CULTIVAR 1 - Volatilidade dos Mercados Agrícolas

24 The focus on stocks brought in turn into the forefront an increasing link of agricultural markets to energy markets through what was at the time an undeniable event. In the short-term, trade policies implemented by certain exporters aggravated the price effect of real or perceived supply shortage on global markets, but the significant increase in the use of feedstuff for biofuels (maize for ethanol in the US, oilseeds for biodiesel in the EU), driven by policy mandates, had an inevita- ble impact on market balance, especially for cereals, by providing a new and clearly observable component of demand growth.This created the tendency for some to attribute a disproportionate role in the increase of agricultural prices to biofuels.Yet the recent stagnation of biofuel demand in both the US and the EU and the persistence of a high level of agricultural prices, indicate that the link of agriculture to energy might be less direct and more complex than the one perceived. The energy link of agriculture was recognised, in different ways, as relevant to these policy approaches via its link to different aspects of food production – such as the direct costs linked to energy, the relative energy costs between various players, or the indirect costs linked to the ups- tream and downstream industries, especially to fertilisers. The shale gas “revolution” in the US brought a new dimension to this complex link through its direct and indirect impacts on commodity prices and the change in the relative production costs of the overall economy and agriculture between the US and its other major trading partners, or the impact of relative gas price changes on the fertilizer market. These developments also add another dimension to the emerging productivity gap between developed and developing world, and the potential difference in impact this gap has across various countries. Therefore, based on the brief description above, both literature and evidence would suggest that the actual causality of agricultural commodity price movements is really multi-dimensional, and much more complex than often described. Price co-movement, which initially led the debate on the causes of price developments, seems to be on the decline, but what can we expect about prospects for price volatility and the level of agricultural prices for the foreseeable future? We have looked into this by comparing volatility and price changes for five distinct time periods, 1961-73, 1973-85, 1985-1997, 1997-2009, 2009-13, each period distinguished by some common features (Graph 3). The recent period of commodity price developments (2009-2013) is not the one characterised by higher agricultural market volati- lity than in the past. Following the steady decline in real terms that has lasted for almost a quarter of a century and resulted in under investment in agriculture, the most important of recent deve- lopments is the very significant increase in the annual growth rate of real prices. Is this mainly a sign of supply constraints, of a demand pull, of the increase in input costs, or the combination of all of the above? The debate still continues but the facts are clear. If any- thing, it is the level of agricultural prices that has been more surprising than the volatility. This result is admittedly counterintuitive. It is true that from the point of view of a farmer used in se- eing annual variations of the price of grains in the range of 20 dollars per tonne around a rather steady long term trend, the significant increase in price variations in recent years, often in excess of 50 or even 100 dollars per tonne, comes as a complicating factor. Farmers after all are more used in responding to changes in nominal prices than in converting them through complex vo- latility formulas. These are the facts, and they tell their own story, adding more uncertainty to market prospects.