Commodity Price Volatility: The Impact of Commodity Index Traders

Getu Hailu and Alfons Weersink

No 95803, Commissioned Papers from Canadian Agricultural Trade Policy Research Network

Abstract: Over the years, critics have argued that futures market prices have been either too low or too high. Speculators have often been the target for the wrath of those feeling the futures price does not properly reflect market fundamentals. Recently, the criticism has been vented toward a new type of speculator that has been blamed for the dramatic changes in agricultural commodity prices experienced over the last several years. Commodity index traders (CITs) and other large institutional traders are commonly accused of exerting a destabilizing influence on commodity prices. The intensity of the debate over the role of CITs appeared to wane with the reduction in commodity prices since 2008 but the recent release of a well-publicized OECD report on the issue by Irwin and Sanders (2010) along with the doubling of wheat prices and the claim by von Braun (2010) and others that the rise was due to speculative activity has renewed the debate.

Keywords: Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 30
Date: 2010-10
New Economics Papers: this item is included in nep-agr and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Commodity Price Volatility: The Impact of Commodity Index Traders (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:catpcp:95803

DOI: 10.22004/ag.econ.95803

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