Japanese imports fell from 3.34 million tonnes in 1974 to 1.78 million tonnes by 1987. In absolute terms developed country imports fell from 14.229 million tonnes in 1974 to 12.788 million tonnes in 1980 and to 9.577 million tonnes in 1987. At the same time developing country imports grew, triggered by the first oil price shock in 1973 and led by oil exporting sugar importing countries. The consequence of this gradual but inexorable change in the structure of the import market was that by the late 1980s the market was dominated by developing countries with, on average, higher price elasticities. It might be wondered why I place so much importance on the achievement of reasonable price stability by the sugar market.
Sugar is a special agricultural product.
It is highly capital intensive because it requires mills and factories for final processing. The capital intensity means that long-term planning is essential. It is therefore extremely difficult to match production with price conditions and there is an in-built tendency to overproduce, driving prices downwards in surplus years. Therefore the attainment of stability, from 1988, has been a very important and historic development, making forward planning and coordination of supply and demand much easier, and contributing further to stability. This new found stability should not be compromised in any way.