Developing nations raise a mocha toast to commodity inflation

ENJOY another chocolate bar. It could help a Ghanaian farmer. Drink another cup of decaf coffee. Cheer up a Brazilian coffee-bean picker.

While the industrial nations have been worrying about the rise in commodity prices because of its potential for boosting inflation, many third-world nations have been delighted at the trend.

Ronald Duncan, chief of the commodities division at the World Bank, estimates that the average rise in commodity prices so far this year of 15.8 percent against last year's average price will mean an extra $10 billion or so for the developing countries.

The drought in the western United States prompts financial conniptions in Chicago commodity markets, depending on whether it rains or not. Soybeans climbed $1.57 a bushel in June to $8.56, the highest average price since May 1977. The average June corn price hit $2.43 a bushel, up 48 cents from May; wheat was up 51 cents to $3.50 a bushel.

``Food-price inflation can have an impact on overall spending simply because food consumption is not postponable,'' notes Wall Street economist Sam Nakagama. ``People have to eat two or three times a day just to stay alive and keep working ... a steep rise in food prices can depress spending for nonfood items.''

An early impact has been weakness in meat prices as farmers bring their livestock to market rather than trying to feed them in dry pastures or with expensive corn and other feeds. Eventually, as the supply of meat declines, meat prices also should rise along with grain, soybean, corn prices.

But Mr. Nakagama suspects that the inflationary impact of rising food prices may be less than it used to be because of deregulation and the weakening of labor unions. Cost-of-living clauses in collective bargaining agreements are less effective than in the 1970s. Big Labor has trouble demanding large pay increases.

For developing countries, higher commodity prices won't put life on Easy Street. For some countries, though, it should make exports more lucrative and help them service their debts.

For example, copper prices are up this year 35.6 percent from last year. That provides a boost to Chile, Zambia, and Zaire.

Guyana in South America and Jamaica in the Caribbean will benefit from higher aluminum prices. Argentina will welcome higher prices for its grains and soybeans, especially considering its huge debts. Malaysia and Indonesia are stepping up their production of latex rubber gloves, a business stimulated by the AIDs scare. Poverty-stricken Bangladesh is happy about the rise in price of jute from $323 a ton last year to $370 this year. The Philippines and several Caribbean islands are pleased at the jump in the wholesale price of sugar on the free market from an average 8.8 cents last year to 12 cents last week.

The World Bank's commodity price index, constructed to reflect developing country exports, is back up to its level in the first half of 1981.

But cocoa and coffee prices haven't done so well, and these are important to some of the poorest nations in Africa and elsewhere. Cocoa costs $1.76 a kilo this year, compared to $2.07 in 1986. As a result of reform in the government farm policies of Ghana and Nigeria, production has jumped decidedly, pushing down prices. This decline has especially hurt cocoa farmers in neighboring Cameroon and Ivory Coast, nations where the domestic currencies are pegged to the rising French franc.

So have a hot chocolate! Try that mocha dessert!