During this roundtable session, a number of factors were identified as contributing to the volatility in energy, agricultural commodity and food prices, including: the significant increase in demand from the major emerging countries, speculation in derivatives markets (and, more generally, the growing importance of the financial – as opposed to the real – economy), the management of energy production by many governments according to political criteria, and the increasing correlation between the (historically high) volatility of oil prices and that of other commodity prices. In the food sector, problems of access to commodities were also singled out as a determining factor, especially in respect of poorer countries. As regards the events currently unfolding in the Mediterranean region, the participants examined their potential short- to medium-term impact, especially on energy supplies. It was observed that the increase in food prices clearly helped trigger some of the popular unrest now being seen in the Arab world, confirming that the volatility of commodity prices presents a real strategic problem for the international community.
The situation is further complicated by the highly uneven nature of the recovery underway, which sees price pressure coming from regions experiencing rapid growth, whilst difficulties persist in many other countries.
Looking specifically at oil and gas, it was suggested that financialization (and the corollary reduction in real economic underpinnings) has certainly contributed to increasing volatility in recent years. In the case of oil, the price rises have also been due to the mounting costs of exploration and extraction in fields that are becoming increasingly difficult to access. In terms of gas, its price is partly decoupled from that of oil, also because gas markets still tend to be regional rather than global. It was nevertheless felt that the current price trends raise doubts as to the prospects of the move towards alternative energy sources, also considering the slow progress being made in the field of energy savings.
Overall, the upshot of the debate was that the participants remained divided on the relative weight to be accorded to financial factors and to supply and demand factors as determinants of the strong fluctuations witnessed in commodity prices.