Prospects

Which prospects have the prices of agricultural commodities? Buenos Aires, Argentina on March 5, 2009 the recovery of the Argentine economy from its crisis in the year 2002 has been possible thanks to a combination of factors both internal and external. Among the external factors, the evolution of the prices of agricultural commodities (especially, in the price of soy), occupied one role no less that allowed the country significant revenues in foreign exchange and resources for the State, of great utility to consolidate the result fiscal and external, at the time of generating a continuous surplus in the exchange market, of great utility to underpin the stability of the Argentine peso. But Argentina has not been the only country benefited from the boom in agricultural prices. Brazil, Paraguay and Uruguay benefit have also been through the good moment of quotes. In the months leading up to the crisis, international prices of agricultural commodity prices accelerated its growth, and already with the crisis underway, reached their historical highs. In those moments, the market anticipated that agricultural commodities prices would remain high for a few years, supported in the assumption of his low elasticity of them before the economic downturn (which are supported in the low elasticity in the demand for food). But surprisingly, just like what happened with other commodities such as metals and energy prices collapsed towards the end of the third quarter of 2008 and have remained away from the maximums achieved by mid-2008 until early 2009, have managed a recovery product of the negative outcomes that are expected for the 2008/09 cycle at world level (product of adverse climatic conditions in key regions such as Argentina). This same price developments in commodity prices that I am commenting on them, is that has been observed with concern one of our readers that, from Paraguay, made us the following question: what might happen with the prices of the? agricultural commodities in the next two years? In recent times we have had more than one surprise with the evolution of the prices of commodities, so his prediction is not proving anything simple.