CULTIVAR 1 - Volatilidade dos Mercados Agrícolas

22 lower. The higher US dollar came to put further pressure on the dollar-denominated commodity prices, to add further concerns for producers, and to bring relief for consumers. More recently, signs of a modest economic acceleration in the developed world are once more sending those analysing market prospects back to the drawing board! Yet one of the few promising spots of stability in an otherwise volatile world economy is agri- cultural trade, which has seen steady increases in recent years. And since the outlook of EU agri- culture depends heavily on worldmarket prospects, a snapshot of existing trade patterns is useful as a background. Graph 2 shows the current average agricultural trade position of the four major world players for 2011-13, in US dollar terms. The US and the EU are roughly at equal levels when it comes to their export levels (close to 150 billion dollars annually), with the US enjoying a better food trade balance since its imports amount to 105 billion dollars against 134 billion dollars for the EU. It is interesting to note that, while US exports and imports are increasing at a similar pace since 2000, in the EU exports grew faster than imports. This has turned the EU into a net exporter of agri-fo- od that stands out distinct in terms of the diversity of its trade flows in both directions; and this despite a rather unfavourable exchange rate until recently. China has increasingly been felt in world agricultural markets, with imports now exceeding 100 billion dollars, while exports approaching only half of this level. Brazil on the other hand has a clear trade surplus, with its exports outpacing its imports almost 8 times. 2. Drivers of market uncertainties and their link to food security challenges The manner by which trade flows will develop in the future crucially depends on changes in supply and demand trends. A look at the drivers that pull agricultural markets in one or the other direction is therefore pertinent. Looking solely at the evolution of agricultural prices, one would identify a clear reversal in the long term downward trend in agricultural prices occurring after 2000. This, when seen in isolation from other price developments, would tend to support a clear policy orientation that more favou- rable market price signals should lead farmers to production decisions that would appropriately respond to market challenges, and in the process correct any short-termmarket failures. (In fact, such conclusion drove, in the early stages of CAP reform debate, the position of those who con- tested the need and logic of direct income support through the CAP.) Yet observing agricultural price movements together with movements of prices in the mar- kets for fertilisers, energy, or metals and minerals, provides a different picture that is worth ex- ploring further. Seen from this angle, developments would point at three different, but parallel dimensions that characterised commodity price movement after 2006: higher volatility, signifi- cant price co-movement, a higher price level for all commodity price indexes. While it is true that price volatility and price co-movement, which initially led the debate on the causes of price developments, seem to be on the decline, the level of agricultural prices has remained high, and is expected to remain above previous (i.e. pre-2008 price-spike) expectations for the foreseeable future.