Abstract

This paper investigates both the sources of jute supply instability and the potential impact of an internationally managed buffer stock to stabilize market prices. The analysis is carried out utilizing a rather simple dynamic model of the markets for raw jute and jute goods. The model combines econometric estimates of the relevant parameters with a priori information derived from industry studies. It integrates the behavior of jute farmers in the principal jute growing countries with that of jute goods manufacturers and consumers using a series of region-specific demand and supply functions. Expected price variance is an explicit factor in determining jute acreage.

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