Report of the Global Commodities Forum 2011

Commodities are at the heart of development. They are key export products for a large number of developing countries and have direct impacts on employment, rural poverty, and food and energy security. Recent events such as the food price crises of 2008 and 2010 - 11 have served as potent reminders of the impact of trends in the commodities markets not only on global economic growth, but on the long-term development prospects of low-income commodity-dependent developing countries and the survival of millions of their nationals – the so-called commodities problématique.

Markets allow for the efficient processes of price discovery and risk mitigation. In the last decade, however, these markets have undergone a sea change. Massive inflows of capital have led to a process of financialization whereby the operations of actual physical traders have become dwarfed by those of financial traders. Coinciding with a time of high instability in commodity prices, this process has generated a lively debate on the extent to which commodity price movements are directed by financial speculation rather than supply and demand fundamentals. The food price crises of 2008 and 2010 - 11, in particular, have drawn the world’s attention to this issue.
http://www.unctad.org/en/docs/suc2011d5_en.pdf