Commodity prices rose sharply again in August 2010 as crop production shortfalls in key producing
regions and low stocks reduced available supplies, and resurging economic growth in developing and
emerging economies underpinned demand. A period of high volatility in agricultural commodity markets
has entered its fifth successive year. High and volatile commodity prices and their implications for food
insecurity are clearly among the important issues facing governments today. This was well reflected in the
discussions at the G20 Summit in Seoul in November, 2010, and in the proposals for action being developed for consideration at its June 2011 meeting of agriculture ministers in Paris.
This Outlook is cautiously optimistic that commodity prices will fall from their 2010-11 levels, as markets
respond to these higher prices and the opportunities for increased profitability that they afford. Harvests
this year are critical, but restoring market balances may take some time. Until stocks can be rebuilt, risks
of further upside price volatility remain high. This Outlook maintains its view in recent editions that
agricultural commodity prices in real terms are likely to remain on a higher plateau during the next decade
compared to the previous decade. Prolonged periods of high prices could make the achievement of global
food security goals more difficult, putting poor consumers at a higher risk of malnutrition.
