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Teaching materials


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Teaching Material on the Economics of Commodities Production and Trade



The first part of the module gives an overview of how commodity production and markets are structured. It provides a definition of commodities and their international classifications, presents different modes of production, i.e. oil extraction, mining and farming, and describes the organization of international commodity markets. The second part analyzes commodity price trends since the 1960s, including price fluctuations and the so-called "secular decline in commodity prices", and introduces future projections for various agricultural commodities, minerals and metals. The third part looks at the developmental aspects of commodity trade - both the positive impact of natural resources on economic growth and poverty reduction, and the negative effects of commodity dependence and related structural constraints facing developing countries. It also discusses the ownership or control of resources, the distribution of resource rents and foreign land acquisition. 


In its first part, the module discusses the various technologies available for production and exploration, describes the global distribution of oil and gas reserves and analyzes the various features of the international oil and gas markets, with particular emphasis on the role played by financial intermediation and on the differences between wet and paper barrels. The second part of the module focuses on the taxonomy of oil and gas companies and the differences between the operations of national enterprises and multinational corporations (MNCs). It presents the circumstances under which it may be convenient to set up a national company and the primary difficulties that such companies may encounter, as well as some possible agreements between governments and MNCs, and suggests the introduction of formal bidding processes to choose the most suitable MNC. The module concludes with policy suggestions on the use of the revenues coming from the oil and gas sector to avoid “Dutch disease” and foster the overall process of development.


The module provides an analysis of the production and international trade of mineral commodities, as well as related policies. It introduces the reader to basic facts about mining and minerals and provides an overview of international trade in minerals and related policies. It also explains how minerals are traded and discusses issues such as price risk management for metals and questions related to the World Trade Organization. The module concludes with the role of the mining and metals sectors in economic development and a comprehensive discussion of international policy related to mining.


This module is designed to familiarize students with financial instruments and methods that can help commodity-dependent developing countries overcome the constraints they face in accessing commodity trade finance, as well as the tools available to manage price risks in commodity exports. The main focus of the module is on agricultural commodities. 

The first chapter explains the financing constraints faced by developing country commodity exporters and introduces the most common instruments of commodity finance, in particular those that provide appropriate solutions for developing countries. It also assesses the impact of the recent financial crisis and the ensuing global regulatory changes on the supply and use of commodity trade finance. The second chapter discusses price volatility and price risk and their impact on commodity exporters. It also presents different policy options that can help cope with price volatility, as well as commodity price risk management tools. The feasibility of using these tools, methods and policy options in commodity-dependent developing countries is also explored.


This training module provides a general introduction to the framework of multilaterally agreed rules for international trade in commodities. It reviews the recent history of agricultural trade negotiations and the institutions created by the Uruguay Round, as well as the Doha Development Round, and bilateral and regional trade agreements. It then provides details of the main policy/negotiation issues in this area, namely tariffs, agricultural subsidies, SPS and TBT measures, the TRIP Agreement (the issue of ownership of seed varieties), NAMA, preferences for developing countries, and specific problems of food importing countries. As illustration, it analyses the examples of three key issues in this area, namely the West African cotton, the EU banana regime and the EU treatment of sugar. The module concludes with suggestions of issues for discussions with students.


This training module focuses on market access and market entry barriers facing developing country commodity exporters. It explains the difference between the two concepts and provides details about the conditions of market access (tariff and non-tariff barriers), as well as the WTO agreements (SPS and TBT) and the work of international standardization bodies, such as Codex Alimentarius, the International Office of Epizootics, the International Plant Protection Convention and the International Standardization Organization, as well as private sector initiatives, namely GLOBALGAP. In then specifies the main market entry requirements - cost competitiveness, conformity with standards and other requirements. It further proposes options for governments and other stakeholders to overcome market access/entry obstacles and, by way of illustration, presents case studies of successful ways of meeting market entry requirements. The module concludes with suggestions of issues for discussions with students.

 SIMULATION EXERCISE (2010) This simulation exercise deals with the regional integration of trade in West Africa. Specifically, in the light of recent negotiations on Economic Partnership Agreements between the EU and ACP countries, this simulation asks participants to negotiate an ECOWAS common external tariff, prior to negotitaions with the EU.


Vi Member Localizations:

• FLACSO University, Argentina (2008)

• University of Mauritius (2008) 

• Cheikh Anta Diop, Senegal (2007, 2010)

• University of Zimbabwe (2015)  

          • University of Burundi (2017)