Low global demand for commodities has slowed growth in many developing countries. Breaking the chains of commodity dependence is the theme of this year's Global Commodities Forum (15-16 July 2016, Nairobi, Kenya).
Commodities may be losing their shine. Strong demand for these raw materials, from China in particular, had fueled high prices and rapid growth in developing countries that depend heavily on commodities. But after a decade of growth, demand has slowed and commodity prices have fallen, hitting these countries dramatically, and highlighting the dangers of dependence on a narrow economic sector.
With this in mind, the 2016 Global Commodities Forum will take place in Nairobi, Kenya, from 15 to 16 July, with a theme of "Breaking the chains of commodity dependence".
"Today, 65% of developing countries are commodity-dependent, a proportion unchanged in over 20 years," says Joakim Reiter, UNCTAD's Deputy Secretary-General "It is time to break this deadlock -- economic diversification is fundamental to development," Mr. Reiter adds.
Between 2004 and 2011, the 96 developing countries classified by UNCTAD as commodity-dependent enjoyed an average annual growth rate of 5%.
But by October 2015, UNCTAD’s non-oil commodities price index had fallen 39% from a peak of 330 (current dollar index) in February 2011. Average growth for commodity-dependent developing countries had slipped to about 1% from 2013 to 2014.
Ending commodity dependence, however, is not easy. Countries must add value to what they produce, to move up the ladder of global value chains. And this requires infrastructure, energy and technology, which they often lack.
This year's Global Commodities Forum brings together over 500 representatives from government, development agencies, non-governmental organizations, and private companies to discuss the ways in which countries can build local industrial capabilities and develop new export markets.