The export of many developing countries depends on a few agricultural commodities, even a simple commodity, which accounts for a large share of export income. This makes the concentration of these countries extremely vulnerable to adverse market or climatic conditions. Drought or falling prices in the international market will quickly deplete their foreign exchange reserves, inhibit their ability to pay, and reduce necessary imports to debt levels.
As many as 43 developing countries rely on more than 20% of the total income of a single commodity for commodity export. Most of these countries are located in sub-Saharan Africa or Latin America and the Caribbean and depend on the export of sugar, coffee, cotton wool or bananas. Most affected by widespread poverty. More than three quarters of these 43 countries are classified as least developed countries, with a per capita GDP of less than $900.
In addition, recent data show that some countries concerned have reduced their dependence on commodities. In 14 countries, the dependence on a single agricultural commodity actually increased between 1986-88 and 97- 1999, and only 7 countries successfully reduced their dependence on a single commodity. In the past 20 years, the real prices of many commodities have been determined by wide fluctuations and overall sharp declines in these countries (see 1 1 page).
The decline and fluctuation of export income have hit income, investment and employment, and many people in these countries have left heavy debts. The International Monetary Fund (IMF) and the World Bank have classified 42 countries as heavily indebted poor countries. There are 37 countries, and more than half of their commodity export earnings depend on these countries. More than half of the countries that produce cocoa and more than a quarter of the countries that produce coffee are classified as heavily indebted poor countries.