Primary commodity surplus
Production of certain commodities may be in excess of demand as evidenced by the periodic tendency of world stocks to increase faster than consumption. Over-production has been due in part to the over-optimism of production decisions which, in the case of tree crops, have to be taken several years before the resulting supply becomes available. (The excessive production of coffee in the early 1960s, for example, resulted from the heavy plantings made after the coffee boom in the mid-1950s). Over-optimistic production decisions may also be a consequence of price fluctuations, which have the effect of obscuring the underlying trends of supply and demand and therefore make them liable to be misjudged.
The production of commodities has gone beyond actual need, resulting in increased sales promotion to create a market for the over-abundant supply of goods. Such a market tends to be self-perpetuating rather than extending into areas where markets are unrealized.