Commodity Income Management: Selected Southeast Asian Economies

The document examines the economic impact of commodity price volatility in Vietnam and Malaysia, analyzing the failures of stockpiling and protectionism while highlighting the success of vertical diversification and biofuel transition schemes. It recommends global information-sharing, technological upgrades, and small-farmer empowerment to reduce commodity dependence.

• Vietnam's coffee industry experienced severe revenue declines between 1999 and 2002, with returns dropping from US$601 million to a low of US$300 million in 2002.
• The 1999–2002 coffee price slump caused significant social unrest in Vietnam's Central Highlands, particularly among ethnic minorities in Dak Lak province where coffee accounts for over 95 per cent of local incomes.
• Vietnam's attempt to stabilize coffee prices through a 90,000-tonne Robusta bean stockpile failed and resulted in US$15.45 million in losses because the country lacked a world monopoly on the commodity.
• Malaysia has successfully reduced its dependence on rubber by diversifying into palm oil and further pursuing vertical diversification into downstream processing such as milling, refining, and kernel crushing via the Federal Land Development Authority (FELDA).
• Malaysia utilizes a transition scheme where a levy on palm oil during high-price periods funds subsidies for using palm oil in electricity generation during price drops, which helps stabilize prices and encourages R&D in biofuels.
• The Philippines' use of quantitative restrictions and high protection tariffs for rice (increasing from 16 per cent in the 1980s to 41 per cent in the 1990s) failed to stabilize prices and turned the country into a net rice importer.

APA

Lim, H., & Wei, L. T. (2007). Commodity Income Management: Selected Southeast Asian Economies. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/trade_price_case_southeastasia.pdf

Chicago

Lim, Hank, and Lim Tai Wei. Commodity Income Management: Selected Southeast Asian Economies. International Institute for Sustainable Development, 2007. https://www.iisd.org/system/files/publications/trade_price_case_southeastasia.pdf.

Wikipedia

{{cite report |last1=Lim |first1=Hank |last2=Wei |first2=Lim Tai |title=Commodity Income Management: Selected Southeast Asian Economies |publisher=International Institute for Sustainable Development |date=May 2007 |url=https://www.iisd.org/system/files/publications/trade_price_case_southeastasia.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{lim2007commodity, author = {Lim, Hank and Wei, Lim Tai}, title = {{Commodity Income Management: Selected Southeast Asian Economies}}, institution = {International Institute for Sustainable Development}, year = {2007}, month = may, url = {https://www.iisd.org/system/files/publications/trade_price_case_southeastasia.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }