Cereal markets in 2008 endured an exceptionally turbulent year. Prices climbed to historically high levels in nominal terms and then fell sharply. Wheat prices soared to their peak in March, rice peaked in May while the run up in maize prices continued through June 2008. The high cereal prices encouraged farmers to increase plantings and this, together with favourable weather conditions in many important growing regions, boosted world cereal production to a new record in 2008. But the increase in crop production was not the only reason for the decline in international prices. Driven by financial crisis in the United States, and a spreading economic slowdown, crude oil prices tumbled after reaching a peak in July. The decline in energy prices contributed to a slower production growth of biofuels than anticipated earlier which, in turn, reduced feedstock demand below previous expectations, particularly of maize for the production of ethanol in the United States. Lower crude oil prices had a substantial impact on the price of maize (and wheat) which ethanol producers have been willing to pay for feedstock. At the same time, the US dollar began to rebound against major currencies and this development also put further downward pressure on prices, particularly on export prices of wheat and major coarse grains. By the end of 2008, the sum of these macroeconomic factors became the dominant feature, shaping price movements of nearly all commodities, cereals included. The severe world economy slowdown and shrinking global liquidity forced investors and speculators to flee the commodities markets, a possible further downward pressure on prices especially in wheat and maize markets. On the other hand, rice prices have continued to be influenced by government policies in major exporting countries.