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Unctad’s Global Commodities Forum is here

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The United Nations Conference on Trade and Development (UNCTAD), will hold the second Global Commodities Forum in Geneva on 2011 January 31-February 01.

The rationale for the first Unctad Global Commodities Forum 2010 was described last year as centred on developing countries and their dependence on on commodities for their economic well-being. “As demand for commodities in the long term is going to increase, thus posing major challenges for their sustainable and efficient production, there is a very real need to consider how to make the commodities markets more stable and policies better designed, so that the benefits would be more equitably distributed between commodity producers and consumers.” Unctad’s GCF 2010 said then that it was important that an appropriate economic return could be delivered to commodities producers, many of whom are in developing countries.

Policy actions to consider were said to include, inter alia, the development of policies to ensure that countries producing commodities do not face the so-called ‘resource curse’ and, of equal importance, measures that could be taken to mitigate or reduce the adverse effects of price and commodities market volatility, “which cause so much uncertainty and hardship to many of the most vulnerable people in developing countries”.

Moreover, said the Unctad GCF 2010 rationale statement, “there is a clear need to ensure that commodities markets are more effective in serving the interests of the real economy, and that financial market speculators do not, through excessive influx or unwinding of liquidity in commodity futures markets, disturb the performance of commodity producers, consumers and intermediaries”. (We will have to pay close attention to the proceedings of GCF 2011, and not only the statements or resolutions, to judge how far they have progressed from last year’s positions.)

Unctad said then that markets should serve the interests of these stakeholders whose livelihoods are involved in commodities production, shipment, consumption, rather than being subject to manipulation directed at the single-minded purpose of providing a short-term financial return. “Solutions must be found to ensure that the prevailing terms of trade between countries are balanced and that regulatory interventions are optimized, with a view to protect the most vulnerable stakeholders without providing an impediment to trade.”

Now, Unctad has described GCF2011 as focusing on the instability of mineral and agricultural markets and their interconnectedness, the effectiveness of commodity policies and the sustainability of the production and use of commodities, long-term energy and food security, and the role of innovation and early warning systems. “The second meeting of the GCF, organized by UNCTAD with the support of its partners, including the Governments of China, France and Switzerland, as well as Global Fund for Commodities, is a major multi-stakeholder meeting to discuss and find better solutions to perennial problems of the commodity economy,” stated Unctad. “The GCF will also address such key issues as the performance of commodity supply chains and the state of business practices and innovation.”

From the GCF 2011 programme material – themes of the second meeting of this Forum will include the following plenary and parallel sessions:

Plenary A: The State of energy markets: lower volatility and a new price zone for hydrocarbons (A1), The state of agricultural markets: the drivers of increased volatility (A2) The state of selected metals market: fundamentals, non-fundamental factors and terms of trade (A3) Commodity markets’ volatility and interconnectedness (A4), Overcoming market volatility through better regulation, data and transparency (A5); Commodity policy challenges for oil and gas-exporting countries (A6) Commodity policy challenges for minerals and metal exporting countries (A7) Trade and other policy options for modernizing agriculture in developing countries (A8).

Parallels B: Long-term sustainable supply & demand and technological innovation: hydrocarbons and other energy (B1), Long-term sustainable supply & demand in the energy sector: developing early warning systems (B2), New technologies and commodities: agriculture (B3) Long-term sustainable supply and demand and technological innovation and early warning systems for food security (B4), New technologies and commodities: energy (B5); Forecasting trends and strengthening early warning systems for producers, innovators and other supply chain participants (B6).

Parallels C: Current trends and next frontiers for commodity finance (C1), The emerging regulatory environment and trade finance: new challenges and opportunities for banks and other financiers (C2), Support institutions for commodity finance (C3), Shipping and international trade in commodities (C4) Commodity futures markets: do they obscure underlying market realities, or provide long-term signals and management tools? (C5) Risk management in commodity markets: paper and physical markets and the realities of commodity exporters (C6).