13 April 2005
Committee on Commodity Problems Opens at FAO
Producer Prices Stand at Historic Lows
(Reissued as received.)
ROME, 12 April (FAO) -- The Committee on Commodity Problems (CCP) opened its sixty-fifth session at the headquarters of the United Nations Food and Agriculture Organization yesterday, the food agency announced today amid concern over low producer prices for many of the worlds major agricultural commodities, such as coffee, sugar, meat, oils and cotton. The CCP is an interim committee of the FAOs governing Council and will be in session through 13 April.
The committee will review reports from the Intergovernmental Groups on a number of commodities, will examine food security in light of trade policy reforms, and will discuss emerging issues of importance to agricultural commodity markets.
According to one of the documents prepared for the meeting, international prices of agricultural commodities have generally made a hesitant recovery following the prolonged slump through the second half of the 1990s. However, the report says, for most commodities, real prices have remained at historically low levels and the longer term trend continues downward. Variability continues to be the dominant feature of commodity price behaviour.
Coffee Markets Have Undergone Structural Changes
For example, the CCP document says, international coffee prices fell 58 per cent between 1998 and 2001 because of oversupply, sluggish demand and rising stocks. Persistent low prices have led to supply reductions, which have strengthened prices recently. Coffee prices rose 33 per cent between 2001 and November 2004, as a total production for the crop year 2003-2004 reached 6 million tons, the lowest since 1998-1999. In December 2004, coffee prices rose above $1 a pound for the first time since July 2000.
Prospects of a similar crop size in 2004-2005 could result in a continued upward trend in prices, the document says.
The challenge for the coffee industry, according to the CCP document, is how to sustain these better market conditions to avoid a return to the boom and bust cycles. Structural changes have occurred in the coffee market as a result of depressed conditions, including the exit from the industry of higher cost producers and several product differentiation initiatives stimulating demand.
High-Level Round Table on Agricultural Trade and Food Security
The role of the CCP is to review commodity problems of an international nature, to survey the world commodity situation, and to develop policy recommendations for FAOs governing Council. The CCP also monitors food aid, which has taken on increasing importance as current World Trade Organization negotiations may have implications for food aid and trade.
A high-level round table on agricultural trade reforms and food security will take place tomorrow at FAO during the CCP. President Olusegun Obasanjo of Nigeria and Director-General Supachai Panitchpakdi of the World Trade Organization will participate along with senior representatives from ministries of agriculture and ministries of trade.
Alexander Sarris, Director of FAOs Commodities and Trade Division said, The round table will discuss the process of agricultural trade liberalization and its impact on food security and poverty. In particular, I expect we will hear various views on the advantages and limitations of less than full liberalization of agricultural trade from the perspective of enhancing food security.
Coffee Production Photo Exhibit at CCP
The CCP will also be hosting a photographic exhibition on coffee production by photographer Sebastião Salgado. The exhibit, entitled In the Beginning India 2003, is sponsored by illycaffè, in collaboration with the photographic agency Contrasto. The exhibit covers the daily life of workers in coffee plantations in India.
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