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International Agreements for Commodity Price Stabilisation: An Assessment

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  • Christopher Gilbert

    (University of Trento)

Abstract

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.

Suggested Citation

  • Christopher Gilbert, 2011. "International Agreements for Commodity Price Stabilisation: An Assessment," OECD Food, Agriculture and Fisheries Papers 53, OECD Publishing.
    • Handle: RePEc:oec:agraaa:53-en
    DOI: 10.1787/5kg0ps7ds0jl-en
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    Cited by:

    1. Chen, Li-Ju & Ye, Chusheng & Hu, Shih-Wen & Wang, Vey & Wen, Jiandong, 2013. "The Effect of a Target Zone on the Stabilization of Agricultural Prices and Farmers' Nominal Income," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(1), pages 1-14, April.
    2. Lee, Haeun & Park, Mi Sun, 2023. "Transformation of the global governance in the cocoa sector with three characteristics: Diversification, flexibilization, and coordination," Forest Policy and Economics, Elsevier, vol. 153(C).
    3. Sarasty, Oscar & Amin, Modhurima & Badruddoza, Syed, 2022. "Impact of the COVID-19 pandemic on agricultural commodity prices," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322240, Agricultural and Applied Economics Association.
    4. Chen, Li-Ju & Hu, Shih-Wen & Wang, Vey & Wen, Jiandong & Ye, Chusheng, 2014. "The effects of purchasing and price subsidy policies for agricultural products under target zones," Economic Modelling, Elsevier, vol. 43(C), pages 439-447.

    More about this item

    Keywords

    food security; grain prices; international commodity agreements; public and private stocks; storage; volatility;
    All these keywords.

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