1887

OECD Food, Agriculture and Fisheries Papers

Selected studies on various food, agriculture and fisheries issues from the OECD Trade and Agriculture Directorate.

NB. No. 1 to No. 58 were released under the previous series title OECD Food, Agriculture and Fisheries Working Papers.

English

International Agreements for Commodity Price Stabilisation

An Assessment

This paper looks at commodity stocks, their role in price determination for storable commodities, and past efforts of international stockholding arrangements with economic provisions in stabilising world prices. Low stocks to use ratios of recent years were one of a number of contributory factors to the grain price spike in 2007-08, the paper finds. However, the experience with past international commodity agreements (ICAs) with price band provisions and stockholding obligations suggests that they had only limited success in reducing the volatility of the prices they set out to stabilise, as well as being prone to many other operational problems. The paper also suggests that as a possible response to apparently inadequate private storage, public sector storage would be costly, ineffective in countering price spikes once stocks are fully exhausted, and would crowd out private storage. Some market-based approaches to countering food price volatility are also examined as alternatives to commodity storage.

English

Keywords: international commodity agreements, storage, food security, volatility, public and private stocks, grain prices
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