Placing the 2006/08 Commodity Price Boom into Perspective

Baffes, John ; Haniotis, Tassos

关键词: AGRICULTURAL COMMODITIES;    AGRICULTURAL COMMODITY;    AGRICULTURAL PRICE;    AGRICULTURAL PRICES;    APPROACH;   

DOI  :  10.1596/1813-9450-5371
RP-ID  :  WPS5371

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The 2006-08 commodity price boom was oneof the longest and broadest of the post-World War II period.Apart from strong and sustained economic growth, the recentboom was fueled by numerous factors, including low pastinvestment in extractive commodities, weak dollar, fiscalexpansion, and lax monetary policy in many countries, andinvestment fund activity. At the same time, the combinationof adverse weather conditions, the diversion of some foodcommodities to the production of biofuels, and governmentpolicies (including export bans and prohibitive taxes)brought global stocks of many food commodities down tolevels not seen since the early 1970s. This in turnaccelerated the price increases that eventually led to the2008 rally. The weakening and/or reversal of these factorscoupled with the financial crisis that erupted in September2008 and the subsequent global economic downturn, inducedsharp price declines across most commodity sectors. Yet, themain price indices are still twice as high compared to their2000 real levels, begging once more the question about thereal factors affecting them. This paper concludes that astronger link between energy and non-energy commodity pricesis likely to be the dominant influence on developments incommodity, and especially food, markets. Demand by emergingeconomies is unlikely to put additional pressure on theprices of food commodities. The paper also argues that theeffect of biofuels on food prices has not been as large asoriginally thought, but that the use of commodities byfinancial investors (the so-called "financialization ofcommodities") may have been partly responsible for the2007/08 spike. Finally, econometric analysis of thelong-term evolution of commodity prices supports the thesisthat price variability overwhelms price trends.