Potential commodity agreements in the elemental sulfur industry

Barker, J. M.

Organization: Society for Mining, Metallurgy & Exploration

Pages: 6

Publication Date: Jan 1, 1987

Abstract

Formation of commodity agreements depends mainly on the economic instability and associated mitigation measures inherent in the economic conflict between more developed and less developed nations. Five types of possible agreements exist: futures market, buffer stock, restrictive agreement, multilateral contract, and compensatory finance. Lack of market separation between sulfur consumers and producers coupled with large world production and highly concentrated export production in theory suggest a restrictive agreement as most likely. In practice, stockpiling of sulfur, an informal buffer stock, as done in Canada and perhaps the Middle East, has been the main sulfur price-supporting mechanism in the past two decades. No commodity agreements involving sulfur now exist except for multilateral contracts. Sulfur agreements apparently have existed rarely, if at all, in the past. Law (1975) refers to sulfur as one of a group of commodities where "there have been additional control efforts of various types." Clearly, sulfur was a candidate, at least conceptually in the past, for some form of commodity agreement. The following discussion centers on the world sulfur market from 1976 to 1985 in this context.

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