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Agricultural Commodity Prices will be Maintained

The European Commission (EC) predicts that for the next eight years the prices of agricultural commodities will remain high.

Monday, January 16, 2012

According to a report by the EC, global food demand, the development of the biofuel sector and the a drop in crop production are contributing factors.

"The EC is basing its projections on forecasts by the European Organization for Economic Cooperation and Development (OECD) and the United Nations Food and Agriculture Organization (FAO) made last June," taking into account the latest global economic survey. "

Grain prices will continue to rise due to market conditions and low reserve levels, as well as low production growth (0.5% last year) and increased demand for biofuels in the European Union", reported Prensalibre.com

Source: prensalibre.com

Key entities

Organisation for Economic Co-Operation and Development Food And Agriculture Organization of the United Nations European Commission

Countries

Central America

Insight

agricultural inputs Agricultural sector commodities prices commodities Commerce Economics Agronomy

Commodity prices fall

September 2008

There are many explanations for this: signs of intervention by the CFTC, expectations (or reality) of recession, massive liquidation of funds to neutral positions; it could be that none, or all of them, are valid.

For now it is best to list the components of commodities: soft, grains, energy and metals.

Agricultural Prices in the Coming Years

January 2011

FAO´s outlook for agricultural development during the decade 2010 - 2019 portends higher prices of products and agricultural commodities.

The average crop prices over the next ten years for commodities is projected to be higher than the levels of the past decade, before the 2007 – 2008 peak, both in real and nominal terms (adjusted for inflation).

Prices of Raw Materials Drop

October 2011

As a result of the the contagious effect of the financial crisis in Europe, along with slow U.S. recovery, commodity prices have reversed their upward trend and started to decline.

The IMF's report last September on expectations about the global economic situation indicated a slow recovery for the more advanced economies.

High Prices of Cotton, Textiles and India

November 2010

In times of low cotton production, the Latin American textile industry protests against restrictions imposed on exports from India.

The price of cotton has risen more than 70% so far this year, as a result of lower production, a situation that profoundly affects the textile industry.

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