Good news! Commodity prices are rising. Back in the 1970s, when inflation was severe, such news would have prompted considerable wringing of hands. Today it is of some solace.
That's because rising prices for food; for metals; for cotton, jute, and other agricultural raw materials; and for tropical beverages, such as coffee and tea, reflect world economic recovery.
Further, notes Ram Bhagavatula, an economist with Citibank, it ''means some relief is in sight for developing countries that are heavily in debt - and that are heavy producers of commodities.''
Non-oil developing countries' external debt will reach nearly $665 billion this year. The problems of such major debtor nations as Brazil, Mexico, and Argentina have been cause for considerable alarm.
What's happened is that from January to July an index of 30 primary commodities of interest to the developing countries rose 11 percent. That index includes such items as coffee, copper, cotton, rubber, jute, sisal, sugar, fats and oils, soybeans, rice, and so on.
These higher prices will boost to some degree inflation levels in the United States and other industrial countries. But with consumer prices rising only modestly at present, the shift is not causing any alarm.
For countries exporting such commodities, the revival of prices is highly welcome. Between 1980 and 1982, that same index dropped 25 percent, which, when combined with world recession, wreaked financial havoc on the developing countries. Per capita output in what the International Monetary Fund (IMF) terms the non-oil developing countries (though this actually includes a few non-OPEC oil producers like Mexico) remained flat or declining from 1980 to 1983. And since some of their production was going to pay for costly oil or other imports, per capita expenditures were even weaker.
In other words, in the world's already poor countries, the average standard of living has been falling for some three years.
Now the situation is starting to reverse itself. There is a strong recovery in the US and a weaker recovery in some other industrial nations. The demand for commodities is rising.
As a result, the IMF expects about a 1 percent improvement in the terms of trade of the non-OPEC developing countries this year and again next year. Terms of trade measures the price of exports compared to imports. The improvement is not so great as the 11 percent rise in commodity prices because developing countries are also paying more for imports, and price rises for their manufacturing exports are not so great. Further, for countries exporting oil, prices have dropped.
This shift in the terms of trade alone, the IMF figures, could add $3.25 billion a year to the trade balance of the developing countries. In addition, there would be growth in volume of exports for these nations as recovery proceeds, improving their balance of trade by perhaps $8 billion this year. Total exports of the 117 non-oil developing countries amounted to $330 billion last year.
Mr. Bhagavatula of Citibank is much more optimistic about recovery in the industrial nations than the IMF. Thus, looking at a somewhat narrower gauge of basic commodities, he's predicting a further 9-10 percent rise in commodity prices by mid-1984.
''Market conditions suggest that, over the next year, the average increase will favor metals and other non-food raw materials,'' he says. ''It looks as if agricultural commodities, on the whole, will stay fairly flat.''
He notes that the earlier decline in commodity prices cut in 1981 an estimated $20 billion from the $120 billion the non-OPEC developing countries had earned from primary-commodity exports in 1979-80. They lost another $15 billion in 1982.
With commodity prices up, he reckons these nations will regain that $35 billion of exports over the next two years. That, he says, ''will help ease the immediate payments bind that now hobbles many developing nations.''
The IMF calculates that the non-OPEC developing countries this year will pay some $93.2 billion in interest and amortization on debts of some $664.3 billion. Reflecting lower interest rates and debt rescheduling, this is considerably less than the $107.1 billion they paid on $612 billion of debts last year.
The current account balance of these non-OPEC nations has dropped from $107.7 billion in 1981 to $86.8 billion in 1982 and, according to an IMF projection, $ 67.8 billion this year.
This decline indicates the economic austerity programs many developing countries adapted to slash their imports. As a result, the total dollar value of their imports, which had been rising an average 30 percent a year in 1979-80, grew less than 6 percent in 1981. And they fell by some 10 percent last year.
Since these non-OPEC countries will receive about $25 billion in foreign aid or other non-debt-creating money flows this year, there will remain a gap of about $40 billion that must be financed somehow.
Much will depend on the direction of real interest rates - that is, nominal interest rates minus inflation. Real rates are now about 6 percent, far above the 2 percent that might be considered normal in history. Even a 2 percent decline in rates would save these nations $7 billion on their $353 billion in debts to commercial banks and other private lenders and nearly as much on their debts to governments and international agencies.
All these numbers indicate that the debt problem is less dangerous than a year ago, and according to Mr. Bhagavatula, the developing countries should be in ''a better situation'' by the end of 1984.