from
the effects of the low prices in recent years. With this qualification
in mind, the credibility of the projections can be judged by comparing them
with projections made by non-econometric methods and by assessing the
likelihood that the various countries will be willing to import or will be
able to export the quantities projected.
99.       As far as the trade balance for net exporting countries is concerned,
there is one case in which the figures in Table 13 have to be changed--the
EEC, where net exports are projected to grow substantially. Such a situation



- 56 -
Table 13: INITIAL PROJECTIONS OF SUGAR PRODUCTION AND CONSUMPTION IN 1990,
ASSUMING A CONSTANT PRICE LEVEL OF USIO/KG IN 1970 TERMS
Production
Country                          Production     Consumption         Less
Consumption
… -------   ('000 metric tons)-------------
WORLD                             110,081          119,601        - 9,520
Developed Countries                37,340          38,685         - 1,345
US                                5,768          11,594         - 5,826
Canada                              137           1,282         - 1,145
EEC                              16,250          12,065           4,185
Other Western Europe              6,187           6,009             178
Japan                               696           4,664         - 3,968
Oceania                           5,234           1,274           3,960
South Africa                      3,068           1,797           1,271
Centrally Planned Economies        20,431          29,794         - 9,363
USSR                              9,056           13,370        - 4,314
Eastern Europe                    4,401            5,696        - 1,295
Asia                              6,974          10,728         - 3,754
Developing Countries               52,310           51,122          1,188
Africa                            5,976            7,463        - 1,487
Asia                             14,749          21,731         - 6,982
India                           3,994           5,974         - 1,980
Indonesia                         780           2,608         - 1,828
Philippines                     2,747           1,752             995
Taiwan                            836              560            276
Thailand                        2,963            1,241          1,722
Other Asia                      3,429           9,596         - 6,167
America                          31,584          21,927           9,657
Argentina                       1,219           1,321         -   102
Brazil                         12,190           8,458           3,732
Colombia                        1,849           1,580             269
Peru                              824             872         -    48
Other South America             1,994           2,432         -   438
Cuba                            5,529             775           4,754
Dominican Republic              1,094             321             773
Mexico                          3,658           4,674         - 1,016
Other Middle America            3,227           1,494           1,733



- 57 -
is rather unlikely in view of the enormous costs of these exports: sugar
export subsidies given by the EEC have often exceeded the total value of
these exports. It has therefore been assumed that the EEC will not allow
its production to exceed its domestic consumption by more than 10%. The
net trade projected for the remaining net exporting countries is within
the range of possibilities.
100.      As far as the trade balance for net importing countries is con-
cerned, unrealistically large imports would be required by the five countries
that have the lowest per capita consumption of sugar: Centrally Planned
Asia, India, Indonesia, Other Asia and Africa. By 1990 the projected imports
would require more than half a billion dollars for each of these countries
or regions in 1980 terms. Such a level seems unlikely in view of their
balance of payments situations and their development priorities.
101.      To avoid the unrealistically high levels of imports implied in
the initial projections for the five countries mentioned, it was necessary
to drop the assumption that the income elasticity of demand would not
decline to the same extent in these countries as it would in the high
consumption countries in the near future. From the point of view of
the analysis of consumption, this may not be the ideal solution. Never-
theless, balance of payments considerations do not allow a different
conclusion. Thus, for the final projections, the same type of equation
was used for these countries as was used for the net importing developing
countries with high consumption levels. 1/
102.      The inconsistency in the set of consumption equations caused by
the balance of payments considerations is only superficial. What will
happen is that domestic authorities will limit consumption by retail price
increases or by rationing. Thus, balance of payments considerations should
not change the form of the consumption equation, but only the values of
the independent variables entering them. However, since the equations do
not contain variables for domestic policy, they had to be changed to arrive
at the appropriate result.
1/ This means that in the final version of the model equation 13 in chapter II
was used for all net importing developing countries and regions.



- 58 -
103.      In comparing the model results with projections from other sources,
it turns out there are very few independent estimates of consumption. Those
that are available have generally been derived along the same lines as the
projections in this paper. The only problem is the consumption estimate
for the US, which does not sufficiently reflect the accelerating displacement
of sugar by high-fructose corn syrup (HFCS). Therefore, the US consumption
estimates for 1985 and 1990 were lowered by 1.0 and 1.5 million metric tons
respectively. 1/
104.      Unlike for consumption, there are numerous estimates available
for production that have been made using other than econometric techniques.
When the initial projections in this paper are compared with those estimates,
very significant differences emerge in the cases of India, Indonesia,
Argentina and Cuba. The initial projections here imply that production
in those four countries will virtually stagnate at the level reached
in the 1970s when prices remain at US¢10/kilogram in 1970 terms (US¢15/lb
in 1980 terms). However, recently efforts have been made to overcome
this situation and lift production to higher levels. Therefore, independent
estimates of future production capacity exceed the initial projections
here by a considerable margin.
105.      In this case the best way to correct the projections is to increase
the coefficient b2 (see equations 20 and 21 in chapter III) by a certain
percentage. By doing so, the level at which production will stagnate
is increased by exactly the same percentage. In all other respects,
the behavior of production remains the same. In light of the independent
estimates available, the coefficient was increased 100% for India and
for Indonesia and 50% for Argentina and Cuba. 2/
106.      There are, of course, additional differences between the projections
given here and independent estimates. However, their absolute magnitudes
are small for the most part, and since it is not the objective of this exercise
1/ The additional substitution of HFCS for sugar (additional to the one
already implied in the consumption equation) was assumed to increase
linearly from 200,000 metric tons in 1981 to 1 million tons in 1985,
and from there to 1.5 million tons in 1990.
2/ The increase was spread over the projection period of 1979-90 by increasing
the coefficient at a constant rate of 6% and 3.5% for each pair of countries
respectively, leading to a total change of 100% and 50% by 1990.



Table 14:  BASELINE PROJECTIONS OF SUGAR PRODUCTION, CONSUMPTION AND TRADE, 1985 AND 1990, BY COUNTRY
Production                       Consumption     _                   Exports                         Imports
1974/76     1985      1990      1974/76      1985        1990      1974/76      1985       1990     1974/76     1985       1990
--------------------------------------------(in '000 metric tons)--------------------------------------------------------------
WORLD                           82,345     105,183    115.249    79,814     101.516     114,696     21.638     27393      3          21459      27.393     30.276
Developed Countries             25,507      32.231     35550     31,433      35.464     37.245       4,58       6,408      9.403     11.961     11.480     11,375
Us                            5,930       5,787      5,795     9,822      10,181     10,115         III         50         50      4,331      4,768     4,419
Canada                          125         146        133     1,002       1,220      1,285         61          40         39        976      1,155     1,197
EEC                          10,278      12,783     13,291    10,684      11,621     12,083      1,233       1,566      2,166      2,132      1,350     1,100
Other Western Europe          3,540       5,761      6,838     4,621       5,530      6,015         164        308      1,135      1,642        390       360
Japan                           530         716        702     3,105       4,199      4,676         43          20         20      2,637      3,549     4,000
Oceania                       3,087       4,223      5,484       980       1,182      1,274       2,142      3,188      4,491        204        268       299
South Africa                  2,017       2,815      3,307     1,220       1,531      1,797        832       1,236      1,502         39        -         -
Centrally Planned Economies     16.598      19.509     20,736    20.862      25.422      27,835        649        850        850      4.662      7.461     8.055
USSR                          8,409       8,984      9,117    11,518      12,797     13,370         85         100        100      2,951      4,250     4,403
Eastern Europe                4,222       4,768      4,527     4,614       5,399      5,699         501        700        700        904      1,578     1,910
Asia                          3,967       5,757      7,092     4,730       7,226      8,766          63         50         50        807      1,633      1,742
Developing Countries            40.240      53.443     58.965    27.519      40.630     49 616      16.403     20 135     20.023      4.836      8.452     10.846
Africa                        3,344       5,070      6,001     3,899       5,772      7,092       1,151      1,300      1,300      1,859      2,162     2,415
Asia                         12,683      17,281     17,617    10,791      16,807     20,587       3,938      5,338      3,528      2,727      5,319     6,568
India                       4,857       5,605      6,243     3,888       5,165      5,942        792         296        279          0        -         -
Indonesia                   1,105       1,278      1,481     1,287       1,962      2,404          0         -          -          121        697       925
Philippines                 2,771       2,749      2,804       881       1,403      1,753      1,385       1,227      1,033          0        -         -
Taiwan                        803         943        761       304         463        560        491         464        199          0        -         -
Thailand                    1,319       3,760      2,687       539         919      1,241        792       2,821      1,442          0        -         -
Other Asia                  1,828       2,946      3,641     3,892       6,895      8,687        436         530        575      2,606      4,622     5,643
America                      23,279      31,092     35,347    12,829      18,051     21,937      11,314     13,497     15,195        250        971     1,863
Argentina                   1,486       1,552      1,542     1,059       1,218      1,321         383        267        211          0        -         -
Brazil                      6,822      10,086     12,665     4,886       6,974      8,459      1,762       2,839      4,165          0        -
Colombia                      933       1,514      1,848       788       1,232      1,580        142         278        268          0        -         -
Peru                          962         849        817       550         717        872        389         117        -            0        -           57
Other South America         1,754       1,856      1,997     1,427       2,029      2,435        470         300        300        220        532       747
Cuba                        6,168       7,795      8,386       518         689        781       5,666      7,055      7,597          0        -          -
Dominican Republic          1,229       1,123      1,094       168         259        321       1,010        851        771          0        -         -
Mexico                      2,728       3,322      3,660     2,540       3,714      4,674         242        -          -            0        399     1,015
Other Middle America        2,136       2,995      3,338       893       1,219      1,494      1,250       1,790      1,883         29         40        44



- 60 -
to give the best possible estimates of production for the individual countries,
no further changes were made.
The Baseline Projections
107.        After the changes discussed in the previous section were incorporated,
the model was used to project consumption, production, prices and trade. The
results are summarized in Table 14 and, as far as prices are concerned, in
Chart XI. OECD GDP was assumed to increase at rates of 3.9, 3.4, 1.0, 3.5
and 4.0% in 1978, 1979, 1980) 1981-85 and 1986-90 respectively. GDP growth
rates in each country were assumed to bear the same relationship to the
growth rate in OECD GDP as they did in 1961-75. 1/ Population projections
were taken from the UN. 2/
108.      Not unexpectedly, the model shows that its assumptions imply that
the cyclical behavior of the sugar economy will continue. Prices under the
baseline assumptions increase rapidly in the early 1980s, peaking in 1982.
They then decline to a low in 1987, after which they start a new upswing
towards the end of the decade. World consumption grows steadily to 102 mil-
lion metric tons in 1985 and 115 million tons in 1990. Production, under
the influence of the price-investment cycle, increases more irregularly,
reaching 105 million tons in 1985 and 115 million tons in 1990. Trade
increases at about the same rate as production and consumption. The share
of developing countries in production, consumption and imports increases
significantly. However, as exporters they lose some ground to the developed
countries in relative terms.
The Size of the 1980 Crop
109.      One of the crucial variables in determining the short-term price
outlook is the size of the 1980 sugar crop. The baseline projection for
production in 1980 is 90.6 million tons. However, large deviations to
1/ GDP growth rates for 1961-75 were determined by calculating the compound
growth rates from the average for 1961-65 to 1971-75. The annual GDP
growth rate for each country was then divided by the growth rate of
OECD GDP over this period. Next projected OECD GDP growth rates were
multiplied by this ratio to yield the individual GDP growth rates. An
exception was made in 1980. Growth in non-OECD countries in this year
has been calculated assuming an OECD GDP growth rate of 3%, rather than
the rate of 1% used to calculate GDP in OECD countries. This was done
because it was not believed that the predicted low growth rate of OECD
incomes would be fully reflected in the income growth rates of developing
countries and centrally planned economies.
2/ World Population Estimates and Projections, Rome: FAO document ESC/ACP/
WD.76/., December 1975.



- 61 -
either side of this figure may occur as a consequence of good or bad
weather. Therefore, alternative projections were made assuming the 1980
crop to be 1.5, 3.0, 4.5 and 6.0 million tons higher and lower than the
baseline figure. The resulting price projections are given in Table 15.
110.      Table 15 shows that the projected prices vary rather drastically
depending on the (unknown) outcome of the 1980 sugar crop. Even if we
assume that the range implied in the table (84.6-96.6 million tons) is too
large, and that the outcome in all probability will be between 87.6 and
93.6 million tons, the corresponding price ranges for 1980 and 1981 still
are US15-22/lb and US119-30/lb respectively (both ranges in 1980 terms).
111.      The table does not only show the wide margin of uncertainty that
has to be accepted in sugar price projections, it also shows the way in
which prices are related over time. A relatively small 1980 crop will result
in much higher prices in 1980 and 1981 than a large crop, but prices will
also decline much more rapidly afterwards (and, because of that, again
reach higher levels towards the end of the decade). If the unweighted
average of prices over the whole of the period 1980-90 is calculated, there
is little difference between the various scenarios. The results suggest,
however, that, at least in the upward phase of the cycle, producers have
little to gain from price stabilization efforts: even at a zero discount
rate they benefit from increased instability as far as their average
revenues are concerned.
A Confidence Interval for Projected Prices
112.      In the previous section price projections were made under different
assumptions about the size of the 1980 crop. However, other variables can
turn out different as well. And deviations of actual values from the ones
projected here can be even larger in subsequent years. Thus, an almost
infinite number of deviations of actual crop results, consumption require-
ments and stock developments from those projected can be thought of, leading
to an equally large number of possible price developments.



Table 15: SUGAR PRICE PROJECTIONS UNDER DIFFERENT ASSUMPTIONS ABOUT THE SIZE OF THE 1980 WORLD SUGAR CROP
Sugar Prices Assuming a 1980 World Sugar Crop (in millions of metric tons) of:
98.6       95.2        93.6       92.2       90.6        89.1       87.6       86.1        84.6
---------------------------------------(1980 US¢/lb)---------------------------------------
1980         12.88       13.93      15.10       16.41      17.88      19.60      21.60       24.00      27.00
1981         15.72       17.41      19.31       21.43      23.83      26.57      29.65       33.09      36.96
1982         25.10       25.51      25.84      26.07       26.14      26.05      25.78       25.26      24.44
1983         28.80       27.53      26.17       24.73      23.21      21.60      19.92       18.18      16.39
1984         24.14       22.66      21.18       19.69      18.21      16.71      15.24       13.76      12.27
1985         18.12       17.17      16.18       15.19      14.20      13.20      12.17       11.12      10.04
1986         14.31       13.81      13.31       12.76      12.20      11.62      10.98       10.30       9.57
1987         12.50       12.40      12.29       12.17      12.00      11.82      11.59       11.32      10.97
1988         12.15       12.38      12.62       12.87      13.09      13.32      13.52       13.69      13.81
1989         12.96       13.40      13.85       14.34      14.84      15.36      15.87       16.38      16.86
1990         14.39       14.86      15.33       15,84      16.36      16.88      17.41       17.94      18.44
1980-1990
average /a  17.37       17.37      17.38       17.41      17.45      17.52       17.61      17.73      17.89
/a Unweighted average.



- 63 -
113.      Fortunately, today's computers are powerful enough to make a very
large number of price projections under the assumption that consumption,
production and stock changes in each year will show random deviations from
the projected values. The distribution of the resulting price projections
for each year can then be determined and from it a probable range for
future prices can be derived.
114.      The degree to which actual outcomes are likely to deviate from
projected values can be derived from the differences between actual and
simulated values over the past. Here the fact that no dummies were used
in the estimation of the model is very important--otherwise, the degree
to which actual values can deviate from the projected ones would have
been seriously underestimated.
115.      The impact of random deviations in world consumption and world
production on prices comes through their impact on stock changes. For the
stochastic projections of prices described above, it is therefore sufficient
to apply random shocks to annual closing stocks.   Over the simulation
period, the average absolute deviation between simulated and actual stock
changes was equal to about 2.1% of world production (the percentage is
of course smaller in the simulation that uses dummy variables, but this can
be no guide to possible projection errors). These deviations are the
result not only of differences between the actual and the estimated values
of world consumption and production, but also of differences between theo-
retical and actual closing stocks that occur in practice (represented by
the variable SDISCR in equation 27 in chapter IV). For the projection period,
an average absolute deviation between simulated and actual stock changes
of 2.5% of world production has been assumed, slightly larger than in the
past to account for the additional elements of uncertainty introduced by
possible misestimation of coefficients in the model.
116.      If it is assumed that the difference between actual and projected
stock changes is normally distributed between a maximum of 7.5% and a minimum
of -7.5% of world production, price ranges result as shown in Chart XI.
The ranges were determined by making 500 runs of the model using stochastic



- 64-
CHART XI
BASELINE PRICE PROJECTION AND
PROJECTION CONFIDENCE INTERVAL, I 988- 1998
60-
so -~ ~ ~ ~  ~~~         L¶
50-
0000 ,,
e  e
6  5
t               c   a~~~~~~~~~~~~~~~
8                           G
u             X
$             8                 as
p~~~~~~~~~~~~
E~~~~~~~~~ 
R~~~~~~~~~~~ 
O.           %%
t 0 -~~~~~~~ 
78  79  80~~ 8a8.384         8     6   87  8     9   9



- 65 -
stock changes as described. The resulting 500 price projections for each
year were ordered according to magnitude, and the range was determined
such that only 2.5% of all projections fall below the floor of the range,
and only 2.5% exceed the ceiling at the other end. Thus, the resulting
range could be considered as a 95% confidence interval for projected
prices.  The ranges for the first half of the 1980s, in 1980 US¢/lb, are:
1980                US¢13-26
1981                US¢15-38
1982                US¢17-46
1983                US¢14-38
1984                US11-30
1985                US¢' 7-24
The ranges for later years are probably somewhat underestimated, especially
in the upward direction, and therefore no specific values can be attached to
them, although the chart gives an impression of their size as implied by
the model.
117.       At this point it may be useful to stress that the results
of an econometric model are no more than implied assumptions. Different
ranges could be produced not only by different models, but also by the
present model, e.g., by assuming a different distribution or size of the
random shocks applied to produce the price ranges. Thus, the 95% confidence
is conditional upon the correctness of the assumptions--and even the
author's confidence in that is less than 95%.
The Rate of Income Growth
118.      One of the most important factors in the projections is growth of
incomes. To test the sensitivity of sugar prices to GDP growth two additional
projections were made, one assuming a GDP growth rate of 2% per annum
less, the other assuming a growth rate of 2% per annum more than was assumed
in the baseline projection. The results are shown in Chart XII.
119.      A change in the rate of growth of incomes primarily affects the
level of sugar prices and hence the level of producer incomes. Changes
in most other assumptions lead to different patterns of price development,
but leave the long-term average levels unchanged, and thus affect the dis-
tribution of producer incomes only over time.



- 66 -
CHART XII
PRICE PROJECTIONS AT DIFFERENT RATES OF INCO4.E GROWTH,
1980-1990
60-
- CASMI?E PROECT 48
- - -  E MUM Th. 2%I P.A.
W-:tE MWII a2 P.A.
40-
1
S                      I     %
E                            %%~~~I 
R
I~~~~~~~~~~~~~~~~
b 20                                  %
78   79   80 80     82   83   84   85   86   87   88   09  90



- 67 -
120.      Actually, the influence of a change in world incomes is even
more marked than can be seen from Chart XII, since world consumption changes
in the same direction as world market prices. The revenue change will
therefore be even larger than the change in price levels. For these reasons,
from a producers' point of view, the general level of growth of the world
economy is far more important than the success or failure of trade
negotiations or market stabilization schemes. However, because the actions
of the sugar producers themselves (unlike those of oil producers) have very
little impact on world economic growth, they still focus their attention
on trade negotiations and market stabilization schemes since these are
the only areas where they can bring about some change.
121.      A second effect of a change in the income growth rates is a change
in the sugar cycle: with stronger growth in incomes, and thus in demand,
the cycle becomes more pronounced. This occurrence is not unexpected,
since greater pressure on productive resources generally makes a market
more volatile.
122.      Most models for agricultural commodities assume a positive
correlation between the rate of world income growth and the price level
of the commodity. Prima facie this assumption is not unrealistic. A
stronger demand for agricultural commodities usually leads to increased
pressure on agricultural resources (especially suitable land) and thus
to higher prices. However, if it is assumed that real agricultural prices
will increase, it must also be assumed that the prices of industrial
products or services, or both, will decrease in real terms when incomes
grow more rapidly. This is only an assumption, although some support
for it can be found in the fact that during economic boom periods the
prices of agricultural products (and of minerals and metals) often increase
more rapidly than those of industrial products, whereas the reverse is
true in most recessions.
Changes in Sugar Policies
123.      Government policy is always an important variable in determining
agricultural production. It becomes especially important, however, when
production would not be possible without active government interference.



- 68 -
This is the case with the production of beet sugar in most Northern
Hemisphere countries and with the production of alcohol from sugarcane
in Brazil.
124.      The two largest sugar beet producers in the world are the EEC
and the USSR. Together, they produced about 21 million tons of beet sugar
in 1977, out of a world total of 36 million tons.   Since sugar production
costs are well above world average levels in these countries, production
is only made possible by heavy protection.   In the EEC, protection ensures
domestic market prices that are so attractive that domestic production
has to be limited by quotas.   In the USSR, acreage and production targets
are directly determined by the government. Thus, in both countries sugar
production is clearly a matter of government policies.
125.      Production policies in the EEC and the USSR have had a profound
influence on the world sugar market, and have contributed much to the violent
price cycles that occurred over the past 15 years. Between 1961-63 and
1965-68 world production increased by 12 million tons as a consequence of
the 1963 price peak. Of this increase the largest amount (3 million tons)
came from the USSR. Similarly, from 1972-74 to 1976-78 world production
increased by 13 million tons as a result of the record prices in 1974.
This time the largest increase (2 million tons) occurred in the EEC.
126.      Whereas sugar production policies in these countries are definitely
responsive to high prices, their responsiveness to low prices is much less.
Unlike most developing exporting countries, the EEC and the USSR can afford
to keep up high production levels in case prices decline. Thus, whereas
they contributed strongly to the overexpansion following the 1963 and 1974
price peaks, they did little afterwards to repair the consequent situation
of low prices by adjusting production downward.
127.      From the above it follows that assumptions made about USSR and
EEC sugar policies can crucially affect future developments in the world
sugar market. For the USSR, it has been implicitly assumed that no major
drive towards self-sufficiency will follow the expected high sugar prices
in the next few years, especially in view of the commitment of the USSR to
buy Cuban sugar. However, it is not impossible that the USSR would one day



- 69 -
CHART XIII
PRICE PROJECTIONS AND CHANGES IN EEC AND USSR SUGAR POLICIES
(1980-1990)
58-
-aBmE PRojmCi=;s
--- EEC .me L.a  v Uzrcr   To 80% I 1986
--a- (USOR 2ICREAs  *aFXC3LMY TO 100% IN 1986.
40-
0
U
S
$30-
P                         /%
E                                   "
R                               '
78    79   80    8Sl   82   63    84    85   8fi   87    88   8A    90



- 70 -
decide to become self-sufficient in sugar. The impact of such a decision
on world market prices is illustrated in Chart XIII, assuming that self-
sufficiency is reached gradually between 1980 and 1986. 1/ If this process
were speeded up, the initial effect on world market prices would of course
be much stronger.
128.      The assumption made for EEC policies was that production would
not be allowed to exceed domestic requirements by more than 10% because of
the high disposal cost of surplus sugar. This seems to be a fairly safe
assumption. However, in view of the frequent attacks on EEC sugar policies
it might be interesting to see what would happen if the EEC lowered its
self-sufficiency ratio. The effect of such an occurrence on prices can
also be seen in Chart XIII, under the assumption that the EEC will lower
its self-sufficiency ratio from 110% in 1980 to 80% in 1986. 2/ Again,
a faster adjustment will of course result in stronger initial price responses.
129.      The interesting aspect of the changes in assumptions about EEC
and USSR sugar policies is not that they lead to world market price changes,
but that the world sugar economy seems to adjust to these changes rather
well. Actually, once policy goals have been reached, world market prices
tend to come back to the level they would have reached without these
changes--prices after 1990 converge even more strongly than shown in the
chart. The long-term effect of these changes is mainly to change the
level of world trade, up by 3-4 million tons in the case of lower self-
sufficiency in the EEC, and down by 3-4 million tons in the case of a
self-sufficiency drive in the USSR. The prices at which this trade occurs
seem to change only in the short run.
130.      Another country of which sugar policies could have an important
influence on the sugar market is Brazil. In order to cut down crude oil
imports this country has an ambitious program to convert sugar cane into
1/  Production in the USSR was set equal to the maximum of production pro-
jected by the model equation and a percentage of consumption increasing
linearly from 70% in 1980 to 100% in 1986 and beyond.
2/  Production in the EEC was set equal to the minimum of production pro-
jected by the model equation and a percentage of consumption declining
linearly from 110% in 1980 to 80% in 1986 and beyond.



- 71 -
alcohol for use as a fuel. In 1979 alcohol production is expected to exceed
3 billion litres. Assuming a production of 70 litres of alcohol per ton of
cane, and a sugar yield from cane of 9%, this would mean that in 1979 about
4 million tons of sugar were "lost" to the alcohol program.
131.      By January 1, 1980, there are expected to be about 250 distilleries
in Brazil, of which about 150 will be annexed to existing sugar mills and
100 will be independent. The independent distilleries will of course
keep producing alcohol from cane regardless of sugar prices--Brazil's commit-
ment to its alcohol program is too firm to assume a mothballing of these
factories when sugar prices are high. The other factories, however, could
switch to sugar production at high sugar prices, a switch that, with crude
oil prices at US$25-30 a barrel, would be economical whenever sugar prices
exceed US¢10-12 a pound.  The consequence would be a temporary reduction
in the alcohol to gasoline ratio in gasohol, which would not cause any
problem. 1/ Thus, if the government so desired, it could adjust its
subsidy policies so as to increase sugar production by up to 2.5 million
tons at relatively short notice when prices increase, and to withdraw
the same amount again when prices fall. If the Brazilian government
would decide to promote this kind of flexibility, future sugar prices
would be more stable than those projected in this paper, where no such
flexibility has been assumed.
Conclusion
132.      Given the assumptions--that income and population will develop
as projected, that price and income elasticities have been estimated
correctly, that the price equation captures all factors involved in the
price formation process, etc.--the conclusions drawn in the preceding
sections are difficult to contest. However, each individual assumption
can be questioned, and changes in the assumptions will unavoidably lead
to changes in the conclusions.
1/ Alcohol can be blended with gasoline up to a ratio of about 1:5 in Brazil.
Within this limit, the ratio can be varied without problem. Since this
ratio will be closely approached in 1979, further expansion of alcohol
consumption will require cars operating on pure alcohol. Production for
the latter market will of course have to be totally independent from
sugar prices, since cars operating on pure alcohol do not run on gasoline.



- 72 -
133.      Even if it could be assumed that the assumptions underlying the
model are correct at the moment of writing, future developments might
invalidate them. Therefore, extreme care should be taken in the use
of these, as well as of any other, projections. Obviously, the degree
of confidence in the projections should decline when time progresses
because cumulative changes can make the assumptions more and more
inaccurate.
134.      As an example, one can look at the 95% confidence interval
for projected prices given in Chart XI. The confidence in the projection
that the 1980 price will be within the interval given in the chart should
perhaps be about 85%--not 95%, since many of the assumptions, including
the one about the distribution of the stochastic aberrations, could be
reasonably questioned. Confidence that prices will fall within the
ranges projected for later years should decline to a minimum of perhaps
60% in 1985 and beyond--not much lower, since even without making any
assumptions at all ranges as wide as those in Chart XI will probably
cover the actual price more than half of the time.



- 73 -
ANNEX I: BASIC DATA
List of Tables
Table No.                                                                Page No.
1  Sugar Production by Country, 1951-77 .74
2  Sugar Consumption by Country, 1951-77 .77
3 Sugar Exports by Country, 1951-77 .80
4 Sugar Imports by Country, 1951-77 .83
5  Net Sugar Exports by Country, 1951-77 .86
6 GDP by Country, 1960-77 .89
7 Population by Country, 1960-77 .92
8 GDP Per Capita by Country, 1960-77 .95
9  Sugar Production Per Capita by Country, 1960-77 .98
10  Sugar Consumption Per Capita by Country, 1960-77         ....  ...... 101
Note: If the International Sugar Organization (ISO) is mentioned as a
data source, the data have been taken from the following publica-
tions:
1951-60: The World Sugar Economy: Structure and Policies,
Vol. II, London: ISO, 1963.
1961-65:   1967 Sugar Yearbook.
1966-70:   1972 Sugar Yearbook.
1971-77:   1977 Sugar Yearbook.



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ANNEX I
- 75 -
Table 1: SUGAR PRODUCTION BY COUINTRY, 1951-77 (Cont'd)
(in thousands of metric tons)
Y'EAP   I NriOrEc-.  TH I LFitif'   TFi I Il iri  n1. A:IA  AF'HGENT.      BPFi'7I L
I151      426.- 00      --:. :i:  7.    tji I I                7:.0 1-fi 
1952   4.~. o  ':'  ~ 7  0 :         .4ri rn  -I'.                     j 3 . f  3
1953  620. (In   3~~~~~~~~~~~~~~~~~~, C fs  Clt?. 00::4 fi  74 f. fil rf  12.(
19514    471 :R.i * OI  4'3. 00      5:: 0El f:47.(           30   I      1::
196  i:i  i.: ~~~~~~~~  i~~~i (i  1.41n1 f  OF lii  f: (   i  90-' 3  il1 li
1?1       i-..  iO         lii        *  lii45       on      6::-,: C. fil 
1964   -,   n:i     1'.-,,.  lii  -4  li4    f44   1:1 C4 'Iu             14.
1965     11-4~~~~~ 110 C,  120. CiriO  C9 14. (ri  I fi  .4  i31i9 i:ii  4J14:'. 00I-
1 6 .? nE-5    C,11ft  269 4 :(     9 4'  01 3.      .? C   111 35  C, i) J:i34   . 0lI'
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.W  c:   }.  C a=t. CT t *. t.L O 4 Il fa CU - ) . al C, a. IC  :r  *  l   CUi. Q% C, e =,..  t0  .-4fl C .=.  tj C Z l C  f C} C
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C.) 0
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g  : _    C~ O= J  C' C C  C'- f   C =r C O= C' C'0 C' a=- C' C5 a= O C' C= O= a='  C -9   C  CO C= C_  C a= O= C. C=l C=l C. C= C= C= C. a~  C. a,4 = = }
U,~~C'......-   ..~.   .....'  -C-c  .  -e a a~~     4.  ... ... CL  (/         ................-.
C    Ebj..-4Cn .- .4 nj crnu., cc'' *e-  - tt.Jt.am.olco: @4   *  &  - ''U.3  046BiJ- - o-lrin  c' -IIi-;C *:c'r-4   C ' -  ZfLifl- cccr-,
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C_ D i _                                                                              I -0 t r   I.- C-
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o:  r.-i u 7 ti-, 9 U- W- (( 0 i   tI cC)  kL}  %L tO   C t-X  rC'-   r0 r   r  O- r4 rCL  - Vu u- ' u-, un ur u'I I-  u. a.- C  -   Cn i  L- L4 IC- L- r- -0  L  r - r - r -  r - r -  r - r
w  *'ata. a  a-. a. a. a-.a. a..;-.  .r.;T aT  cm c' a* a T  . c T  m. a a, a. a.an..  *T  t v w  a.  .t a. aa  a  .  .  .  .  . T  . a T. 7  -  ti   . *T. T,
:)  --4 - - -  -  -4-44-  -4--_4_ _-_4_-_4_-__ 4_-_ _.- _ 4 __   - - - -4_  _-4 . -4_----4  - _41 ______________________



- 81 -                            ANNEX I
Table 3: SUGAR EXPORTS BY COUNTRY, 1951-77 (Cont'd)
(in thouisands of metric tons)
YE A'P  Trt-I ri OF 4. . ... THh T LFrIN  TR TI.1IRN  n. ThFIA  FiPiENT.  :PFPH-IL
1 9^5 1      . r! rl ....t.n..      r'4. rfi  r      i fi     1 . rti I   4:. n 1
i 952       1 . cii:' ...:..... i iTt  473  o  R::62 0':i  r  0 -0.cs    I-} rl tt  4 -:
195'::  -  --  t:iO      o. t:t ft  '   ........ t: nl 4l *  . t:t -:  I1 n, 0 (l 24 .  . i31
1'54      a1 a. i:t 0O*........       . 0 t:t  ?34. ftttl     t-R 1ft 'l5 n  4f.
1-5.      l    tt. rft   ft....  ti ftli  c':-:: rft  ?27  .  t  :34  t ftl-  9l:: 1 -
1 ? 6     17' 5. fill    n. ci .: 7i::: . ti  U  4 -: . 0J t   t  1 0 .      ii i.
195  1     4.9.  D:t    t) .    i r  ::57. ct:n  4  -lo :I:             4  lir'
I -'-;~    :R7  it ft    0. hi IT  73 8..9. 00  .  1 .  f     fl *:-  f  76 . ri-i
19   't)1  - :5  . 0l l:t  ft....1. ttf1 i &  -1 4. Ofret  4.  :R .irlfr  1 1 :3. O  sct  :5 .= . fl
5:. 31      o . . t      1                       . rl 64.e IT ft  R tt * -f  1:R  . L t  4.l
196-. 2    6. 1 . ,:it:tl!   ...... 4:R:. Oct  6) b 1 . Ut!   l! 441, .UU  *:*:. Ut!i -  - {  479, .n ri
196 1-164.      :  -     ti  ti    r-:91. Rfl       :i      4113 i      43I. - :. o
1964.      90!. tI  i 5  1. litl   :16.00         .. bt '51  4 Ili 5 lt,:  26.F t:tt
1  9i6 9     . oc        t.r       -  1 J. nt   L 4 .  fti- ri   I f .  l  : 1-7:4  . '  ,.fr
1 Qw  f   r! . ~~~- 1  4 1     ; l  .r        - ri  -j 1. -1i       4 1  9 . ri I
1966       .1.  t 0        flIt      I. it     447. r           111. 1  1 -:.  -f-
1t963       :t. tn  tiC  1'1. nn  Ei-Si. rt! 4n  -1.-l      ':.4 . n  1079.0 L0L[
1  4970      :i. tt:      ti5  4I6 .' . ; ti:t  44n  5 . t0  141. it:Ci  11.   OfE t-
1971        t1:. Cii:'  14  ir    541. rtit    4-it, ot:    121. OItn  1 ':. 4  8I
1972       54. ,:tl:  45-5. tift   5 0. n t:fiI.' tIft      1 7. Ift    C. Rifi
1973        ft. firf      l f. t   q5f n. nt n                   o'      2 I5 I :t Itt
1   74?     (i. tt r!  9-1 . n lr  55:   . i C,  4 :4  .   -  66 tI I  :t . i: :  a :r -1: .
1975 0       . r i           I-.:-:  ito  4 2i6 . t a  l  44,  1-) 9 . t i:  1 71 .R  tt r-0
1976        0. 01:   1145 C,       si4. ri r1    I.. Ft     29.2i. t:ir  12. f-i
1 97        (ti. cii)  1 t  4   fit1  644. li nt  4  ii. 1 .n fi5 1SE 67. I  4I
YcEAF.  -::OLOMEBTA      PEPRJ    Ct MF.A...      c:UJBR  IIOM1.PEP.    rME:-:'Itr:o
1 951   rl    .  ft-  35     . f,f 1 7. n33   ft -f-47?  ftft  49r,. rt ft tntf
1974    c    . .I  :   'ft4 5 t4   2.4U. tl I'l  5' i  r . Ci  567. Ci :   . U-  
1 97: 5 ) I  )ll S1 1. 0 t:  E. 411 '1 1 224. n tl  5 Of    197. ol :l     3 ft cf
1954        0. I:tin      2it i249. iTt it-:6. ti :         5:2 . n Ci
1955:: t       t:t :i  .   iif 0 : . l - 246t. t:t Ti  4F.44 .-1' t:tft1-1 *1-l- 's'. t:i it 
1956       5l.3. t:tfiO  4c  :.Ij l   7l. t:lOl I: 4.  fifn  7-1 7 . fit7, C,4. t::2,t
1957        0. ft f   4 - .trt     416. ff4 0 fi  r. fift   75. rf     2  4 f ft~
1 959        t 4.  ti  4   n 1  f  t   -.  . ft ft  4,  . r1T  4*6 . ri f  :R . 1   ftI
1960        ft> Oft    *14''-      - tn'  , 0  r .  i: r  it.'1:99. tI'  4-- : 4 . Oft
1                   '?^  1-l  l-i . 9~~~~~~l rl 'i j  14. '| -4r .fl rlr 1c.- 1  i 7  ?7  , ".4  r c. l
1|?1--1   r., &)f} sn r   |    ::F. ( r!|  r.1 4q       ?.           5:-. jz
1961    r.      n 46 o , r, :ti!      .0. Cff Ic I L4 l       :: . ftC, r
19-7       40 5 . f tf  4r1 tI)    , 4  O         1 r  fr. 6 71. ff         .C, - t- 
19564      2. ::t     4    t lt     14. LIC   4     1-, nlt  t.1. :tf       .1:C
196r5     10|1. ttf:Ri Ottr        :59. t:ttt  * i-:. Oft   522. Oft    541. I!
1966      114.  t:i   4R  . tlt      -  t1.tn  4  *. 7 I-II)  5795. n : i:t. Al1
l'?5      cl)|. tI''  411 n        c4.  r      ,,- - i C.R        f:    J:,- 1. :
1967F-      ft: 0l    4 43l.1 .     cift   4.n ri tt.I. ', tt  673. t: t:t  971
19:       233  tt 1 T  459.L-F:-. lt:t  46 i:. fti  4-- 1  . OtTt  62. -r., ft  r., *, rti
19*?69 l  17| :: . ft ft  3 :n. ft Cf  467. ft f  4 2.   ft ft 1  . J : l ffll  615. ft ft
19?. 1    It16 . t:ttl  4c9.       4 '4tt. fi  ccI  t 1 .   7:9tt   1:1   .C1  ss'..
1972 2. .- t:ttt      4-:1.f1t fl  e,l nf     J4ft.1- ftt   1141 .ff 5-93.
1 97 3-   1 4. Of     407 t - t-l  :2 :: *l Oft  4 4 7 * ftf  I t :t ; . * tlf  9: : : r . 
1974      1 9L? 15 . O f  4 -2 tt  445. fIf    4 -1 , fII   1 f..  O ft  49  ftt.
1 ,~~~~911 . t'l ft4  2.f 447ft      f t    74    fjf 79      l . tf   17.f
I'-'-'    1 t4:t: Ti  t  2:4L . 1T11-  4. 5. tilt-l  1-4  . U-ll) U, =1. utl-l  :;1, . fIt-
1t77 '?fr.  1 i~t. ITItT  . :- 4, ri 412 .0  :91. fi  z 1. Of 1 l 7  116400  1. InI
1l * 7* :3            41C              Al-^>  l  ;.t 7RR. Il  I I I-e



ANNEX I
- 82 -
Table 3: SUGAR EXPORTS BY COUNTRY, 1951-77 (Cont'd)
(in thousands of metric tons)
YEArP    Pl. FiflEP.   AFR I lFi     llORLD
195 1     62L. 0:1 19 1     1 0   1 2227. 0 :
1952      111 . Cii'  2-.'. ;:;f  I "222 E. . fri.
19 9 5 3  7rio Ir,         ,-, ..  14599. OA
1954      7   5- . i-l I:  0:.i   1 .33'  u. wI!
1455     #744. 1:1     t -  I 10  wj  1454 CI. 'f: F
1956      t' 1'. ' :;  722. orIi '  1415:3. Q 'i -
195'7'"    39. A'C'    ::33 2. 00C  15475. 00i
19'? 5 :8  E-69. 0 0   795. 00    15763. CI
1959 -'-  ; i-I 273    726. 01-1  14 :3 - n. Of ;-
I 9 0      :3: 7. 0 I  6 -27. 00  1 7662. O1l
1 91      9>71 . 6 0   901 .     20i  2 954:8. 0 0-
1962      939. l Cl    911 . ri;  1 923:3. 010
1 963 -:   1 0.56 . 0 0l  1 C' os. ft 0  1 7759. 00
196--4   1 :995. Or'I   1          `1f. CIO  1 5. CI0
1 9;. e,  1 ;:3 . 0 fi  1 36-:t . 0n  1 9 4. o; A
1 I  t;  1 Ce'? .   : i  964 . Ci ci  1:34 1 1 . O Ih
1 967    1 0:3 4. C-; C 1 Cil I . ;i  2 LI ci r0 . OI-,
1 't E   1 4. IIrI   1 094. ! II  2c;475. 00C
196-'    1 C5''?. CI-I  119-. nC'l  1 :2 :9. r0 0
197 0    1     Ci C;   0:   0     C 21474 . Cl 0l
1971     1 794 . 0 0t  1 .:- 31 . rI I-I  2 0'=R 0
1 972    1 1 9I5. 1iC1  1, 4. A:;o  2 1 .-:5 . I
1973     lit>.9lUfI1 C;9. Ci C  1!t .C; C-i  2 21 . 0 Ci
1974     1 1 55. 0l0  -1 11 . fi 2 '19-3 5. 00-i
19`5     12 C'5.C''9   977. OCi r!  -20447 . ri Cl
1 976    131 fir;1     1     C- t  2 5  - -:-'4 . 0 0
19c77    13:n9. fir;  1 O nia.   L       f
Source: International Sugar Organization.



1,111 , 1-  'I , 1-i  I  li  I   0 '-1        i  ii-.1     ii  1
1.10 'Li  U LI ' 4::: '4  0 ii  ?ii 01  (Li '99:5:1.1   001  '  v 6
'0I  Ii        ':5I      1i  'iij  6   lu'  :59     i:l1-        :5:6I
'liii 'a  a~~~~( a ' i  iii. '8 :    iC  12::C       V 6        ii I        I.6
CIii'         Cii( 1-  '0 i  c   'I :::0C    ''       i  'I92.     I I l,cl::'R     I
cii-i  ci  lii  ' 0    I:i1-  LI x VtIi  'SI      Lia '- -:E : I.  ci i '0   1 6
lj Cl  (I  ci ii  o    i Li i- 2Ž:   fii  '6 9LiJ'CV      I    0(1 9l        9961P
*l i:i     i:i ii 'Ci    LIL           0   't9 -    ijO1 '.:56C??  I-(  *6 l96
*      ~~~~~Lii (I i  _ Liii' .-   Liii'."JL      '6$ 1     LI Ci 'i      £ 6 
i~~iCi 'C  Lii~~~i '0  iiLi 'I VUiI  i.iici      Li Li  C4:V? t  Ii (Ii  ii  I96
I  .1   ~I:i: ii     iii:i E'. 6   ii0i '59?    uC1- >21.    Cii '0       u961
Li I ' Ci    II Ci 'ci    Li i:i '      i E   ij ii 5Ii LI  9:5::5  i ci  0-   6961
ii: (iii, 62               n -  -       - - a,-      00ci( '0     896
Li I ,I-I I1:1io  'I       Lij LiLi i   Li Li '2Ž 9ii   '  2.  Lii.i  '-i  i    tn&6I
Li (i  ii Cl   i  '- I1   Li Li '  S Ii Li ' E:,      Li ii ' 2r:5.  CI ij 'ci  '?' . 1
Oici o        QI9Ci 'v6t'  CiC I1.II    Lio '69.&?    CLIi0 :66E  Lb 'aCIC E
Ciii '0  0 Ci ' V6:E:   i~~~~i Ci '  9   O  9  Lii  ' t 9V   Ci ui         E.6 I
II:i  C '0Cii '69          00'9 .Cii        E-68       u L 'E.:-,  0i0 '1      E: E. I
Ci Cl' 0  ~~~I-Iii 'l  Uii: .l fIn  iri l -( 01CiC  '0:t'     Ciii 'V       2961. 
Lii i 'Li     Lii ' 11    i ij '3.3'   u u 'u t      u0 'I~t      iiu1
d dd Ill1 H d  Hz I QH1J- I  3dC-U-- I .SHL  3dOdfB %3  *dSSfl    _   '.)IddH ':&  dUB9A
0ci 0-;22    1- hO 'E3.?8i;F C 00  :    li '662.1    I(Ii '811 WI  I  622.21EI
.i Ci' 5C. 2 ci ci 'e:19?  iij 'SS,-r 4  Ciici ':Ie.ZCi  00'l- 1r6z  00 VI      9.61
liCi *E, 1    (I  9V9?7 t -  00 CII  - ' 919   (10 't9E  ii*i t&  II) ? I,:I  - CiQ   I  9 2E. I
fi ii '21?    I- cl i *fl''L   i:ii ' I :2   CiO 't'91?;F ( C  Ci Ci '86iC 'ur'4F  VZ6E.I
0' C 961    ii u 9.t t    u,ii '-I u:   Iu   C1;E U Li 'SE?? uu iI0  'i u      62I.61 t
cl Ci  I k    (I (I '-  :-,;?  Li Li*2.9  I 00  V6?E!: R 1- i I u0  'LI iU ; e '2'  rV- E2.61
ClC ' 7?i 2 Ci  i  99 ?ci Ci '99:. 1    Cii '55 6 '' _ 1- i 0  E:V- E.  0j 1  tr  i  6CI
Cii  '9  1   Ci0 0  LI Ci :EV  Li Ii  Li Et.t  Li  ' I t C-;  ICi Ci, '66  E.  (1  Vii  . t'  ii 61 E
00 91CiitOE 1             C - '021                   II 'C: iii: '9(6   Liii  Vt. 
1.1 Ca 'I Cl  1  i3  9 ' 9T   I  Ci Ci  Fj 1 00'9     Ci Ci ' Ci 6  00E.&-      :9  I
Li Ci 'ii9    Lii i '29    LI Li '  :2:  LI IJ        I VIr.i i   E:.E.  Iu 'LI  :V:96
i~II';t Ci S  Ii 'u2.9     Lii '9: 4    iLi '29"'5                Ci- Li  liP   996
iiLi 'E91 ~~~LlCii I E'V-I  1-CiCE. '09  Lii ')2-~  00' 8E8    00' '=:      9961 
ii Ci         0 V 1  Ci i'P :  Ci 0'LiI$5   Cr0) 'I Et )1_  Lii '1) 9 0 -  LIC  E. ~ '  r-96  I
0011 'E-I     Ciii ICSI    Ci'9aIj      Li ISi '61Vt-  Ciili '&:   Cii '"'I
(10 '291       l Cii I95   (( '22        iCri ':      00l '        00   r. 2QI
* t' I    O-1Li L9I E'1  LiiLi dIJ 41 LiI'E       Lii '68 9    u 0   -,E    I1961E.
oi: i 'I) Cii   '   C,2    OL .1:i''   LiI  Wi- ':2  E.  iii  '2.1"'4  ifi)     Li`461I
Ci'  - :E.P I  CliCi '861  IiCi f '12Th  4 'l L Ci ' 9.1  LCI '1 9  ii I-I    6918 EI
ihiii '921  C~~~~~~~~~~~~Ii 'It, II CC 'LJI c  i1j  iiiii S?t.t  ilC '_9I-  I.  16
Liii '(.1 I  (I ii 91   C iCII 'iijI1  C-iCi '9?  00 '299        I' ii:-     9961, 
Lin   1L i       2L       Lii ' ~n     iL  .         I. 2Liii 'r       ,996
1 Li i VI I   Lii 'E'1    LLI 'LiBL     iDO '99       Lii '99iLI ill             E. I
C ij'IiI0C   'P (       i  ' I.      Iitii'V       Lii  '           4il C "'  5 961
UlI W63DO    [JUdeif        1L 3ddi'l '1'i  __ 3 330 H iJHF.JR     Hfl          dH3
(suol OTaT9a1 JO spuesnotpl uT)
LL-Tg6T 'AWLI'lflOD xq SLIOdINI '8VOflS  :T1aqvl



- 84 -                            ANNEXi
Table 4: SUGAR IMPORTS BY COUNTRY, 1951-77 (Cont'd)
(in thousands of metric tons)
'EFR    Irff'OHE.&.  THF I LAhD    T A I dilFtI  I  n . FCIA -. ihPENT.  :FC I L
1?51        4. (I :1    1'. rir      r!. 1 00  1 1i3 .  fi    iC. i:io      L. IIli
1952        (I:. oI i     . ri:l      fJ*. 03 0.  I fl 0 4 .fl  Cf:. ci ::)  oI . oc
1'9:         I. ':': II     ol 1. fin!          124I. Oft    3.4. fiI Al. fCIA
1 ?554      f0. 00l      i::  :  t:-  i *I     .- j:'I  . 1r   ii r.  i:: :i i  *!   -i
1@>',       1. ri ri   ii::. i~ ri-l  c  oi.   1    Ei-:. oi    . rii      ll.ri I
ci.M,  i:.ilrE 4.  00    fjl. ::  i C14 s. II ifi   . cii-,   I. Cj II
1 9::-       ?. I fof   17. rin  r     . 1:10  1  74.  I     50.   r0 Cl. ij lri
195';4          (I.        (I . l    ri  n n f:  4' IJ  clf o. (I ff:. O:
* 0 1-i. oi:i                       11II. Q: Ilo 0. 1-                  ' o  1 093  1 f  1-1 0Ijl-
11961. iio            :i.(I:i,    o  of:cs       i.0:        ci. ctCi. I'll):
l'>tOl~~~~~~~~~~~L (I{<c  C|fl  (I.l-p A ,,|.. Ci       (I !ll j_
1963      O. 00        0l. ci (I:  ,. 0 ri   1  Cf*. nl ll   0. cil i       (Io
1965     i::~~~C. (If:  0. co     0. ci 0   A 2  47 .I rII  f. ofni- i.0 cic
1 Q . ,    2: . ri ci    c.  0 :I    Ci. ci::,  1 ,' 4 :1. Ol l  :!. 0:  ci  .  : ri
1 965       r. on        0.  ri       (I. r-l   oi J)  7 - n r  ii  o {i .I)  i 0. 0  fl
19;70.    21A?. 0  _     II. Lii     ci 0. dLi  c- ? 13.1r.    n 1 ii *l o. r- lr
1'>;1     191. i:iri    ft. rlr     At Ofi    *::. Of -        00          fO= or-
i .: 41 :-:. i(Io       r. 0: cI    C!. i:ici  L' r-I. r:0 Ic. 0 cf       0. cii)
1 '9       6 0 . i:0 1i7  rI. c!:!    r!.  cil  2  -:72   ;  :::  ci. i . 0  tj. t: 0
1  r 9 ~__- 1  17 5I.  0  r!i ci. l0  I . rc0  rE .4:? : . 0 ci  -  C. Cf ii  ,:. cI1!:
1 -9 71,  1i  I 23:. Ci fl  n:.  i ril   o. f0 (I  ,D -  R . nr n  n. or:1)  0. r nI
1 7.' 151. (Ill F,       l. cfl ri    . 01! cf  L  1!t1   .     cif       ri.  Cf1 (I1
97EAR   i:OLOE                    :   (I.A . ll  4 (:I.1 . PR  E  rr-l fM.EP II  *1. E  XIC
1 951       fi  c        i1 ..i Cf -3   rift :0i .  0 0:,       l. ci i:  ri: 
1195f     1' 5. 0 ri1 . o0         4u, . cii:     Li . iJii i-. 0 0        i:. 0r,
19759      66OOPEI .EI cf. RplEPri. 0Ij '-.:, .E R        nn   0 E. 0lE:-' 0i-.1
175. 00Q       0. :i         0     .        0        I4:n.  c.:  0. 00 i
i 9.55 `c' Cl l          11. 0l    :3Esq. riO  r1 1. Cfln      C. 0r        r!. Cli 
1 95-.      1 00. (I     1:1. 0 r!  411C.0Il 0.00              0n. 0        ri. 00
1952      2 . t10      l. (10    3 i  flI        i . i:1i    ci. 1 11    -.   Ol
'Rs'j5 ~~~   5~. on1 1  1.0 111  4 0 7 .   fl§-  (I. r0,   -lS rAl f-   Cl . cIII
95'4    '   = .         r: . . i l     ff r!  .  n  - . r! i II  0  l 1- :3. I
1955:-       cf4  . 0 f rlI}.I l i  4: n- 8 . r! ri  ri .  l ri  ffl .r l:l :l: .c ci
1956.      .5 . rl r,    0l.''l      l t  -r         !i. 01- I--l- II  A    . li l
'I t         -     . In                          2:224 .  0.  :cf:i c)    8 i. 0l
1 95'?t    44fi. i:ici   n. fill   .2-5   . ni    n. nini     oi. r:n      ':C. n.
1959    -    -. i:fo       'j Ir:    H. on    -   n . c0  c . 0i:  n:. i:,,,  .   cf
1 9w        1-1 E.  §1-     - 1  . 01 ff  ri  I 264. Cl Clc  l  ft0. fi cI  1 | .1-I 11
1 ?--l .                 1..' .0. 11 Ij           Ij A  1i  n  1! .   II il  .
1 e         CIj. 1111    C O.011   r.:-.R. I', Il  1:1.        cf- .cf (Ij  1- IjO
1'4e:-:~ ~ ~ ( l. IjcfO  Ij   f!1  -4.-:1. Ul!  11 . Ijll-  li . Ijl    1. 
,1 l 9t E1 4  cf. (II. I11 1      1 :.r. _   l41.  fl ri     1  r,t 
a,~~~~~~~~~~~~~~C                           II (I 1   -  I . 1.11   l 11   1 i)1.1
96> '.°     !. 111,     1' C i     :r:R1  . ,:r, 01  r,-      1.c 1)1      r. C11I-
1';  Ri . Ci ri         t.r tl     :,,n            cf .  ,,   q.c cfs      I.   II
';,  4   1 |  tB 1-1   (l~~~~~11     .r fi 1lCf  5  }1&|1  |1t.S1|  l. 01)z|
1t^ t:.    nil-:       .I'll    -,  D.         0. Oi On
1 '-II' !i               ri. I,}t) t'l-  L-  1 .  III nl  t1   rl.  A,ll     'l.r,
II  4-    1    i n  :  .  . 11,    4  t. .  lIX    (  -          , ,e        j 



-85-                                ANNEX I
Table 4: SUGAR IMPORTS BY COUNTRY, 1951-77 (Cont'd)
(in thousands of metric tons)
YEhF      Ml.irMEP.     FiFPICI        IdOPLD,
195=1       19. nn-       q ',A  nr  I lgnri. nrn
1951        p   i. A j 1  7 . I! I  1 '8. 11 l
1953       13 . 0: ':' :,   . I:' 0  1   c3:: 43 . n r
1954       :2 . Or     I 0   r! -  1 . `4:. Of 'O
1955        23 32. 0 0  1 095. L,0l  14491. 00r
5 1 ', r   -3 1~. 00  1 131. ' :'o  141:165. 00
1957        24. nnO   1291. Olfi  I 549Z&. nnr
195'3       28. '':    1 :22 2   . 1 5 5'32 . 0 I-1
1959        23. 00     1259. 00l   14 97. 00nr
I -:a';ro  22. 00n    1401. no:,  17505. 0CI
1 961       19. ofn    151 7. 00C,  201D35. 00
19          20. 0r, jr,  .14j1. con  13943. 00
1               ne,:   17. r,rn  1245e. onr  1 737 . C., n
1 <ge 4   ;>= . l:l o:  1 4 i l l.  C)ll  1 r .  >.|l\
196=5       2:3. 'i   17. .-. ':'0  1 3'5 . C', ft
1966A-      1   ' 0    1564. r!11  1 31.3. 0I0r
1 I96r     21. ( t)    170t. c:0  cs r. n r
II4e:-      ,1.r! 00   1515. COft  1321 '. O n'
1969d       4 T~ . rJ rJ  1 2 4 t . nn1  1 SI 7* f I . r! r
1 n o          f t   15.3;:'. 0':  2 1 20'.4 U';
I'> * 1    P6wb. 01 1  1 6  :'    2) 0 1.El1l   1 4 : 4 .l 
19471       =   0 .l   1 t    '' ~. .  t,: 44 . 0
1972        3.0        17,,-. 0 nl  I 1 21. k r
1973        4?.r 0     1, r-, . 111'1  22 49 9 . ClOfl
19' 7 4     24. r:;    13.3.. l 1-  0  215 5 3 . 00
1 9a  '*                                    Ci1.llXl 1-=*  lll 
1975t       R -. ':'o  cn 1 15. 00r  L fh62t. Uf!
197 6       33. ot: r    11.0       216A0I. u'.'
1977        7    . r!  2 5 1 7 . 0: i 7"3 . 00
Source: International Sugar Organization.



-86                              ANNEX I
Table 5: NET SUGAR EXPORTS BY COUNTRY, 1951-77
(in thousands of metric tons)
YEAP         US i     CAtNFl r        EEC   l,l. FUPOPE     JAPAN OF'EfANIA
1991    -3197.' r:   I46. CO    -I.45.. In,  --.52 on oo  -554. oo     177. (:0 :
1952     :` 7. fin -r99"I  5 ri.ti  -1*14. con')  -7rp. nri 7 -9:3. or:  isa.
1 993-  -:43, iO      I 2 6 .0 (I i  -   14. 0'0 h  -: 1 7. n _ -10%. 0P 6 52.0 r0
1 99.4  -35 0 4. I'l "I  -59Z. r( tt:  -1275. il .11  -" 44. Il (I  -915. OC i  537. Of :
1955    -I::r 4. 00  -61 6. CiCi  -1154.00    44. Cci    -992. 4i4  O  I.i17: :. 51 CCl
1956;   -%7:7A. CiO  -651. 0(1  -1444. 00   -1 'l46. Of:  -1 161 . 00 :l  567. C:O '
1957    -.i'. oI     -62 7. o n  -2369. 00   -427. In n  -1 V35. nr:  r`_. n0
19 54   - 4 -' . Ori'  -:666. ':'i  -199. o Q ,1 ?Ž2.. I- 11  -11*7. 0Il   5 5. i
199     -41: -1. C::l  -69f:'l. nn  -2 I 0n  -QIR. nnV  -1177. ni      51t. n'O(
1916Cc  -4.-:-. 0' )  -613. Ci -l * Il0?. U U - -'LI4. 1 00  -1Ž52. 6l.  P-5 48 .) (I
1 96 1  -:3e:i . 00 r  -681 . C'C'  -1277. 00 r  -741 . 0 0  - 1:3 0t 6. 00  755. 00
1962    -4245. ofn   -744. n0   -1459. r0'  -1 fi4n 0n  -1I376. fir   1 102. onI
196:3   -41r3. no    -704. 00   -21 09. oJn  -1 1*?6. on  -1 30 0. 00Jl  1 0n3.. 00
1964    -:eL29. 0 0  - -691. no  -1 924. )00  -1 1 24. o n  -13.91 . no n  1 6. onl'i
1 9 69  -?65 i . oi n  -:*t Ž o. on  -1 671 . n n  -1V I . oI n  -1 42nr. on  1 06A:3. . ro
1966   -4n74 400     -792. nr   -1:37:3. v.cC  - 1.1IJ4. (ltO  -1572. Cor  1:355. 00n
1967   -435 . 00     -9 1 7. 00l r  -2068. 00  -1 18Ž. 00i  - 1 667. o nrl  1 69P 8. 00 
I 96:3  -4, 54. 00   -:3: :3. 00 n  -1 153. g0  - i 266 .-0 0: O  - I 855. GOn  2 Ž0:36 . 0O
1969   -44:31. 00    -91P8 0. on  -1752. 00  -0rI4 00    -2074. 0l    1:36 7 .0
197r0   -4:.3. 00    -9 :34. 0 n  -1142. 00  -:8. 02. on  -247'?. on  1465. 00
1971    -n,.  0 0    -9?36. nl  -t orne. nn  -1 304. 0.l0i  -rS3t2 . 001  1 577. ril
1972    -4951 .00    - 9.39-. 00 I)  - 37:4. uLi  -1 :348. 00  -2744. j00  22:30 ri
1973   -4: 331 . 00  -,?952 . on  -312. 0 0  -1 993. 00 3  -L2139E6. 00  929. 1 I
1974   -5 1%8. 00 O  -9 05. 00  -1 03 36 . 00  -.1 732. n o  -2 83 _ e. 00   1 1 2. (00
1975    -     n312. 0  -993. 00  -1452. 00  -1 44:R. n00  -2441. 0C   1784. 0
1976    -4159. 00    -:3 . :a00  -09. 00    -1 252. no   -Ž509. Or(   241 8. 0n
1977    -5271 . 0n   -973. nn     966.0n    -1 1l 1.0 n  -2785. n0    2745. 00
YEAP    S.AFRICA        ijf _3 P  E.EUPOPE  A TAR-CPE       I riAF   PHTLIPP.
1951       60). 0 0  -.3?1 6.00    304.00     -:33. 0r0    -11. 00     -4. 00
1952        6.0 0    -2:3 . l-Ci  951. 00     -'7. nfi      10. 0      :2: `:3. 0i
195:3     :35. Cii0  -1*5.::      7 42.0 0I   -40. O0    -14 :. iti   :353. nn O
1954     22)4. . 00  -2:ao. nn   1166. ')')  - t-i-:. nf -nI4. or      C  -b. Ui
1955      2 -39-      - 9 n ni:   694. rO f  -1 AA. 0l rl  -49'4. frl  %:R  "0
1956      184. C':   -157 . O il  242. 1i U  -l:-;2. 00Ij  -18. no     976. ICI
1957      1 R-. r,   -4597. 0i   -3. 0  n 0  -144. n(t     159. O ci  :375. :n
19?5:: -     c50. Cf:  -177. o     3   i . o  -1:359. rf    54 . (t0   98c. -0 n
1959      245. 0) 0  -121. nin)   I 0r  (Io  - 1 n'6. Cl)   1 7 . :.0  1 C5 n. 0:
1 9i ?t l   4 . 0 0 |  -1455. (f       i: 758. Ii9O e:-     1 ?. ii :i  1:  C: n  --
196    I     . . :0  -2646 . fIn  1  I "ti    190I7. O     291741 . Clf  12. Of
1962      51 . :::f  -15:-2-:. 0') 1'  fl'u  -, 4. 00      4 i5. C    1 14,. Cii 
196. 3      3.:- :::l  - -22':.:::::  4?: , rlil  -407. (:0l  51.-. uul  1 fjg,'?. Ot:
19t4      9r -:. Of:  -14 56. l('0  lt:40 lini  -21. nf:   241. Ci:  1117. r,t0
19  5 6 4   1 .0l l  -1    00 1 )     . n 7 6 2. ::  . i l  J1 R . A:ni  11 I I  . ::i :i
1966.;.   5l?. noI  -tfr-i litt   41?. fit)  -Rs. it::l   4t.1 ('1.   1: I:n,. 1ii
l?t~~~~~., :Rit'  .   5lo-I :Rr ,ll5-4r h. r,l n||? t.l I'ln3 .W
1 96      57 .. 00  1    -"   I)-  i t tI 97 . fin  - n i: .  L   ?. ci::   rlr::: A .CI
196::  -4.r,.~F .t:i     -~ i   :79. Ut:   MN Cit      1t9if:      1t::l
I      t-07.i:  - no  ,5         7 t4. rn nli.77  iA      1-49   :v   79 . ::::
197 ?. r:,,         -14 -         : .   n   -1 '9- till 7.0           11 .  7
1971      , -.4.      1 4 liii   -69>4. O n  -11-1:1 t . -il  `4. A:iFt  141 1. Il
1972     1 ?14  I) II  I:: - l l .n i in  I. n 1  - 1tt   4 .l 'i  1  4:. 11 ri  1 2 6 1 . IlOfl
197  -    '  . fit:  -.,:-:' . Olf  -4   R:  t f   -1  1  ,ft  3:' . ft 1C4,  I  l f
197 4     2:26. ItO  -I,3:. (ft  --:R:. it:  -r.d1 . fl:   53.        1636 Cii:
1975      74,-..  0  -- 17::..  0  -   n: Oi  _ - , . 0   1 04:: .  ft-  1t  . 0.
197 t    -:ti?f      t:6:: l .A -r  -422. Iitt  c:: s. ri :I  ?14. (Ir  1514. Of
1 97 17 5. iII: -4gr:Q ri        -276..0       -5114 . Of  276. r     279. 5 5  i



- 87 -                           ANNEX I
Table 5: NET SUGAR EXPORTS BY COUNTRY, 1951-77 (Cont'd)
(in thousands of metric tons)
IPEA   IriNiONE'.   TH I LNitil    TRAIIIAN     Cl. Al IA F FsHP3ENT: ERI L
191 51I     2. fn ri   - 5. on i         n. -lfl   ... lf: n'o              ::
1953:   92.0':'       2. iT4':'  4926 Of'i  -715. ':': -f9      0      260
1955   1 ~~~~~~~C '  11- ::*ftt  ::.0      -1,: V t  fI4. 1:11        :
1956      119 5iT -lI-   0. 7t m_ 3. O        -1, t .n          ti          3.1
1952  14  Ilfi  -4.00     3~~~~~~~~~~:157. *ftf -I   tin  I f    40. 1
0:,  -17. oo   7~~~~~~~~-,:3, ~ . IItij  -]  i  11o   77-,~ no
1959     t:i:t    ~~~~~~~~~~-19. fDT                   -5f1 1  i Itt  Lt, LI
196':'  cii::      ft~~~~~~~~~9 (I0  9146. OftI  -1  it  1  ft,    35 jf
19E.1  ti oo       1~~~~~~~~.0 n 66?4. 0 fi  -  f  ii  IrO)        75
1962   ,-.l t:ifi~~~~C  437tt  610          -1 ti      f      t 0    479'i. tI f
1963      1M  0         50.0       631 Of    -ltl1   ftI iO             4:37z. fIf
1964  ~~tt Oft  -  51.00     :3:16. tttJ  14c9.r Ltt3r:0 CtLiLt
1965           00ri.Ci(  59  00:311.: C0l     -1  46   Ti     45. ":I:   :3 13  fil'
1966  1 OCt  55.00      :3:53.00  -~~~~~~~~~~~~~~~~~1559 ft1  .Of  070
19.3:3:  1~~~~7 ft Ol  ft  0    R 1  0     -=:,.if             iJ      :t    f
1994f                   15. (H:                              52. ft - Ct  Olfif  1-
197:  1  t:tt~~t  52. Oft  426. 0t~~ ~lr:::3. TIft  J~~j (10   11 52. 00
197 E.    Ci~7 00f    145. rftit   541. fttt  - 1 r:I5. (ft   Ul  0         I3:.001-
1 .72     I-1,. ifr .ct:t 4 c4  on  P-.5   ft   ft-i   . I- -   6.(n     6 7   1
73  -307.~~~~~r -i -15  -i (I  520 C 0I   -  I:  ft ft(  5  I f      1: I.C '
I1?7I    -15t.f 00    125:.0(1     541. OFt   -3375  1t 47. Oct         2975l.C 001
1974      -12 . Ofct   54 . ftf    *.I.  t:rj  - 33tt4  C)flf   1r,it. t:f (I3   ff
1975 _    -66 ( 1 . 0i0  663:. Ci0  406. fIftI  -?345. 00r   197 0. ftfti  2173 ft fcif
176     -175 . fift  115.   I0    515 t j    -   i4. fi ft  292. OftC  1252 V. (tO1
1977     -4     0     1674. 0      64.00      -61. 00        95:3, Oft  2436
YEAR F  COLOMBIA         PERUJ    ..AMER.         CUBllA  DtOH-.REP.      M1EX.ItCO
1951       54. 00 C    259. 0i0   -20.3: 00    1472 .C 00        ftc ftC 0. 00-1
1952        1 . (i i)  jtt. Ft riZ9R   . t: ft 9fti  .f ft   j     : ft     9.i: 
1953     -15. ft 0     11. fi ft  -13.=:3. fif  991   ftf   57 ft. fif "I3:. ft fi
1954  - tTt. t:ttj  ~~~~422.:. t)i -1.tt..  ,j6 :tt     32 t:         3
1955    :tTt.~~~~~~c tj  4:-. :3:   "If  -1  59. Eft 4,.1P.4.4 . tft  0I:  .  ftic  f  i"
1?956      5$: 00      42C:3. t:tti  -M C fif  9 c4           I ft ft  1  1  1 . nil
1957      - 20 . fift  49 6. ft :II  59. 00    9 f7 . f'it 07'95  ft It   -E.76 1-
1      -44  . (I:1  41 J i        1 ::            in 1-       -1 Of:  i 7. Of 1-
I :It; ft.   Ci:t   514. Iotfl       Otti   tt:5    00l   il   t3:     462 fr,
196_ p,1   46 on       5 5 2. U1J    14 -1t ft  tz414. fiO   7   t7:t    9:R0
196         6.Ot       46: Ti0           i f'  91:1. 14          0 f C't  :5, Of
1963:   ~~~~~4tit:f4:1.tt        1 4  :tt   t921.:I'l-    6   1  fi     :2.ll:
1964    ~~~~~25 . F,tft  4 ::C tIlt  I It :tf  4176. I  Oft61 .C oft  41.
1965  101.  fttl   i~~~~~~~~~~~~~~~~~~~t  4,4  fitI)  91 R. 00  5.  Cfil  4  1.tlft
1966   ~~~~~114. tlftl  4  lil 1l 0I I      44::5. f:t    57jff         1:
196:3:  ~~~~2 3:3:. fIfi1  4  -:   t'lt  24.I fif  A  3m:.  fftA . ftft  67E.   fifi
1971   161.~~~~~~f fIfi  ,1.f  - lIlt  A  Of: - 1  I  .  f'lf  1   5  .  Ifif  5 l. ft-)
1972      2flJ3-. 00i'  .4:Tft . tll  265.,ti 4'4ll    1:11 11  1.  ii-I   J  I'uf
191:73:   142   . ft ft  .4 J-'17 1 Oft  31. ft ft  C 47'~  . ft .Fill I  106 . 01  9:v  t  I
1974   ~~~~~1429 . ft ft  4 117 . ft1 0'  2Jt . Oft  94 1 . Of'  1 055r: . Oft  495
I97 5     192 ftfi     422 Of       71 if       744 .Of       7.ff       21.:(
¶~~~~~~~~~~~~~~~~: *zg4 ::



- 88 -                           ANNEX I
Table 5: NET SUGAR EXPORTS BY COUNTRY, 1951-77 (Cont'd)
(in thousands of metric tons)
YEAFR    M. RMEP.      RFPICR       l"lOPL P
1951      60n.9. 0':  -123. io     3`227. on
1952      5:3. 2 '0  -34. nn        .88. 00
1953     6i;:3 2.I0O  -262.0n      747.0n
1954      732. 0     -4:37. rOCt   -82.00
191 5 5   721.00     -412.00        49.0n
1956      73:8. 00   -409. r':      93. oin
195?      765.00     - 45 99 Ci ei  23. nni
1958      664.00     -427.00       231.00
1959      255.00     -53.3.00      183.00
1960      :365 .     - r.  -774. n n  157. 0 O
1961      9152. 0n   -616. 0       413. On
1962      919 .:1 0  -520.00       295. 0u
1963     1 07349. 0  -24r,. 0 '    :3:33. 00
1964     1 :3:3:. 0  -41:3. o0     596. 00
196.5    1070.00     -53f_,7. 00   725. 00
1966     1 051 . n05  -6:1n0. n0   23. n00
1967     1 06:3. 00  -639. n0      428. nn
1968     114:3.00    -421. r-l 5  1 245. .-1
1969     1 016. 00     -48. on    -412. 00
1970     1 nir:. 0i0  -39. 00      265. 00:
1971     1 068. 01   -:i 7. 00     312 . 0 0
1972     1157.00 ..  -44.0         573.00
197:3:   1 r, -. 0r. n 0t    , 0   -7,3. 00
1974     1 1 :31. i:   e   5 -5a  0  .:382. u'i
1979     1174. 00    -676. 00l:   -215. on
19476    135:-.':00'  -947. 00i    :3:74 . 0 0
1977     1:31:3.00  -1142.0 i:t    977. 00
Source: Tables 3 and 4.



- 89-                      ANNEX I
Table 6: GDP BY COUTITRY, 1960-77
(in billions of US dollars at 1975 prices and exchange rates)
RFFRR              eF7riFrs        EEC   WJ. EURIFDPE  jAF'FR    Di EriNIR
I  oF. rl   -4 R=, I ' [9.  - c, 9.40 rl   , 5  . 2  1:3;. 4  I 4. rlI  5I . 80
1o~ 4F  q. n  7q 17.7 .R'O          n n0. C?  If.5 1t5E  .  5 2.0
1 rJe. D   ] rl1 ^; . . r,   R -. . I W 1   . v 3 .'  -  .- 11.1 1i  I1 t '. 6 1_1  5  ,  .C
19o     1 04. '' f: '>Jro       '21. ru .l ,i 9, '? 4. :  159.60. 80 
| -4   e  5 1 1 (| +4  @-4 c,  |  t * 4    c ,4, 1 3.5fl ,  & , 0  '11.00  2 L. . 0  0. - 4 n. t-, _8 
I%5  I 173.::0~~~C~  '7?     350.41      :so.I0I_ .'~:            5
1 @4e,e,  l -'4c-4  1 ri  I r,,:..  f r                 _fi  -46 1  F  I 0
1 9-4e.  1231 I' 0   11r.      1029          72.3':,    0n          71.2n
196 F. D  1 R -37'.Xl 10  116.30 . : r 1  P-8. ,-  : '4. 70  .3. rl'- 411  .7C6.
1-4     1.371.       122. ., 0  1 1 :34 .0  3. :30 .r 3R           :31 0
19 7l 0  1 371 01 55 1.0       119 . 50     32 . 20 L   3 7 60. R   :34. E3 0
19711   141 0.0      132.0     12 33 .0     3351.30r   4 0l3. .6   :3 7.9':1
1972    ! 4-4f. r fi ,   14 0. 7 0  1 2-3- 1 . 4  3. 9 i4  439.50    2.20
7  4- nr,  1,5n.n r 11R52. 3 n    F75.° n   48°. - n     '?7. 40
197-4   1 542. 1     14    , 154. 7  13: . 1 U  _-o 18 D  478. 1l    6 .3I
'. C7   1 51 4. 40   15.       1 348, . r I  ::R I9. r0  4 :3:3. 10  3 6: . 50
S'?.76  1t0C>2,::4   1 8,6 . 69  14155. 1   40l.50n    "17.43 I9.04
1377'/  168.R1 . R:3  1  I3. 1  1448.7 0    4 ,7. 1 Il  544.*33    1 01 . 503
.EF4F   .FiFf 1'- P           E E EIIFOPE  H' TI-'-E    IHDI     IhILIF'P.
1 *:4>:,0  19. ' :1  1 ':=. ~i . ri  1 nl 3.70  1 (n  ::'  .  20 n   t .6 - C
1961     6It. 44     133. 10    114. 'L     1'5. 30     5. ,51         14
12        17.°  1    204 . 1 0  1 1. 30     1 .5'. 0I r9 59. 40      7. 34
19; 2   t   :.R,:: ,:'t.1. 5r0  12'-.40  1f.,-w .-.3  on  3. ,:r     7D
| 9*5     2 41  C'^ . .-.,   L  ;. - r  1 ° .  :, _1:1l  1  .  7,  0 ,  20  :. t t
EI  4      I             7-. _ 1    .                                 .14.  n  *   ..
t :                           I .1        1  '-4        0.90       '3.54
1.:2:      4         .- 1.-t .,  ~16It.:-'l   0.70      7:. r-- 30 1n4  07
l14 69 ?  ,- r., 4  -'3. - J 1-: 1-1  _ 177.l  ,D10.:30 .7. 40 f   Ir
I~~~~~ ~~~                         Li- 1'-  '--I-  -   :  '}-  1.1  -r   R1.4011  '
1 97          1      -.4* r.9n   n1 .: ;:n ?     r-. I1A1 11 .2
1  7,J I':-  I1      s1  . ."1.lt.  9       ',   l      R .  1      1° 
17'31                4,-'  '.7n  _01 _20   ?91.7 3'r041
1973      31.501    444. --:rI  2-33.9'!t  ?D8c9 4t-    3S,.30      13.62
1 '4  . 4   '  '-.:-  .4>  I I+  'I-,,,  ,,  6   . c 6  , " 'Pi ! !  2 S   1;~= ,  4 : 
I 97t   .-       :4,  1 -  44,4 ,g;_ ,_ ~1t. Cl 1  9 1-l :  4 O  1   .  r ?
4 '7 f     4          . I: !: '             - ;                     14. ''
,   -  t 4  :  , . § I 4I i I  1-1 4.7'  : I  I  4  .    I t 3
Cl~~~~~~ 57              168



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o>  _'C ELi9  1n'     IC  Ck      i|                   Ci 61 ',  t, VT  l 96 T
I I ZHcl; 'g 1.49 ,Ali  tl I _ l:l ' U1Kf1 I L4 1  IlWtJ II HH I  3Nii '-1Jl  dLA g 
_(saqva agueqoxe pUB saDTad SL61 3e slvTTOP snl 30 SUO;wTTqu)
(p,luoD) LL-096T17'RalNfOD. AA aas:9alel
I XH                      - O06 -



ANNEX I
- 91 -
Table 6: GDP BY COUNTRY, 1960-77 (Cont'd)
(in billions of US dollars at 1975 prices and exchange rates)
1ERPR     r.F   P.       RF P I CFI      I&i0PL1J
1I6 1 3.5            3    63.31      29 4 0.41
1 96 1       14.       -       90      ' 24. 04
j~~~~~~~ Zf. .-.  1) f,; ,f,n)    '3442c. f6 :2
14 964      17f . 3~ :R    5 . MI Cl  * f' 5. ' PS
1'65-       139 .         ,1         4 0 5. '.bU
1 - t2.17        c          -'        42429. 43
4 734. 0
1 '24.31 D,D, t n  1R4 O..?':I l  $4:R4 ,. ':14
t, 4                                  514r.. 1-.,  5%4. 52
1            ?'7. c,       1   4:. (FI  t. ',5. ' 0
19267tB      -1. 3.      141. 19     t 2    .?
192, l7      .c'. 00-l    146. -71   652. 53
Source: 1960-1975: FAD
1976-1977: IBRD and IMF.



-92-                        ANNEX I
Table 7: POPULATION BY COUNTRY, 1960-77
(in millions)
' REAP R:            r INh:riF      EECt-   I. ztiFlePE  JAP A'    OCEiNIA
1 ':.     1? I 0) . ;7.   1:w l    2, 4R.     Q4 7fI      4 .I0      15.77
t1?,1     1 :R _:, di  13.;24 c  c234.75     '45. 58     95. 0       16. 1 0
1962      1S-;F. *-(1  I R. 5:R   37. 07'     '. I  q9i 46  ?',. 18. 44
1963m R   ;l.-:c:R .,  i R . ,4R1:3  23 3  _69. 41  9 7. 3.4  -it.94  16.79
19tR4     1' 1.C' r,   9.         4 41. T'   '%iR .2 '4 37. 90       17.15
1 '% k S  1 '-x4 . :fl1 t4  4 .f i-4  2 44.   '.  14    95.83        7 .51
1'.. I. .    l  74R    2 4 5.t5    'C '4 . '7 7  '-' .9 Co  1 7 . 835
1 96?7    t19. 4      2.3.3      24  lb      I Oki.4    101. 03      18. 20
196':9~,R  &' rA ff!.5  20 I.  t2 243.6?     1111. 037   1 02,. 12   13. 55
191       &           2,1 .b5    25. 1 5     t 1. b f   10 5. 262    19 . 61
197'?  f2 ARi4.' rD t.41 9-5  212.           tn2 4. R 1727.-         I 00  201
1?L,      r i' ,Je;r:   . P  i',:R  E r5  .'15t-. 1 C'I,  05C.  5   19. P,t4
t3f~~ ~~~ ,D   r; 4< `1I . 9c  r_ r4 . R    t ' llR Rt  t 7I . nn  n 2. ::11
193i71}  '11C.26     J.CJ       256E.0 (.1  1 04. 56   108.3 5      20.38
17'4 4    2. I 'AR   C21..51   257. 46     1 flu. 32   1 09^3. 731  l 20.7-,
1947 5   213.??          21 :. ,1            106. 09     1 1121. 15
1976     215.         23.15      c 26C. 11?  1 016. 84  112. 3s      21. 5?
1977       1 7 . 99   ,C         261.26      1 F. .     1 3.t       21. 99
'FEt F  - .HF:i'  UhYp         E.EL'POPE   Fsr 1 --.PE    I tiDI Fi PHILIPP.
1~~~~~ ~~~  CFl  _. -C  f-?4 C._ :,__     t  l  D      S .  D-_  flD  r
1 960      15.2       1 4.. -"33  98.35        O. 82    4 27 .80O    27. 56
19'?.l     1.        21. 9f9 C.6             6 71. 5    4 32. 2      2 c3. 4i0
19627     16-,.3:R5  220.c       99.8.3     632.7 E     44D,8 4      9.2?4
1i-,7,    17.33.    22-'4.14    100.-w50-l  -S44.416    4!59.75      30.16
19'-4      1 7.P 4                                      4-'-   01.23 C-,.65  470.92  31. 0s3
I. ,F,     13-., 4-:'  ._' -: r. 44   1 lui.2r   .  17 ,,-,D  4-2.  _, (I
196    t   1-3.9     &7, -'      _'. 2 b  1 02 f 2.  Ž'9. 3?.S  4  9R5 RR. U 
1967,     , 19? .,4     56       103.2141. "r 4 r .   ,-     31      34. 15
1963 '?;,:R!,.1      2 1 _   37 .96 Z,  1 fF -0. :4  74. 06E  5 1  9  35.
19R'-;,'  ,DP-A. :RR  240 R. 35  104.47      7.-7    C     "il 40    36. 42
1970      2#1. 5,    -42.77      1 05,, 11   7 7', 4'    4   13 3R7 . 60
'7-. 1 c47  _ I, S   ,7 ,1 =, . t, 1-,=  -,, :-4c17  ID  R-C.  4-
t973 2a. =.  -,f. -  7 c:   -7  lu, 1   -.  , t- 07. 1  -:A -' h: '5 4  1 6  41 . 57
-4 . 4    24. Ci l   Žl . .5,4  1i7 i7   l     :D 4. I-  593 ~. 51   42. 93:
1975 2^-4.          2' 5. t i4  103. _4:24             6132 2       4 4.44
I  -,~~~~~~-                                           45. CS4
1          ::4 ,j-                  _- ,-'>, :4.':  4 i!  , Ii 2     --1 2  '4'>--*4.44c_
1 J 7..              D 4: .- ;  1 C.  1 1 fl . t ;.  -,- 4  t, 4.  4 c  47 _   _ ,7'



-93                        ANNEX I
Table 7: POPULATION BY COUNTRY, 1960-77 (Cont'd)
(in millions)
F\1P   ITMrIiDNPF'r.  TH R  7if  TfPI jI1'4  Fc.HTR  fAE>I1.       P-PRA7IL
1960      2; .7        6.39       10. 61    in1.59       20.61       71.54
1 4ft 1   9e,. tgclg  ,   9. 19   1 0.  ,    f0I-,. 4 3  D( .2       7R. tJ2
16        97.4          .2 612. k1           '1 7. 46     I . 22     e5. 75
1t W W         4                  I  1 .E0     7 1      ,Dl . 54    77. 95
1      1 rfl 47    .~.41.5                --.          13          021
19 6      1: I  U'    °. 0.4      12. 44    34..3,5      22.18       3c.54
1q61-    1 13 f',ri   - 1. E. (12. -'       °' 1 2. -  2  c'2 . I29 4843. 93
t;s,.>~~~~~~ ~  ~~~~~~ ll.  5. C.7,  1.-  -,;1plL  ,,.q          ;.
1 F96,:R   1-- .34'4  ?3.61      13. 64    2Rl46        C3.11       839. 932
19669    116. 44      ?4.         14. n7     R0n, 1c,5   23.4?3      92. 5,1
'>r                              1 4'.  '.4 .)  - t.rII. n,:  2  , K   =.f
a4,7ri   1 19. 47     C74        14.0           o7:4 23.75               (
19Y'1    122.1        36 . '?4    14. '       '49. 5     24. 07      '97. 95
1972     125.: 4      3:'.16      15.09'?   4 0l-9. 65   24.3      1I00. 77
191??     12 9. 15    39.43       15. 3:3   419. 0 f,    E4. 72     1 0f3.t67
1 974     1 32.       40l. 74     15. 69?   43017. 2'    25. 0 a    1 Of06 . 66
17 5      1;. r14     42 IP.      16. 01    44 n.-.      25.3'3     1 09. 7 3
t ? 71 F-     t-, 4P          ?   : 1 b6. c"? w' -:t . c4p  C 2'. 7 1  11I c. 3 3
1 97     1 4 3 . 2 8  44.9' '     1 6 . 5t'  46-.5.39    26 E . 0 4  116. 1 1
'%ERFR  1C .LClMlBIA   PEPIJ    .FsMER.        CLiUBi  DOM. FEP.    MEXICO
19F, 0     159 5r. :,.            2:3 . t1    7. 02         16       36. R37
l9r, 1F,.43           l1. 27    29..40       7. 17       ?          3? ?7.5,
14r;°      16.94      1(1-, ',',   1 rJ.2,1  . . 7  .    3.378.84
I 4P,R     17.92      1 c l. R4   7l .0       '. 4,;       4.9       4ff. V1
1I.4       13. 1      11. 1       31.9'        .4         R 59       41. 47
1965 .     1 R,; >    1 1. 44     :>., D ::    .80        3.7        42, -. -.r
1: '6'     19.;, R,-t  t 11., ~:   33.,6t7 1  7. '5       R, 4.8     4 .R6
1967,      1 9.9:     12.1I       3 R4.46     :t0         3' .  I  r  .  454.7
196 4 -,R'Da          1 ,D,4      35.. °, =,. 0?DE  1d1              47'. 19
1 '-4,',D     -C       .'. '-t ::::  4.4      '.41 Ci      .74c1     45q.  3'
1         4.21      43.7..
I1I 1      D2 2.74    1 3-.4      - R-15        T R 4     4. 49      51. 9,9
,D ?t4 1-14   1i   :.4 ''       .;4      5R  0 n
-  - z                               4 . .-  4  1 4 . --~.  .  4   ,  D 1 4.  4  54
I 7, 4                   7' ' i  14.  4 l6    * .3,      45.         63.21
I j 1- t   8   rl~DC  1-- ,  7:                         C, |  ..  -, F -.   74.1 
tz 4 ',       cJ4      b.         4 4. 1 6     4  q .     5  4 7     t.1 D9. 



ANNEX I
- 94 -
Table 7: POPULATION BY COUNTRY,,1960-77 (Cont'd)
(in millions)
'YEAFR   M.RMER.       AFRICA        WOPLri
I I A .1 r  ,2 J3         - P.     29486. 3 0
196:1 22>.34          C223'.' 1 2  0 .-444.33§
I r, 15, ,2F. 51        228.!59   :31 03. 49
1 '-4 °    f 4.10      234.19      3163.78
19.4 4     24.71        ?'A994     32225.26
196        c ,.. 5245.32 4         32_,  .93
S 9C 6fJ   2. 165                  '3 5  :.64  3413.0
1 ~~5::  27. 12  :~~~~F~~1.  247'.310
1 .4-   l    '4 L  f   . f  I2 2 . 13  3542. D3
1j7        23.40       ,   . 1n     6 9- 1 . 58
1@              C J.._ .  ..  4A
1 974      2 q9. 7       4 . 3       4 8 .1
1973          .49      .2. Oa      3' 20. 1
1 r41 4     31I t,     31 D  - t . t39 ' ' -':q2. 99
197 5        1         3 C4 1E 8. 41  '3967. 25
1 9'47 6 e32 . 5         . '?,     4 0145. ,35
%4            356      33'6. 6,4   4124.'7499
Source: 1960, 1965, 1970, 1975, 1980: UN.
Other years: interpolation at constant growth rates.



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F:13 '¢ n._   r~~~~~~t '   E$ .5 '   Ir  I ci1w 2   F'31.   _  -k  I   I:  E I
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9C It EiF tc  ; X n *  t  I  V3 E,     E .  Eltv  ;   1: | c  0 4, 11 Ut,_  I  E. _I.t.X 
c IC it1  r  U . S .  T e FII t.-  . 13 F.1  IO T, T I      I I  T  -:'I I_t
d1 *et.~~~~~~~~~2 t' 't                            :'- F%'..9-^t,'lS*-2I '-:lC?  I Il'T
ScIe2 :|9",k 121t'. I. ./1 e 'I . ^I VF r9  I2  -E  tL
68 ,F:2  _..;g E ' I t .. .  ' 1 F, vl;c  I   X_F I 1. T  I C L:I t-L : I  C_ I  I~ E 
C 6 R-;       I 9' 1 ,1 0  I  E t  1 I ',  88 ...r  I I) 6  I=- t 1Ij +l;   _ I   E 1- ~IE.tt I
I   It, C-_9  | -.*_: 1  9v  83: c .  tw I: I  ::    1   C t.:  : . _ 1  T   1) '2- t . I
SE a ,_it ' T *        6S T I P;    i t-, 169 IN. C' tVC. q - l I-  1  1 1 ',T :T.P 1''TS 
4     9 T      -0c 162  c tt I        9' .... 11; tcc I Ic 1 l ' l-4 Li[ t t-tf
dt * S fr.* I S$ I He d 2  H  P?'cI Tli I t ' '3tte  Pdll t 11 3  1- I'  oI
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2 tt  t  9 f   t  5 * t c J tv   " O  ~i 5 . c   ztx  tr I;;  P- 2n  Li I7  E; 1:01 1-J _   F'  891:t   -1  E _   X 6 D
0S T  'g J, t:w ct¢t 6 E.  I: '>^ Ett e: 6) c:S   'c  Vc-8t  t' ;; (I  ta 8  1! '-   18t I:iI 
sEo 0 zs t  t   1  ' > - ' tS  )9  '   I  t@ -  Cs '1  cr   [  '1,c:'  -  I  ',68 I? eC-z  t'0f 
Cl I  S )17XP   {Dt. eH I ~-C C.  ^=r  Scc 2 IJ  . tX - O  c  J IJC,9- I  '-   I?
TO ' t, 2t   9 1; *  :E'. 0  'l '3 :9 e u .c  .-. '   t. ~  9 I,  I   8: u_  ? -te 
9v *,  0 E,z ' Ci£*2 - ( J ,'TC 9wE  I)1 *,I r  S  I -  _tC '' t';C-  t'-@ I
6t  :fc8 '69 '' II-  ,?£ 11, 9: 1     .- Ln -tE    S''  GtvS 1.s            ?t,el  I
se~~~~~~~~~~~1 oSc:  I  a . r9l  '69 I         I. lU .-  et. .9  9,!r_  Ul t>'I_ 'r  Y.
tlI U3JO     q L wd Lr   ,AdO.13 'il  JE33       H/IJL4eWHfl               d H 3t,,
(Salvl 92URloDxa pue SaoTad SL61 IV SaVTTOP snl UT)
LL-096T ' A.UlMn0 7q VlIaVO 'ada aaD :8 9Tqul,
9 6 -
IX:i1NNV



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I ti.  -_R:  I  I IQ  9  S.tm- |[   n1 1  e. _. TI   .  -   ,..          s
Cc'  'D Icc   .  J- -:                   T I0 -t*1:1sL'w*.1X ^t*_''l~*~  nn'
20 ¢;       68-  I I t1 1 9 .V ,- ,_   P-'tiF,  _   I I  V8 's         C -,,,,_  __   E . I
90T'-.1 i      I 1t 4-t  U-'Sat I'- C,- I'-," It c'z                   e
{9 1_1 1 1 " 1:1 1 U i~~~~~? (I v 11  : I  :-: <11  1rt4 :', II  S' .)t_ft
e ;  :- I- n I   8 e.  , ?r t4t,f.!-:. n i  E,  ITO T r   T  I  T El  I 1 - I *   - 
0   t , 1 U t   1 t . --- -t 'E  ": I  l t LI  tU t-  I  E  . 6  r.  i  I t  ._ I s 
I L ti,£  18£ *'- ' t  1;2.--I eL  _14 '££    ,t '1r" t: ,             Er, I
99; 129     0 CI  9t9 I    e'c 1-i I  10 Sr- IC- l   =t)es0t-  C.R  UC r o it.r  I 9e 
tlr IJ *9  4 8  rO i.[-t,  ; l It , Io  * i  e t.GI;  g *  8  S . SR t-I 13 1;  L rsSIE  IJ '-4 . I
0'- I X: 3W  * d3d ' Wrua H;ill J  '  c 3iFt    lid jd    e I iXt1fj li -IE  dL .
**** cP04b0-0+4 +***#  0   *** #-****00* --+00+00 +      *      r0**e<>+ *++4 +0 4
Q';1j X    te 9  'c 0  t l698  'k,k_ j4  2T '82-U 1  '? U [.l           Z6J _t1.)
9 'p' 9  ,  0 t*, 9 ±      cl='-e'  e-0T o 1CfS c I?t  9> Ze*I c'     v
i9to R08    t-£ 'V E,O I5  p. 8 1?@:3  1) 21 t1  t! _I I :R Er  ip 1 '2 3 E  t _t.: 1 I
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.,-, e      cvr, t IS8 98I C1  t, 'V-  T;?* ItS  cM *.J 80 "CE IO 'fE-  er
9 T  8S-    ti v ElE-9[ f   VV      b.2' -0s 9c''t- Li v      't'       ce
98 921   .   P P-9      13"; 2 2    C I 1, e    tl r.0     Z 39d '9-L' I  u ". 6 e ; 
90 *£89    <--t e;,JSI  Or u SF 0 I',Gi '-'  8 It2 rS-9. .89 1         EBY96
)9*1         '*.>        t   c     {C *l2 '?   O I t        ;?S 19i1   c:3 I?EI
CR  e  t      )*c I 9 cl 9  o 9  t, C,  r. ' 68  I: v4E  0 I   :C 8 9  c"  Q  1n JI9 tQ  I 96
R I S  E' iFJ   l,  cBc   k~   T2   2  t '  E: t '  !r  ,  ,,  *  1-; -  9 9-' z! ' '   - tI
6 I '; Ec: 1;  9 E, I 1i  F:C I  P; 9  c' c"c  9i I It tc  ^  c' Cr  e.i  I  V961nX   Y
9816- oo S    1 122-1   VT  tbCl)E  O 'c  tl(;tl  'T  (I C S I nOI,S    t
9#  I '  '-l F"'  I t,  <: 41 C2 1  9 6 I Z,c'  e-: p '  I c t  c:8 :R   VQ;F  1  1 ''@I*t' '3 I  t? 9 k I
tP*Cct      F * Ic'I C010Tl 9  18   ,- I 9 isc  tP291  'c'2 'SS _;6  SJ 199f 9l
lt; 6S  9. 0r  :t-' 1   F  ,) P) ;:0 -   V       E ?wt  .,  E .. I  C, *  ?:  T I   ) 961
'iI ZL4da    114398H    t HI'surit-!iu *4H^I       I at H I  ' s340al4I  dL4 A
(sau,El 92ueltDxe pue sa-oTad SL61 3e s2VTTOP sfl UT)
(P,lU°D) LL-096T 'ILNIOD AA VlIcaVO 'dd daID :8 9Tqvl
-96-
I X:HINNY



ANNEX I
- 97 -
Table 8: GDP P)R CAPITA BY COUNTbY, 1960-77 (Cont'd)
(in US dollars at 1975 prices and exchange rates)
EfERP    M. FThEP.     RFPIC ICIADPLIJ
1I 6f. 6i  6 f4. 7'     L-"3, 4 1   1 0101. J  t
1961      627 42         P. 6.3 1.C# I026.1I,-3
| '9f , |   )h D7, If           I or 6 ,2s 1O_... 0 8
1 96 63,.. 45       4    i fl5 " 44  1 rl33. I e
1I 9-64    * 0--'. 41   I15.50       1138. 8 0
I 9t. 5    7   15 3.1    3.3. :32   1173. ,5
1 966      7C 55 14      24 . 1     1219. 69
1>67             * 7 . t 5  : 3  3..°  1 243 . 012
1963      Ev14.60      33337       1294. n2 f
:54 fr, 47 f  R  .t        136.I3
19( '3' i    3f-.5C6   3 5C. 9C    13,73 . 
171 3, I  :9-. . 43    3-3 9.4 42   141 1 .53
97- 3  4,3.1  146 0.3 0-
t       ~~47 5       4 1 2:? 1   1J.
1374       447 .4 42. r 4           1.32 .1 2
: '- -   ' - ( 'n 1-}41 f . R' 1  l  D
197?      '?5.-3.57     435.31      1595.77
Source: Tables 6 and--7.



- 98 -                    ANNEX I
Table 9: SUGAR PRODUCTION PER CAPITA BY COUNTRY, 1960-77
(in kilograms)
'rFAP        1Lr    cANAfrl4       EEC   Li. flIRDPF    JPphN    OCEANIA
1960      25.3        8. 449     34 . -'   e-;3. 58      1 . 8 0   86. 67
-'\;  c ,-tr, i- f   e  . '  ~ - c r ., 5   14 iR . 91  89. ;>_
l   2f :6.'~ ;, 4,-2, . 4  27,D, . 45  12.90  2.96 ,3 t 11 7. 36
1 96.3 31             ,-4.%      31.2       Dn.3        3. 87     1 07. 08
1 ::- 4         R   l . 1 4  35.64  , r.. 3Jb R      116. 76
I -74jC2'k c; ,                             21.17        5.7 5    118. 40
1966,f,   ,;8.51       .91       32. '8       . 33      5.66      137. 09
I 'f'      7. 1         7. 5?    34.027. 19            5. 40     131 . 294
1968- D   ,- R, R1-  -  6. 1 9   35.16      26.69       6. 14     15 0) . 93-
1          'r 4  , . r,  tr-. a .3  :38.2? 7  26. 93    6. 19     11 9.92
1970, n   ,- ,R       5. 2:      -f,. 1 U   2D7 .       6 1 ,. 19  130. 02
197 1      rb; ':r   r; c        4 f0. 64    n . 47.    6. 59     1 39. 04
197?'     c7. 4f      6. 06      3 9. U'    29.?7?      5.56      143.'33
1 I7 5- ,D,             .26. D 6  39.7 75   28. 99      5.76      126. 71
197 4      5, 4;      4. 35      35.83      29. 75      5. 71     141.43'
1975^- |  27 . 3      5 . 26     41 . 7D8   31. 57       4. 13    133.50
1976      2E'-49.1  e  , 4       41.44      7R7 4       4.50      157.39
1 q7 7 7  ID pA .     r4. 4c7. 63 R         4 0.0 4      4. 93    156. 95
v*o***.ooe-s'en 44****0+4+<0&-0*******************fl****0+0--+-4>--q.4*******+
'FP     .FFPTrR        Lt--P  F.ElJPDlPE   TR-rPE       INDIR   PhILIPP.
19' 60                  . P3, 64  41.3       1. 91       6.58      50.7 3
1 96c 1   t=,         R . 4      46. 5t      1 .         706       53. 83
19'2      64. 6'      ' *;'3'-4, 53  9.-84 1.. RDn         6-, 6   51 . 64
1:163-:  ,74 . e.e.  ,-ee .6     39 fl4. 0D, 59          5, 4.3    49 . 7?
1   :3-.14.:R l . F,  R t: . ', 4  4Re.,D '>  2,3 ,,6aR. n   ; e O .3  5 5 .7 6 5
l9'?5      55 30     42'. 'ii    4 0. 4IJ    3.          7 , . 24  51. 7-8
1 14      336        41. 54       -: . 2,. .3f6         4 3 . 6f2
3 1 ,   . t   _ ~4 . I)0 I I  4 2  . C  3   - 4 ,,,  4. 66  4 6. .8 .3
196:; 't :- .   :-::R.  4 1 . 25  4 0  .       9' il  - 1  4. 59   45. 71
7          411.'?  ':..'                       .3. 4R..3._
1C        77 .4',                °4,44         7 ,
19 1                  34.27     .3 .5e         H         11        55.84
7 -L -D4              3. 'Jr     40.,0        . n 1     6X . 50    5r2 . 21 
-' -,   -  -  ,      .Cj  I C    4i  5' C     -. -     n . 
*~~~C    5. R,r:~.  r .;.  .  - : .  h: - :' L.   .   .4 Ite !, J. R4.:
t -,74   :R2-.fi. I tfl  :33:., t,  37 .41   4.68c:     7.. 50     61. 79
1   ,.       .- ..       1. 4      .  C2 .72             : .       6r -. i  14
1  -7'R   Z-          Il  70 'R.     D?      4 e4       :,t1 :        02 
197       9' ,  tI1   > 4. 1t    4J. Ub.     4. .34      7.9       55 37



_ 99                       ANNEX I
Table 9: SUGAR PRODUCTION PER CAPITA BY COUNTRY, 1960-77 (Cont'd)
(in kilograms)
'YEfAP  I hNIDNE 'S.  1 HR I _ Cr41  l I JN  Li t FtHS 1  AP ARGENT.  BPRA I L
196(1      7.8         5          81.39        1.69      39.54       46,.39
1961 w     f. t-,lt     . -NI-I  :30.8 :3     t 1. R5    32. 08      45.56
1962-.tJ   r., Fi4     S'                       4s-37. 65            42. 7f4
RI. D9      4       . °1           ?.:RR      45.9f      3:3 .97
19 4                                          2 6. 5,  5. 5  _. 1  L.3  45_1. 39  42 . C?
1'965         7 0 i~§  1 10. 44                 ' ' :, :R  R1  5|4. C2'  55.90
1966e.w.   5.6:::.     !.51       74.35        3.90      46. 0 3     45.24
I nt- 7    5.5|6e      71 12      62. 3f6      4. 16     34.31       48. 92
19~        9           9.62 5     59. ,D  -     _4 _   R, sR4  4 0. 3h 8  4 8 . 7 3
1 99 '         C-                 4 e'        4. r       41. 58      45. 1 1
1              _      13: 0D5     47. 43      4. 9s      41. 1 0     52. e 2
1971D l-'            17. _ .     ,5 1 .3:    4. ,f.     4 1 .       54. 09
197'2      7.         1.F 411     51 .97      3.85       53.42       61. c4
193.21.2'3                        54.08                  6 °$w '4 6t 2  6.27. 691
74            as 44 1:            52. 9l      4. fii     61 .04      64. 98
'74   oll~ ~ ~ -.                    57.4f
1 ,0,z-R ;1 50.t1          o4       3 -U 4     5 4E
174 ',     64:4_. 4 .41           47'_ 4      4          66          64.11
1 J_ w                  ,:       .i1 .  ;.S5,t'3           * IrnC        4 4
197 7       ,                     E: 25:  0..3('C  5.07  6n3. 97     74
cE.iP  l 'LO6 N 1      FIEF'LI  C.AME .        I pA   DOMh. PEP.   ME'I XiCO
19'-J0 -(6            80.76 2f8. t9 . 1 6               351 . 90     41. 74
CI        2 10       .. .        30 . -4:.:            267. 64     '39. 59
I _6       : o          . -~ ;O. 79 -~?. -,     9F D   - I  2 6 7:. 90 r!  39. 42
1963'R    21.00 tl   7 4 ('0    .37 | b     510. 91    231.'91      4:. 3
.964      29.65      63.79       32.57     k0n2:       229.97       46.6t1
1 9           5 ,7.40            .3t.1      7 I. 54     157f . 44    49. 16
19. c9.1 )                       36. t_1c.28           1 07         5 11.20
CI 7                                          n,:  02  ~ .~' 7 f. r0r  2 09.28  52 .7
1c4:,::    t2.1 1-    f.l, 1'4   4:4. 10 n   .44. 1     1E--, .45    49. 50
199r.'     -    -,4* ,4  Z        '.7 A  >      9      210.6        5c'.6 L
I q7 r!   5 3 l            l 52.,   r 4 0.4  ::R -. 55  2.3 . 4 8    47 . 74
i '-1 71                         41.47        '.ri- 4 1   2.         4, .4
72     '?. ( -'S,r2 e.4. 0? 2    40.        5. 8 S;2S5.!.C4 2;52. 92  48. 18
, ,_;  _,  _,  _, =   _ _,  1 1    -  -  --' J4'.79                 -5  .
1974      39.         - .4        40. 12        - R,    24:R.        J i 52
l:-        37.47      62.e1l     415:       .     .:',  c2'3.t6.1   44.52
; _ -  .. 2 -  .-  4 , c,4  . .@  2; !4_'. 17 ?  44.-7
ZC, -      -- .   c    0:. ~l 14      --      44. i3



ANNEX I
- 100 -
Table 9:  SUGAR PRODUCTION PER CAPITA BY COLNTRY, 1960-77 (Cont'd)
(in kilograms)
F AP     MA. MF P.      PF R I CR      LDRL D
196-:'l     56. IT;       5.56        17.44
t I- Ql      ,. n4        7.00        17.9
t19I2        e7.bc       6.96        l 6. 6
19$e.6_     63.23         8.14        1 6 6.6
196.4      i;2. 25        7.55        18.64
1 961:5     64. .9?08     8. 91       19. 78
1966        6 1 . 74      8.80        19. 12
1 9,        64.79 7!'     Q. 4P       1 9. 45
1968?       b3.21         9.73        19.2
1969        59'. '3f'    10 i. 40     19. 64
197f        59. 26       10. 58       .-I.2 0
1971       64. I        11. O3       20. 19
1 9 1P      A   4. 7     10 .          1 |  . n. 4 '
1 *R,   (, S   , ' .   8.  ')     c' 1  L'Z1"
t- 4. I, f..6            1. 9.291.,
1977f.      , b9.1, t    11.00        , I16.
S1r Tl                   I I . es 1n22.26
Source: Tables 1 and 7.



-101-                     ANNEX I
Table 10: SUGAR CONSUMTION PER CAPITA BY COUINTRY, 1960-77
(in kilograms)
'EH<        1.-1  CI-' t i FP     EEC   t. FThIDPE P   -IR7PFRN  DC:EF41iNFi
l4Arb  o S19  1n lf   o_ cs   ,5:2. 2',~~~~~~~~~~~~~~~~~~~~~~~~ IL*.1  4> ,.
1 96f 1   4. .5      4 43 . '41  R7.; ,9. 55            16.35      46..2
I '       4:R, 7 :4   4. 7  -,      3n. l2.b9                      46. 2
1:.6 4,3.t 94^_ *$   45,.-::R   ._4 4  3925  '          1    . 4 0  48.3 R_:
1964      4F. 75     44.6 3:3.66,           31 '0l      1. 03      45. c7
I -F. .   4::  I R   41. ¶3      40 .  :i    ,  -,     i    .41   46.4.4z
t9i-6     4'30.         22 I  4R, 44  4n. 1:   9       ?2.;.       46,.
1-:4 -  4 :  -:,:- f  - -:.: - -  4 0,. :e.@.  5     . D   7,   45.,:
1 '-t :R  5 :  -I .1 2J 4c 4  ,R,,,,,,,- R     -,,*               4 5. t b
19         0. r! .  4  4 !4.3 6--  4 2 . 43:7 R-        cc,
197       51 I .4':_   50 . 17   4c. 5 6    4  c.-23   3'rJ. 76    46.26
1 742     ¶0. ' 9    4:'         4 I . 41 1  41. 19    2'. '39     46 0-
90 2  ' 4  4 7. c4     41.,4     42.iL.     .3ri.:o,-   45.43
1973 -8   5w 5i-i.56  54. 2      43. 5 1    45. 26     .3C'4r      46.3:1
19 7 4 4  4. :: 4. 0             45, 5      4.3          t.4"      4 7 . 19
1 975     4 2.73     46. 6e, 36.93          42.44'3    25. 16      46.13
19 7E     4r,. -'1   4? .6-      41. 42     44.        2 c  3.2    45. 57
1     -9 7  4 .54    47.R        .          4f .2      29.04       44 '-4
'Fi P    F. PHFI If          F .IFijpE F r,4-rPF      I rrIFH  PHIL IPP.
| r-,rl   t,~  $.t.L            Z.'.  t,_-  c, .        = . c' I  1  1  l
4 .4  -t 1,                .-   ~4            9 :        11:1.C1:
1'e,     41 .''     4 Al- :I~  Rll2         R, 12'.4             1,-'.5,
1 I?962   4. 44         14       30 3 .      2.94       6 . 2      1. I.: 
1 63      44.           -.        155        2 .9 .3               1 4. 1 4
l~~~~~R9 ~~~~~~~~~  4  4  32~~~~~~~~~~~~.3 cl     - 9.6I .5
1 '9t-,4  41 `4      .4.:      t3.30         4. 1;. 06           1    .,0
I1963,    4c,."      40.63.1: 4.3                       4.6        17.39°44e 
1 5. r     2. 9   4  4.          ;3.Rl:3      . It.9 1?.21
1@ 7-4 rt,:44       -',°:      :.4.:-.I~   4.1t.r 1,; ''     T~l   'El O,5
t ^: . ?   4 1       4*.45           1         4  ,.:L:b           1 . I4 2 
| 1,- ,4  44,, l!1-  4 -:, 4¶    4| .4       5.4D  - 4     4:-. *  16. x'
c,         '< t' . 7.            n., =--4    4 . -:4     ';4  ,   ,  t  _ 11?. 
; ia, 4   ~~~~~4, ,4l  4   4t .  t, -l-  . . :4  14 ,,t   'i_ ,I     4 :
1975      49. 26     44.32       42. 3:R     5.44       6. 29      19.19
1-  - 7               .  .                      i ,           .      4 1 -.-?
1 '-4. .  4.R, ^,-   4h.. l ,    4,-7, w      ..- 49    6;,5,      c'-l,43R



ANNEX I
- 102 -
Table 10: SUGAR CONSUMPTION PER CAPITA BY COUNTRY, 1960-77 (Cont'd)
(in kilograms)
YrF P   TNTir [ihN Ft.  T HAPT L  ITi  T R I WRN  T A   RRGA  .      BRAZIL
1960        7.71       4.55       10.88        6.38       38.5?       34.65
1@>;1 ; ,$ 4.73 ,  11.3,4  6.36    35. 0A  n   36. o0
- J- -F.  1l ll   _C:   -.      ; .        ' 9. 58     3 7. 04
l ~15 ;-.   24 ',',      2       tZ ?.  . 41;  .R742    35.10
3.95.4   ', 1}4  2:.34;.  t1.6     6.-  ; ;;4 4.9.
i <419651                -    t@,  .bt; 11 . 1.3  7.34   42. 11  ..   5  3
1366 ---. ,, j,_ .5_              15? .3. 1*3            :34. 47     :32. 2 0
1967        6 t. . 24  61.85      1 *3 . 1 4    . 3       39. 53      33.17
1           6,_, D   t.?  9 i,r   } .74  14. _2t D.94     39. 51      39. 45
1 969       6     !      .;9      15. 16       9.19       37. 52      36.79
l4. n       7 .4?      1 0~. 40   16.3     :   2 .91      4(1.0       3l 6.71'
1           7 1. 4. 11    4 I fl4  lt,. -71431             i  q       3.7
197         7.11       10C.94     1 6 .4,3     9.??7      43.92      .33. 77
1972       7.6'$;03 10.81        16.93        9. 79      42.07       40.94
1973        2.52 D,,i':',  t  ,,4  ..9  013   39. 19      38. 76      41.15
1 97 4       .         12. 26     19. 44       S. 94      4 3. 96     42. 91
1975   '43           '.45  1 301  19 ':    4    . -el 0   42.9 0      45.48
1    '. 944   4'          r       18.42         .2?       ?2..43      45. 1 0
1'4   *     4  -; 13.,4           18 . 6       9,.        37.21       43.58
1EA P  CLOFtlIFi       PERLI    E.AER.         CUBA    DOM.REP.      MEXICO 
-.   13- .1l 1  27.0 2 c  ' 23 . 0?  49.44     24.62       3 0. 73
1361t.J   1'3.<.54    25.91       30.47       52.45       24.13       30.76
1t?        214t*.-'   .75  26 , ~  28.93      9i1 -*- - 4   < @ rS r4  .4  .::. 59  3.1 7
1 'Jt-, -  it '-4, 461  27.??      9 .- 5     ;fl0. 7     3:3. 4:3    3269
1 e 4     Efl. 50-  .2. ?-3      : 23.21c    52|.50r     l :l30.?? :34. -:3
IF         I ,r-2  23 .98 t.':. f16        27.46       34.48
1  D        0?      _ 1 .4      6319        29.61      J35. 13
1367       ltr~ .,.       .        I   z  D~; 44  1  t  776  27 74    3 t   . 10
t19-4.2 a-   t~' 1 ,rt 4  >: :R . 1 hn-. 1 ..5~  22R 37 . 65  7:.3. 0  3,2   7 . 4 6
I jC      ~~~~~14     Fi 7I~31                         34.48
1~~fl ~~~4. 72.C-a                          2. 2 7     2,8 .6E2    .39. 60r
t~~~~~~~4 4-r'  ,  , _D        ;'. ~'2 rl                             9 ,t-  l  4:
197 1      -':. 41      I 65t.    .4. .c0.47              30.37       36.9i4
ri.       D6:-4:        19      52.30r      31.42        8.6
14          4w-;:                                I .  41.43
1974 -,    , .,, 4 l 2% ,'1  Th. 4   ' 33. *   "          _ .24  5.  1  40. 3D9
4~~~ 4, _@z.4 eD: ~~~~~~~~~~~~~~-.       r ~ .1-l.           :. Cil@1.° -.12 f 
icc r      , ._   .   c~, 9      -. ., 4:4-:  En .          4        4 4   . .   -3
2 -4  w   * 1 . e 1   *' e .  . ~  34. 14  4 . '4  3'1 . 54  4:3 . 7  1
1 9          . -.8  .   z t . R    -: -:  .    . .:. 3c  zt. Ci  &  I  C ' . 43  : Ž . Lb J  4 2. .3 0)



-103 -                        ANNEX I
Table 10: SUGAR CONSUMPTION PER CAPITA BY COUNTRY, 1960-77 (Cont'd)
(in kilograms)
EFiP'   M. FriIF R.  A4FPICA        IWOPLDi
1 9AF0      183. 16 .55. 3-
t19.1   1   :l -,. 5 --    . =17     1 f7. 42;
1 ;P:w.     1'R. 4U      '>,C 56     1 f . 2'68
t qe.       1':4. 2:32    4. t.i1    1 (. 84
I 9tz.4    ,l.,            64        1 7 . 1 
194.'5      21. 19       9. 93       18. _32
t fS      L. I . 73R    t C0. 445    18. 25
19R7M.    D21.90n       I0. 4z       18. 43
D .,        1 il . 144  1 9. ' 
1969         3.6103                  19.1
I ?1|4   r!  D  0 ,   IJ   1 . 4 1  1* 9. '7
1q?1       24. 4 r2. 19 92 .2D
1  lq l~ ,~  .- cl   125         ,20.2
I          2-: t 3      127 .1. 41
1 1 & _ 5               1 . . i ^    19q. +4 
1        1976  57       1 2 . 28      (I. ,.
1    .:: 3D. 9          13. 11       2 I0. 44
Source: Tables 2 and 7.



- 104 -
ANNEX II: MODEL EQUATIONS
A.                A.   Sugar Consumption Equations 1960-77
Explanation of Symbols
C = Total consumption of sugar in thousands of metric tons
CCAP = Per capita consumption in kilograms
Y = Total GDP in billions of US dollars at 1975 prices and exchange rates
YCAP = Per capita income in thousands of US dollars at 1975 prices and
exchange rates
P = London Daily Price of sugar, in US cents per kilogram, deflated
by the International Price Index (1970=100)
log = Natural logarithm
(0.0) = t-value
* = Equation included in the model
Data Source
Annex I.
Equation Numbering
The letter code indicates whether the equation refers to total
consumption (CT) or to per capita consumption (CC). The number following
this code indicates the country to which the equation refers.



- 105 -
Equations 1960-1977
USA
*CT.1     log Cusa = 9.594193 - 461,539 /yusa _ 0.004194 P
C11.1)             (5.5)
R  - 0.89              DWS = 1.34
CC.1      log CCAPusa     4.4347 - 0.662964 /YCAPu,a - 0.004932 P1
(Z.2)                (6.5)
2
R  - 0.74              DWS = 1.34
Canada
*CT.2     log C     = 7.378159 - 50.1816 /Ycan - 0.00429 P
(7.8)           (2.3)
2
R  = 0.80              DWS = 3.03
CC.2      log CCAP     3 4.107 - 1.09846 /YCAPcan - 0.004833 P
(2.1)               (2.3)
R2 = 0.32              DWS = 2.66
EC
*CT.3     log Ceec = 9.600021 - 369.199 /yeec     0.003471 P
(7.2)            (2.6)
R    0.78              DWS = 1.81
CC.3      log CCAPeec = 3.96709 - 0.978477 /YCApeec - 0.003723 P
(3.7)                (2.7)
2
R   = 0.51             DWS = 1.70
Western Europe n.e.s.
*CT.4     log C    = 9.057228 - 223.96 1Ywe - 0.002189 P
(24.4)           (2.1
R  = 0.98              DWS = 0.84
CC.4      log CCAPWe = 4,41974 - 2.16185 /YCAPwe - 0.002609 P1
(24.5)              (3.0)
R2 = 0.98             DWS = 1.10



- 106 -                              ANNEX II
Japan
CT.5      log CiaP = 3.86277 + 0.700062 log yi P _ 0.007133 P
(25.6)                (4.6)
2
R  = 0.98                 DWS - 1.53
*CC.5     log CCAPi P    3.8219 - 1.66266 /YCAPiaP _ 0.005677 P_1
(15.8)             (2.8)
R  = 0.94                 DWS - 1.04
Oceania
CT.6      log C   = 7.162384 - 29.81641 /yOc
(14.8)
R  = 0.93                 DWS - 1.02
*CC.6     log CCAP°c = 3.833906 - 0.000136 P
(0.2)
R = 0.00                  DWS - 1.60
South Africa (az)
CT.7      log Caz   2.853516 + 1.19165 log Yaz
(16.6)
R  - 0.98                 DWS = 1.48   Period 1968-1975
*CC.7     log CCAPaz = 4.06879 - 0.333008 /YCAPaz
(2.2)
2
R = 0.23                DWS = 0.32
Soviet Union
*CT.8     log CS  = 9.627747 - 137.88672 /Ysu
(9.0)
* = 0.84                 DWS = 2.27
CC.8      log CCAPS1  = 4.045265 - 0.446526 /YCAPs'
(5.7)
R  = 0.67               DWS = 2.33



ANNEX II
- 107-
Eastern Europe
*CTe9      log Cee = 8.82359 - 95.0581 /tee _ 0.001321 P1
(28.5)           (1.7)
2
R  = 0.98             DWS = 1.05
CC.9       log CCAPee = 4.129601 - 0.837929 /YCApee - 0.001635 P
(21.0)               (1.9)
2
R  - 0.97             DWS    1.00
Centrally Planned Asia
CT.10      cPa - - 20896.8 + 4597.05 log YcPa _ 248.555 log P_1
(19.2)               (2.4)
R  = 0.97             DWS = 1.21
*CC.10     CCAP cPa  -1.438875 + 23.06787 YCAPcPa - 0.473137 log P1
(14.1)              (3.3)
R 2  0.94              DWS = 1.45
CC.lOa     CCAP Pa = 12.812561 + 6.198761 log YCAPCPa - 0.347366 log P1
(9.6)                   (1.8)
R  = 0.88             DWS    1.78
India
CT.ll      log C±nd = 3.11816 + 1.148682 log Yind
(7.1)
R  = 0.76             DWS = 1.30
*CC.ll     CCAPi"d  -  2.330566 + 59.6094 YCAP
(2.4)
2 - 0.26            DWS = 1.30
CC.lla     CCAPnd = 22.210937 + 8.232422 log YCAP
(2.4)
R  = 0.26            DWS = 1.30



ANNEX II
- 108-
Philippines
CT.12     log Cp  = 7.536377    11.41992 /Y      0.006439 log P1
(15.1)           (0.2)
2
R   . 0.95              DWS = 1.39
*CC.12    CCAPPh    40.7524 + 18.6327 log YCAPPh    0.47052 log P1
(5.5)               (0.6)
2
R  - 0.71               DWS - 1.18
Indonesia (ri)
CT.13     log C   - + 2.978516 + 1.222717 log Yri
(9. 1)
R* = 0.84              DWS = 1.68
*CC.13    CCAP - - 2.457397 + 52.86963 YCAP'
(7.6)
2
R  - 0.78             DWS = 1.61
CC.13a    CCAP    = 24.620361 + 10.177124 log YCApri
(7.8)
2
R  = 0.79              DWS   1.66
Thailand
th                            t
CT.14     log C    - 2.120514 + 1.53958 log y
(11.8)
2
R  = 0.90              DWS   1.95
*CC.14    CCAP      27.5699 + 14.7879 log YCAP
(10.0)
R  = 0.86            DWS = 1.52
Taiwan
tw                            tw
CT.15     log C   = 3.52308 + 0.812141 log Y     - 0.008965 log P1
(17.2)              (0.2)
2
R  = 0.96             DWS = 1.06
*CC.15    CCAP      19.2572 + 10.4667 log YCAPF
(12.7)
2
R  = 0.91             DWS = 0.96



ANNEX II
- 109 -
Asia
-   lo  as                            as   0117
CT.16     log C  = 4.614883 + 0.737923 log Y     0,131271 log P1
(16.8)             (4.4)
R - 0.95                DWS   1.11
*CC.16    CCAP    6.137268 + 10.68884 YCAas - 1.053116 log P1
(7.2)            (3.6)
R2 = 0.78               DWS = 0.84
as                               as
CC.16a    CCAP   - 15.570892 + 5.528732 log YCAP  - 1.094315 log P1
(8.0)                (3.5)
2 - 0.81                DWS - 1.08
Argentina
CT.17     log Car - 5,150146 + 0.466675 log yar
(7.0)
R 2  0.76               DWS = 2.40
*CC.17    CCAPa - 35.6783 + 8.770142 log YCAPar
(2.2)
R = 0.23            DWS = 2.23
Brazil
CT.18     log C  = 5.510864 + 0.63028 log Ybr
(24.1)
2
R = 0.97            DWS = 2.34
*CC.18    CCAP    43.37137 + 15.89081 log yb
(9.3)
R , 0.84            DWS = 1.92
Colombia
CT.19    log Col    3.420715 + 0.963013 log Y-
(21.5)
2 = 0.98            DWS = 1.48
*CC.19    CApcol = 55.436 + 39.6809 log Yco
(17.0)
2
R = 0.95            DWS =1.10



ANNEX II
Peru                             - 110 -
CT,2Q     log Cperu = 3.847534 + 0.963013 log YPeru
C21,5)
2
R = 0.97                 DWS = 0.97
*CC.20    CCApperu = 40.2428 + 27,4978 log YCAPperu
(8.1)
2
R = 0.80                 DWS = 0.88
South America n.e.s.
CT.21     log C     3.37198 + 1.032318 log Y   - 0.040703 log P_1
(15.4)            (1.6)
R2= 0.95                 DWS = 2.21
*CC.21    CCAP   - 32.47815 + 31.9202'log YCAP   - 1.102844 log P_1
(7.0)                 (1.5)
R2 = 0.78                 DWS = 2.18
Cuba
CT.22     log Ccuba   8.09674 - 10.54248 /Yc    - 0.290359 log P
(3.7)            (3.7)
R= 0.52                   DWS = 0.96
*CC.22    CCAPuba    86.52649 - 11.41132 log P1
(3.3)
R= 0.40                   DWS = 0.70
Dominican Republic
domr                  ~~~~~~domr
CT.23     C     = 74.4792 + 87.83667 log Y     - 6.12671 log P
(11.9)              (1.4)
R2   0.92                DWS   1.60
*CC.23    CCAP     = 41.896 + 12.588 log YcAPdomr _ 1.44812 log P
(3.0)                   (1.0)
R2 = 0.40                DWS = 1.36



ANNEX II
- 111 -
Mexico
CT.24      log Cmex = 4.118164 + 0.848022 log Ymex
(40.0)
2   09
R  -0.99                  DWS = 1.14
*CC.24     CCAmex = 34.851 + 24.9272 log YCAPmx
(15.1)
2
R   =0.94                 DWS - 1.26
Middle Amer-ica n.e.s.
CT.25      log Cma = 3.41614 + 0.979761log yma
(28.2)
R= 0.98                   DWS   0.47
*CC.25     CCAP     27.852 + 21.4182 log YCAP
(12.6)
2
R  ,0.91                  DWS - 0.35
Developing Africa
afr                            afr
CT.26      log C    = 3.9855 + 0.888184 log Y       _ 0.020905 log P1
(38.0)                (1.9)
R  -0.99                  DWS - 1.61
*CC.26     CCAP afr   2.80859 + 24.375 YCApafr - 0.242432 log P
(18.1)                (2.0)
2
R  = 0.96                 DWS = 1.69
CC.26a     CCAPar , 20.272644 + 8.546814 log YCAP        - 0.183731 log P
(16.0)                  (1.4)
R2 = 0.95                 DWS = 1.41



ANNEX II
- 112 -
B. Sugar Production Equations 1955-77
Explanation of Symbols
Q = Production in thousands of metric tons, calendar year basis
QAV = Three-year moving centered average of production
Q5154 = Average of production during the years 1951-54
GR = log (Q/Q 1), approximately equal to the growth rate of production
DC = Q5154/QAV-2
P = Price of sugar on the free world market in 1970 US¢ per kilogram
(deflator: Index of International Prices)
PAV = Three-year centered moving average of prices
PC = Two-year moving average of prices centered on the most recent year
log = Natural logarithm
(0.0) = t-value
Data Source
Annex I.
Equation Numbering
The letter code indicates whether the equation refers to total
production (QT) or to the growth rate of production (QG). The number
following this code indicates the country to which the equation refers.



ANNEX II
- 113 -
Production Equations 1955-1977
USA
usa                           usa
QT.1     Q      -32953.2 + 4420.05 log Q     + 192.219 log PC
(9.5)            (1.5)
2
R - 0.83            DWS = 2.14
*QG.1    GRU   - -0.147738 - 0.24082 GR     + 0.106561 DC"'
(1.0)   -1      (0.9)
+ 0.033184 log PC
(1.3)
R  = 0.15         DWS = 1.84
Canada
QT.2     Q    - +9.024 + 23.6343 log Qcan + ,.2075 PAV3
(0.9)            (1.5)
2
R = 0.14              DWS = 2.09
*QG.2    GRc   =0.838459 - 0.498919 GR     + 0.825936 DCcan
-1
(2.7)            (2.1)
+0.007826 PAV_3
R  = 0.43         DWS = 2.14
EC
QT.3     Q  c   _56426.8 + 7057.02 log Q; + 51.8673 PAV3
(7.2)              (1.3)
+ 403.156 log PC
(1.1)
-R2  0.79         DWS = 2.58
*QG.3    GReec = -0.101920 - 0.444985 GReec + 0.067485 DCeec
-1          ~~~~~t
(2.1)            (0.4)
+ 0.002717 PAV 3 + 0.03093 log PC
(0.6)             (0.7)
2
R= 0.23            DWS = 2.26



ANNEX II
- 114-
Western Europe
we                             we     0.46    A
QT.4      Q   = -14040.0 + 2043.40 log Q1+ 40.4436 PA3
(10.0)                 (2.8)
+ 156.898 log PC
(1.2)
R2 - 0.89               DWS = 2.53
*QG.4     GR   - - 0.139422 - 0341222 GRe     + 0.090588 DC
(1.6)               (0.7)
+ 0.007243 PAV 3 + 0.035616 log PC
(1.2)             (0.7
R  = 0.19              DWS = 2.37
Japan
QT.5      QJaP   -770.211 + 209.934 log Qijap
-1
2            (15.6)
R  = 0.91             DWS = 1.02
*QG.6     GRJa P  -0.119499 - 0.133445 GRJaP + 1.855716 DCJaP
-1
(0.5)              (2.6)
+ 0.001735 PAV_3
(0.2)
2
R    0.35              DWS = 2.33       Period 1961-1977
Oceania
oc                               oc
QT.6      Q c ,    12357.4 + 1876.99 log Q1 + 21.7021 PAV3
(12.5)                 (2.0)
+ 32.3633 log PC
(0.3)
R2= 0.91               DWS = 3.06
*QG.6     GRC = 0.022148 - 0.478035 GROC       + 0.004063 PAV
t-1                  -3
(2.4)               (0.9)
R  = 0.23              DWS = 1.88



ANNEX II
- 115 -
South Africa (az)
az =   79.2az
QT.7      Q      7294.82 + 1193.26 log Q1 + 18,3092 PAV 3
(9.0)                (1.9)
+ 0.5117 log PC
(0.0)
R  = 0.84                 DWS = 2.59
*QG.7     GR az  0.069076 - 0.415393 GRaz + 0.149042 DCaz
-1
(2.0)              (0.9)
+ 0.006149 PAV_3
(0.9)
R  - 0.22                  DWS - 2.30
Soviet Union
QT.8      Q u      37438.1 + 5080.51 log QSu    . 8.8755 PAV
(10.2)               (0.2)
R  0.84                 DWS    1.81
*QG.8     GRt  = - 0.132096 - 0.13314 GR      + 0.328623 DC'u
t                             -1
(0.8)          (2.8)
+ 0.001622 PAV 3
(0.3)
R  0.30               DWS = 2.28
Eastern Europe
ee =     65.                    ee
QT.9      Q       16954.2 + 2485.7 log Q      + 16.308 PAV 3 + 103.5312 log PC
(4.3)                (0.9)            (0.6)
2
R  =0-.-53              DWS = 2.22
ee                             ee
*QG.9     GR   = -0.262131 - 0.243763 CR      + 0.224085 DCee
-l
(1. 1)            (1.1)
0.002585 PAV_3 + 0.032169 log PC
(0.5)              (0.6)
R  = 0.13               DWS = 2.20



ANNEX II
- 116-
Centrally Planned Asia
QT.10      QCPa   -11811.3 + 1752.066 log Qc1 + 14.10312 PAV3
(24.7)       -(1.6)
+ 338.84766 log PC
(4.1)
2
R  3 0.98       DWS - 1.60
*QG.10     GRcpa = -0.039124 - 0.077566 GRcpa + 0.111382 DC Pa
(0.3)    -1      (1.2)
-   +0.034733 log PC   -
(0.8)
R  = 0.08       DWS.= 1.92      -
India
QT.11      Qin   15153.5 + 2178.85 log Q in + 13.6958 PAV
(5.7)                (0.5)
+ 401.859 log PC
(1.5)
R2 = 0.72             DWS    1.44
QG.11      GRi = -0.323435 - 0.021536 GR_i   + 0.463605 DCin
(0.1)    -l      (2.0)
+0.07188 log PC
(0.9)
2
R  = 0.19           DWS - 1.75
Philippines
QT.12      QPh   _ -10698.1 + 1610.72 log Qph + 1.5486 PAV_
-1          ~~~3
(8.0)                 (0.2)
227.195 log PC
(2.4)
R     = 0.88         DWS - 2.22
*QG.12     GRph= 0.185323 - 0.227309 GRPh + 0.076754 DCPh
-1
(1.0)            (0.5)
+0.075066 log PC
(1.4)
R2 = 0.13           DWS = 1.96



- 117 -                      ~~~~~ANNEX II
- 117
Indonesia (ri)
QT.13   Qri                            ri
QT.13      Q   = -1423.6 + 254.617 log Q     + 15.31 PAV3
(1.4)               (2.2)
+ 164.867 log PC
(3.1)
R* - 0.71               DWS - 1.85
ri                            ri
*QG,13     GR   - -1.223001 - 0.432709 GR     + 0.934858 DCr±
-1
(2.3)           (2.8)
+ 0.011247 PAVy3 + 0.192234 log PC
(1.5)                (3.4)
R  = 0.50              DWS = 1.76-
Thailand
QT.14     Q   * -2348.9 + 325.49 log    th + 54.114 PAV
(7.5)              (.5.4)
+ 232.22 log PC
(2.5)
R2 3 0.90       DWS =   0.76
th ~ ~ ~   ~   ~   t
*QG.14     GR     -0.83026 + 44.12DCth + 0.01 PAV      + 0.1 log PC
A priori equation, not the result of estimation.
Taiwan
th                              tw
QT.15      Q   - -1198.56 + 286.3848 log Q     + 7.57013 PAV3
(1.7)             (1.9)
+ 16.6543 log PC
(0.4)
2
R  = 0.33       DWS = 1.68
*QG.15     GR   - -1.068074 - 0.228999 GR t   + 1.236.816 DCtw
-1
+ 0.008538 PAV 3
(2.1)
2
R  = 0.54       DWS = 1.78



ANNEX II
- 118 -
Asia n.e.s.
Qas                             as
QT.16     q   = - 5420.28 + 935.56 log Q      ±1 + 20.0536 PAV 3
(16.9)                (2.8)
2
R  - 0.94                 DWS = 1.35
*QG.16    GR   = - 0.026529 + 0.100471 DCas
(0.9)
+ 0.005823 PAVy3
(1.0)
-2
*R  = 0.08          DWS = 1.81
Argentina
ar                          a
QT.17     Q   =-4249.2 + 700.49 log Qar + 6.7563 PAV
(3.6)                (0.6)
+ 180.627 log PC
(1.9)
2
R  = 0.67                DWS = 2.02
*QG.17    GRar = _ 0.45979 - 0.284982 GRar + 0.279803 DCar
(1.3)              (1.1)
+ 0.127507 log PC
(1.4)
2
R= 0.16                 DWS = 1.91
Brazil
br                              br
QT.18      Q      - 29976.8 + 3978.9 log Q1 + 67.706 PAV 
(11.0)       -1     (2.4)     3
+ 372.03 log PC
(1.4)
2
R  = 0.91       DWS = 1.74
*QG.18     GRbr   -0.021601 - 0.183945 GRbr + 0.039283 DCbr
(0.8)     -l      (0.3)
+ 0.003611 PAV 3 + 0.015481 log PC
(0.6)             (0.3)
R  = 0.06       DWS = 2.02



ANNEX II
- 119 -
Colombia
QT.19      Q     = -2529.93 + 483.92 log Q-1     + 0.81214 PAV3
(23.5)               (0.4)
+ 42.4336 log PC
(2.1)
R= 0.92          DWS = 1.75
*QG.19     GR     - 0.036276 - 0.050004 GR_1    + 0.042723 DCCOl
(0.2)     -1       (0.6)
R     =0.02      DWS = 1.82
Peru
QT.20      QPe      -2892.5 + 538.25 log Qperu + 46.8672 log PC
(5.2)        1       (1.7)
R  = 0.71        DWS = 2.13
*QG.20     GRperu      0.330749 - 0.245469 GRperu + 0.34612 DCperu
(1.2)    .         (1.9)
+ 0.04046 log PC
(1.1)
R= 0.19          DWS = 2.07
South America n.e.s.
sa =     486sa
QT.21      Q        5488.6 + 933.24 log QS1 + 0:72945 PAV3
(17.1)               (0.2)
+ 74.098 log PC
(1.7)
R  =0.95            DWS = 1.67
*QG.21     GRSa = - 0.044789 - 0.328708 GR      + 0.224596 DCsa + 0.006654 log PC
-l
(1.2)             (2.7)            (0.2)
2
R  = 0.28          DWS = 1.75
Cuba
cuba                                cub a
QT.22      Q      = - 8679.44 + 1595.898 log Q       + 44.536 PAV3
(1.3)                  (1.1)
+ 50.726 log PC
(0.1)
2
R  =0.16               DWS = 1.93



- 120 -
*QG.22    GRcuba   -1.079817 - 0,307604 GR      + 0.898572 DCcu
(1.5)            (2.6)
+ 0.005226 PAV   + 0.04349 log PC
(0.7)   -3     (0.6)
2
R  = 0.33      DWS 5 2.18
Dominican Republic
QT.23    Qdomr = _ 3716.4 + 669.062 log Q d1   + 3.5024 PAV_3
(4.0)                (0.5)
+ 32.8965 log PC
(0.4)
R2 = 0.63           DWS = 2.28-
*QG.23   GRdomr     0.173795 - 0.385912 GRdomr + 0.279743 DCdomr
*QG.23                          .-1  + 0.279743 DCdom
(1.9)              (1.0)
+ 0.006572 log PC
(0.1)
R   0.20       DWS - 2.02
Mexico
mex                              mex
QT.24    Q    = _ 10028.37 + 1578.34 log Q 1   + 5,514 PAV 3
(18.2)               (0.8)
+ 67.1211 log PC
(1.0)
R2= 0.95             DWS - 2.43
*QG.24   GRe   = - 0.012989 - 0.370726 GR1e"    0.153603 DC
(1.8)            (1.7)
+ 0.001439 log PC
(0.0)
R = 0.22            DWS   1.95
Middle America n.e.s.
QT.25    Qma   - 8995.7 + 1406.07 log Qma + 12.0193 PAV3
(18.4)        +1      (3.1)    3
+ 82.6406 log PC
(2.3)
R= 0.96                DWS = 3.11



ANNEX II
- 121-
ma                           ma              ma
*QG.25    GR   = _ 0.084517 - 0.608161 GR_1 + 0.046332 DC
(3.4)           (0.7)
+ 0.003871 PAV 3 + 0.032018 log PC
(1.7)            (1.5)
R = 0.44            DWS = 1.77
Developing Africa
QT.26     Qafr  - 13518.8 + 2057.15 log Q afr + 12.9231 PAV
(18.2)               (1.4)
+ 10.1367 log PC
(0.1)
R = 0.95             DWS   2.59
QG.26     GR    - 0.035516 - 0.571513 GRa1 + 0.090831 DC'
(3.2)           (1.2)
2
R = 0.35             DWS = 1.67



ANNEX II
- 122 -
C. Sugar Trade Equations
Explanation of Symbols
X = Gross exports, in thousands of metric tons
M = Gross imports, in thousands of metric tons
XNET = Net exports, equal to total exports less imports, or equal to
zero if imports exceed exports
MNET = Net imports, equal to total imports less exports, or equal to
zero if exports exceed imports
TRNET = Net trade, equal to gross exports less gross imports
TREXC = Excess trade, equal to the difference between gross and net
exports, and (by implication) to the difference between gross
and net imports
Q = Production, in thousands of metric tons
C = Consumption, in thousands of metric tons
SWORLD = World closing stocks, in thousands of metric tons
SH7577 = Average share of a region in world stocks over the period
1975-77
i = Superscript indicating that the variable pertains to the i-th
region
MAXIMUM = "Maximal function of". The value of this function equals the
largest of the values which follow in parentheses
(0.0) = t-value
log = Natural logarithm
NB: The trade equations are a priori equations for forecasting purposes only.



- 123 -                               ANNEX II
Equations applying to all regions
i      i         i
1.   TRNETi = Q   - C  - SH7577   (SWORLD - SWORLD1)
i                  i
2.   XNET   =MAXIMUM~ (TRNET ,O)
3.   MNET  = MAXIMUM (-TRNET ,O)
i       i         i
4.   x  = XNET   + TREXC
i       i         i
5.   M  = MNET   + TREXC
Equations explaining excess trade
NB' For regions not mentioned below excess trade is assumed to be zero.
USA
us
TREXC   = 50.
Canada
can   -12.1
TREXC    =   120.16 + 0.015712 C
(3.0)
2
R  - 0.27              DWS = 0.89
EEC
TREXCec = 1700. - 50 T
T equals zero in 1978 and increases by one in each subsequent year.      The
equation implies that C imports from ACP states (presently close to 1.5
million tons) will very gradually be reduced.
Western Europe
TREXC   = 32.7 + 0.0478 Qwe
(2.4)
R  = 0.19              DWS = 1.50
Japan
TREXCjap = 20



- 124-                                ANNEX II
Oceania
log TREXCOC = -4.75781 + l.46289 log C
(15.5)
2
R    0.91               DWS = 2.05
Soviet Union
TEEXC   = 100
Eastern Europe
TREXCee = 700
Centrally Planned Asia
TREXCCPa = 50
Other Asia
TREXC   = 337.76 + 0.06529 Qas
(2.9)
2
R  = 0.25                 DWS - 1.12
Other South America
TREXCSa = 300
Other Middle America
log TREXC    = 0.33142 + 0.472992 log Cma
(3.2)
2
R  = 0.29             DWS = 1.39
Africa
afr
TREXC    =1300.



*** HD9100.4 .D4 c.2
De Vries, Jos.
The world sugar economy
: an econometric
analysis of long-term



- l                                                                                                                         I