UNCTAD has researched extensively the recent pronounced shifts in the prices of staple foods and other commodities. The 2011 Trade and Development report devoted a chapter to analyzing the price-distorting effects of large-scale speculative financial flows into commodities futures markets. The findings have indicated that these flows have the tendency to drive commodity prices away from the level warranted by economic fundamentals, undermining market efficiency.
, the principal author of the Report and Director of UNCTAD’s Division on Globalization and Development Strategies, will represent the UNCTAD Secretary-General at an 11 April high-level debate
, to be held at the United Nations General Assembly in New York. The debate under the theme “Addressing excessive price volatility in food and related financial and commodity markets” is convened by the President of the General Assembly
Current research by UNCTAD economists focusing on the impact of “high-frequency” trading in commodities has been widely reported recently in financial and online media. Meanwhile, UNCTAD is contributing alongside the International Monetary Fund and the World Bank, at the invitation of the Group of 20, with a report focusing on the macroeconomic effects of excessive commodity price volatility on economic growth and on the well-being of vulnerable populations.
The resolution calling for the high-level debate at the General Assembly comes at the initiative of Leonel Fernández Reyna, President of the Dominican Republic. In his remarks to the General Assembly in September 2011, and in a special event hosted by the Permanent Mission of the Dominican Republic, President Fernández drew attention to the effects on the poor of sharply rising prices for staple foods and other commodities. He observed that the vast majority of the world’s poor live in developing countries that are dependent on food imports to meet basic needs. Among other effects, he noted that the rapid increase in food prices had caused the number of persons suffering from hunger worldwide to exceed 1 billion.