A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

World agricultural markets in 2015:
“for whom the bell tolls?”

June 1st, 2015


The downward trend in world agricultural prices was confirmed in 2014/2015 in an environment of extreme volatility and uncertainty. Global markets are despondent and the illusion of a price recovery in 2015 is less and less likely amidst gathering risks: geopolitical (tensions in Ukraine, Syria, Iraq...) and climatic (episodes of drought, impending El Nino...). This is further evidence that agricultural markets are exposed to multiple risks whose adverse effects on price stability are exacerbated by the unregulated liberalization of agricultural markets.

The oil counter-shock in 2014 and a good agricultural harvest triggered the end of a phase of “euphoria” in global commodity prices in 2014. This drop in prices “is the death knell for the illusion” which began in the late 2000s with the idea that “the quest for raw materials would push global growth”, stated a Cyclope 2015 report made public on 20th May.

According to estimates by Cyclope, in 2014, wheat prices averaged 10% below 2013 levels, corn by 32% and soybeans by 12%. The overall Cyclope index of world markets was down 7.35% in 2014. In contrast, global meat prices soared, + 8% on average due to drought in the United States and Australia as well as several epidemics in livestock. In Europe however, the price of pork fell. In this environment, China, now 3rd World meat importer, remains the “key” to commodity markets, despite its slowdown in growth in 2014.

Markets will be “eagerly awaiting the slightest hint of climatic or geopolitical risks”, say the report's authors, who predict that in 2015 the price of oil (Brent and WTI) should be, on average, less than 35% that of 2014, and the average price of wheat in 2015 is expected to be 10% lower than in 2014.

If Philippe Chalmin, Cyclope publishing director, believes prices will remain high with a growing need for food, there is no doubt that volatility will remain strong with extreme upward and downward occurrences tending to amplify, particularly under the effect of growing speculation. Trade liberalization, compounded by the increasing financialization of these markets also generates systemic risk increasing the likelihood of a sharp global price reversal.

Let us remember that agricultural demand is inelastic to agricultural supply: a 1-2% variation in global production can cause variations of 50% to 100% in agricultural prices. Therefore, just like the variations endured since 2007, in the coming years, agricultural prices will experience high instability.

Page Header
Paris, 16 December 2018