Buffer stocks

Buffer Stocks. Commodity stocks managed by countries or international organizations to moderate market price fluctuations. When prices rise above a pre-set ceiling, buffer stocks are sold, lowering market prices.

Buffer stocks (accounting) - Stocks held as a precaution to cope with unforeseen demand.

Buffer Stocks
Commodity stockpiles managed in such a way as to moderate price fluctuations.

See Buffer Stocks; Managed Trade.
PRICE ELASTICITY OF SUPPLY
The percentage change in supply for a given product likely to result if its price changes by 1 percent. See also Price; Price Elasticity of Demand; Supply.

Advantages and Disadvantages of Buffer Stocks
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stock used in agriculture to stabilize the price of commodities. The government purchases excess production for storage and sells that storage stock in years of low production. In general the use of buffer stocks stabilizes commodity market price ...

Some commodity agreements (such as exists for coffee, cocoa, natural rubber, sugar, and tin) center on economic provisions intended to defend a price range for the commodity through the use of buffer stocks or export quotas or both.

See also: Banks, Barriers, International Monetary Fund, Economic development, GATT