Slide 1


	Sources: European Commission - DG Agriculture and Rural Development (Agriview Market prices and Circa)
	World Bank - Pink Sheets
	Updated: 14.10.2010

	Volatility of agricultural market prices is increasing:
	•Since 2005, EU market prices are fluctuating more for the most part of agricultural commodities.
	•However, this variation would be bigger with world prices and in dollars.

	Since last year, the term "farm price crisis", and then "food crisis", has been used interchangeably to describe the dramatic increase, and then the dramatic decline of farm commodity prices. Rarely a day passes without some reference to price developments in commodity markets; clearly not just in agricultural commodities.
	Some days prices will increase, others will see prices decline; yet regardless of the direction, it is the extent of variability in price movements that has been the main concern of farmers across the world.
	Clearly, it is not the presence of price variability as such that is of concern. This has been a permanent feature of agricultural markets, driven by the simple fact that the discontinuous, weather-dependent farm production interacts with the continuous, daily demand for food.
	What has been of concern is the magnitude that farm price variations have taken in recent years, and the fact that sometimes wide price swings seem to be linked more to parallel developments in all commodity markets than to the fundamentals of each individual market. As a result of this development, the signal that farmers receive about market direction becomes unclear, and often distorted, and hampers their capacity to respond.