IMF Reports Decline in Prices for Raw Materials

The International Monetary Fund says world prices paid for raw materials dropped considerably in the second half of 1984 and were still falling in December, which translates into bad news for impoverished exporting countries.

The drop amounted to a sharp 7% in the summer quarter and another 3.5% in the fall quarter, of which nearly half came in December.

Industrial countries could buy their raw materials more cheaply--especially the United States, since the drop was greater in terms of dollars than in other countries’ currencies. That means tougher times for poor nations, most of which depend on sales of metals and farm products for their income.

In terms of dollars, raw material prices last year were 18% below the record year of 1980.

The current issue of the twice-monthly IMF Survey, dated Monday, also finds the richer countries doing well on industrial production. For the first nine months of 1984, the rise for 19 major industrial countries appeared to be 5%--though not all the figures were in. All were doing better than in 1980 except West Germany, France, Australia and Switzerland.

Japan turned in the best record, a 7.3% increase for the nine months. The United States followed with 6.6%.

On raw materials, the fund keeps track of 30 separate commodities--making an exception for oil, information on which is kept separately.

Sugar, cocoa, coffee and tea prices were all down, as were metals. The sharpest drop was in sugar, 18.3% in December alone. The major exceptions to the drop in December were beef, wool and nickel.

Other metals recorded a large drop, and the price level for 1984 was 3.2% below the recession year 1982. The average price of copper, one of the most important in world trade, was the lowest since 1978.