Description:
Global commodity markets are affected by
a variety of government policies that may expand or lower
overall supply and as a result affect world prices for the
specific products concerned. Market failures and market
structures (market power along the value chain) also affect
supply. This paper briefly reviews a number of factors that
may distort international commodity markets with a view to
identifying elements of an agenda for multilateral
cooperation to reduce such distortions. Much of the policy
agenda that arises is domestic and requires action by
national governments. But numerous policies -- or absence of
policy -- generate international spillovers that call for
the negotiation of international policy disciplines.
Independent of whether distortions are local or
international in scope, the complexity of prevailing market
structures and their impacts on efficiency call for much
greater monitoring and analysis by the international community.