Going Against The Grain On The Post-2005 Commodity Price Boom
By Carnegie Endowment:
By John Baffes
Over the past decade, metal and energy prices have tripled while food prices have almost doubled. Many observers have responded to those increases by reflexively pointing to rapid growth and industrialization in emerging markets, arguing that a structural shift in the demand for commodities was under way. Given that China and India together account for 37 percent of the world's population, even minor changes in their pattern of demand growth are capable of affecting world commodity prices.In reality, emerging market demand has driven a structural shift in the demand for refined metals and is a key factor behind soaring energy prices. But it has played a much smaller role in the post-2005 food commodity price boom than is commonly supposed.
Emerging Markets and Extractive Commodities
As commodity prices spiked after 2005, emerging markets experienced unprecedented growth. Between 2003 and 2007, growth in developing countries averaged 6.9Complete Story »