Agricultural Commodities and their Financialization

Abstract

Agricultural commodities, here considered as renewable products, are critical to many developing countries. Not only are their prices rising, along with price volatility on both spot and future markets, but also an increasing financialization of these products is making itself felt. All this may become a threat to many segments of the populations of low income countries. In this paper, we build a model to help understand how the economic and financial effects interact to produce, for example, food shortages. We explore the consequences and potentials for control.

Keywords: renewable products, agricultural commodities, food shortages, financialization

JEL Classification: G15, Q14, C61