Lecture№2
«System of the prices of the world
market»
Short contents of the occupation:
1.Multiplicity of the prices of the world market
2.Main types of the world prices
3.The determination of the prices. Price
discounts.
Key notions
of the lesson:
Multiplicity of the prices, export price, import
price, the market of the seller , the market of
the buyer, world risks, the price of the "free"
market, the price of the "locked" market, base
price, reference price, contract price, stock
quotings, auction, sale, transfer prices,
preferential of the price, the price FAS, CIF,
CAF, price discounts, bonus discounts, simple
discounts, dealer and broker discounts.
Multiplicity of the prices on the world
market
• Multiplicity of the prices on the world market
characterizes such condition of the market,
when on the goods alike quality, delivered on
equal terms (chartering basis, the form of the
payment, period and volume procurement), in
same centre of the world trade, operating
different on level officially published price.
• The Prices can depend from conditions of the
commerce transaction, nature of the market
and the sources of the price information.
(Множественность цен на мировом рынке характеризует такое состояние рынка, когда на
товар одинакового качества, поставляемый на одинаковых условиях (фрахтовая база,
форма оплаты, срок и объем поставки ) в одном и том же центре международной
торговли, действуют различные по уровню официально публикуемые цены. Цены могут
зависеть от условий коммерческой сделки, характера рынка и источников ценовой
информации)
Multiplicity of the prices
• Multiplicity of the prices in world trade is
conditioned of following factors:
• Policy monopoly ,that installing the system of
the prices, differentiated on the market and
category of the buyers;
• Government regulations, interference of the
world organization, region organization and
other organization in world pricing.
State interference in world pricing is
realized:
• by means of legislative,
• administrative,
• budgetary-financial action
And presents itself special row of the
protectionism: duties, taxes, tariffs, quotas,
subsidies, orders for government, purchase,
credits, dumping, financial help
In depending from conditions of the
concrete market of goods the world prices
are divided on:
 export - a price on goods and services of the
main countries-exporter in freely converted to
currency. This can be a price on raw material, to
exported from different countries, which are a
main supplier, or the price on group goods (the
machines and equipment), delivered from
different country)
 import - a price on goods and services of the
main countries-importer in freely converted to
currency.
On each concrete world market exists
the market world price
• If on the market deficit (the demand exceeds
the offer)-its the seller market;
• if on the market offer exceeds the demand, its
name the market of the buyer (last exposes its
price).
The main risks in international
operation:
On international market distribution of the risk between
seller and buyer is realized on base of the international
trade conditions, installed by International chamber of
commerce ("Inсo-terms"). The conditions of "Inсoterms" are connected with world prices.
• The main risks in international operation:
• " risk to realization;
• " risk of the defaults on a payment;
• " transport;
• " exchange and rate;
• " Insurance, economic and political;
• " risk of the delivery of quality.
The prices of the "free" market
• The prices of the "free" market
depend from competition on world
market and objective form under
influence of the supply and demand.
It is the prices of the stock quotings,
auctions and sales.
Prices of the "locked" market
• To the prices of the "locked" market
pertain transfer prices, the price of
the regional economic groups and
the price of the specially preferential
of the deals and agreements.
The base price
The world market is presented by different
prices. As starting point for undertaking
negotiations about the price, contractors of
the trade transaction using the base prices.
The base price - a price on goods or services,
published in different reference book and
price-list; its base are reference and price-list
prices.
Information on world prices
Information on world prices is published:
• " in national industrial statistical
publishing;
• " in statistical bulletin UNO;
• " in special publishing, in which the most
detailed information.
The main type world prices:
In depending on terms of contract on delivery of goods world
prices are in the following main type:
• 1. The export prices FAS or FOB. - a company-exporter will sell
the goods to importer, including in the price transport costs
on delivery or to board ship, or aboard ship and costs on
loading (FOR). The price F.O.B. or FOR in analogy means
loading in railway or car transport.
• 2. The Price CIF - includes all expenses on freight before the
destination, but expenses at ruins or damages goods move to
buyer, when goods will cross handrail in port of the purpose.
She is also export price.
• 3. The Import price C.I.F. - includes the export price F.O.B., the
price CIF, as well as production expenses on insurance cargo
before border of the countries-exporter or importer. The
seller carries all costs on delivery of goods in port of
shipment, on chartering ship, on payment of the taxes, duties,
collection and on insurance goods.
Types of the price discount
•
•
•
•
•
On world fair, on the stocks, auction exists beside
40 types different price discount. Amongst them
the most wide-spread:
bonus discounts;
dealer and broker discounts;
for payment of goods by cash, or discounts
"Skonto";
special discounts;
locked discounts.