A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

A

rebound in commodity prices: the return of speculation

11 January 2010



A recent report by the IMF published 30th December 2009, forecasts a continued rebound in commodity prices, a rebound confirmed for fuel and metals, but also - though less noticeably - for agricultural commodities. According to the institution, while metals and fuels were the principal beneficiaries of the rebound in 2009, this year, different sector performances will effectively tend to converge. Price recovery at the early stages of a boost in global industrial production is unprecedented in this type of situation: for instance, prices on the IMF commodity index rose by over 40% in the eight months following the drop in industrial production in February 2009, whereas in previous recessions, this index was only up 5% on average at the early stages of recovery in industrial production.

While some see this as a hopeful sign heralding the end of the recession, the journalist Massimo Prandi of Les Echos (French financial daily newspaper) pointed out that - thorough analysis of factors explaining the rebound may lead to a less optimistic outlook. Indeed, among the reasons put forward, the IMF stress the fact that investors have recovered confidence in risky assets a lot quicker than in past recessions, largely because "state recovery plans have succeeded in reducing the level of uncertainty and systemic risks in the financial sector”.

According to the IMF, one of the main reasons for the rebound is a revival in speculation on commodities markets; this comes as no surprise, because these markets are volatile and therefore attractive to short-term investors. Far from being a positive sign of recovery, instead, this rebound announces a return to the pre-crisis situation, where nothing has changed. And there are fears that rising prices, contrary to the long-term bull cycle they are supposed to initiate, will, according to the IMF, result in increased price volatility, amplified by speculator activity.

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