World market conditions for Latin America's staple exports

An examination of the way in which the export trade of the Latin American countries has developed in the last two years will show that the increase in the total value of exports in 1963 and 1964 was not due to basic structural changes but to factors of quite another kind, which it is important to point out, namely, the decline in sugar and coffee output, and the large purchases of cereals, and wheat in particular, made by the Soviet Union and other socialist countries. Naturally the high level of economic activity kept up in the United States and Western Europe also contributed to the satisfactory development of the Latin American export sector. In 1965, however, export earnings seem to have expanded more slowly than in the two preceding years, partly because of the drop in the prices of sugar, cocoa and wool and partly because of the Controls that had to be imposed on coffee exports to keep market quotations for this item fairly firm. The reduction in the growth rate of exports in 1965 was accompanied by another downturn in the terms of trade, as a resuit of the decline in international market quotations for some export items and the upswing in import prices.

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