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Commodity markets are still highly unstable Extreme price volatility

Issues to address. Commodity markets are still highly unstable Extreme price volatility Many commodity-dependent economies unable to participate effectively and diversify successfully. Commodity booms and busts caused in part by speculation disrupt the investment process

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Commodity markets are still highly unstable Extreme price volatility

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  1. Issues to address • Commodity markets are still highly unstable • Extreme price volatility • Many commodity-dependent economies unable to participate effectively and diversify successfully. • Commodity booms and busts caused in part by speculation disrupt the investment process • There are structural mismatches between supply and demand. • Risk management at a micro/local transactional level difficult to access and at high cost • Smaller scale participants continue to face challenges of access to finance, logistics and other services in supply chains. • Improvements in functioning of commodity markets and commodity policies are of importance for achieving sustainable production and consumption modes

  2. GCF: a multi-stakeholder approach • History shows that attempts to address commodity problems only through inter-governmental negotiations is not enough • Intervention has in the past created challenges • GCF will be a neutral platform bringing together key stakeholders • Only a dialogue between ALL stakeholders may enable moves towards an optimal balance between market practices and regulation.

  3. The Structure of GCF • The first GCF meeting focuses on extractive industries – oil, gas and metals markets • Plenary and parallel sessions focus on market instability/price volatility, developing sustainable supply capacity and making commodities an“Ëngine for Growth” • Plenaries tend to be policy focused and the parallel sessions are more market orientated • Structure envisages GCF in future as not just a meeting event but also an information portal. Weplan to develop a GCF eForum websiteto distribute UNCTAD analytical materials(issues for discussion, specialisedjournals and publications)

  4. Who is coming to GCF? Governments: 7 government ministers have confirmed; Ecuador, Mali, UAE, Iraq, Switzerland, Qatar. More are expected. Heads of international agencies: OPEC, CFC, ACP Secretariat, IEA, WTO* Private sector – more than 40 banks including Deutsche Bank, HSBC, SMBC, BNP Representative organisations such as the Berne Union Commodity exchanges: CME, DubaiMercantile Exchange, LME Academics & others More than 200 delegates registered

  5. Reaching Stakeholders SUC outreach globally Email, dedicated registration platform Development of central online database for GCF/SUC

  6. What will be achieved? • Improving communications between key stakeholders • Creating platform to regain consultation initiativeon key commodity issues • Improved information-sharing in and transparency • Understanding volatility and risk issues from a management perspective • Tackling the regulatory dilemma & dealing with volatility debate • Improving information flows and measurement of the commodity economy • Assessing mechanisms to better contribute to price discovery/transparency • Improved supply and demand forecasts • Combining supply and stock management

  7. Thank you for your attention For further questions: rouben.indjikian@unctad.org daniel.day-robinson@unctad.org Special Unit on Commodities UNCTAD

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