ABSTRACT
On the other hand, throughout the 1960s the exports of live animals and livestock products maintained their price levels and, except for a few years, they exhibited a moderate increase in physical quantities. The crux of the matter was that the two commodities differed in three vital respects with regard to their marketability. Firstly, the income elasticity of the demand for bananas was lower than that for meat. Secondly, whereas livestock was sold chiefly to the Arab countries situated nearby, bananas had to be sent to Europe in refrigerated ships. In the highly competitive international banana market Somalia had little choice but to take advantage of a privileged position in Italy which she enjoyed for many years. Originally she benefitted from the arrangements made with the Italian Banana Monopoly64 and subsequently from her status as an associate member state of the European Common Market. Somalia's relatively high cost of production and transportation left her with practically no alternative markets, and she had to accept conditions imposed by Italy, which continued to absorb most of the Somali output. Thirdly, the closure of the Suez Canal increased the problems of banana exports. By contrast, sales of livestock to the Arab countries were stimulated by Somalia's comparative advantage in that market. The preference for live animals rather than for dressed meat can be explained as due to the lack of adequate refrigeration facilities and the requirements of the Muslim ritual slaughter, about which the importing countries were very particular .
