(e) Price volatility

It is a sector marked by strong price and volume fluctuations.

With regard to commodity prices it was suggested that income, rather than price, fluctuations are the real problem.

CAMBRIDGE The prices of hydrocarbons, minerals, and agricultural commodities have been on a veritable roller coaster. While commodity prices are always more variable than those for manufactured goods and services, commodity markets over the last five years have seen extraordinary, almost unprecedented, volatility.

Change due to fluctuation in the cost of fuel and lubricants.

Security problems and disruptions in production also increased price volatility.

But primary product prices remain much more volatile than the prices of manufactured goods and services, causing large fluctuations in producers incomes. This exaggerates the effects of booms and busts.

Oil prices rose throughout 2004, with accelerating fluctuation as prices peaked in August and October.

The trade of African countries is still dominated by commodities, which are subject to volatile price movements beyond their control.

Although these factors insulate the US from the inflationary pressures stemming from exchange rate fluctuations, they increase the vulnerability of other countries, especially emerging economies. Because the dollar prices of most of these countries imports are not very responsive to exchange rate movements, the pass through of those movements into import prices denominated in their home currencies is close to 100 .

Second, because most exporters also import intermediate inputs that are priced in dollars, exchange rate fluctuations have a limited impact on their costs and thus on their incentive to change dollar prices. And, third, exporters who wish to preserve their share in world markets where prices are largely denominated in dollars choose to keep their dollar prices stable, to avoid falling victim to idiosyncratic exchange rate movements.

To achieve stable conditions in commodity trade, including avoidance of excessive price fluctuations, at levels which would

Chapter 3. Price control measures Measures intended to control the prices of imported articles for the following reasons (i) to sustain domestic prices of certain products when the import price is inferior to the sustained price (ii) to establish the domestic price of certain products because of price fluctuations in the domestic market or price instability in the foreign market and (iii) to counteract the damage caused by the application of unfair practices in foreign trade.

Manual price update...

In fact, most dollar commodity prices have fallen since the first half of the year. Though a host of sector specific factors affect the price of each commodity, the fact that the downswing is so broad as is often the case with big price swings suggests that macroeconomic factors are at work.

The Panel notes that, although loss in quality could reduce the prices of crops, crop prices can fluctuate for a variety of other reasons related to the economics of supply and demand.

One could emulate J.P. Morgan, whose standard response to questions about stock prices, bond prices, and interest rates was to say simply, The market will fluctuate.

Moreover, those countries did not have a diversified export base and were very vulnerable to fluctuations in commodity prices.

Here, the Fed is making a fatal mistake, as it relies heavily on a timeworn inflation forecasting methodology that filters out the special factors driving the often volatile prices of goods like food and energy. The logic is that the price fluctuations will eventually subside, and headline price indicators will converge on the core rate of inflation.

UNCTAD is also actively working on issues related to the impact of oil price volatility on African oil importing and oil exporting countries.

The Fund currently assists producers to mitigate price fluctuations through market based price risk management instruments, in close cooperation with the World Bank and other cooperating institutions.

Recent global economic trends called for major policy initiatives, for example for export diversification, investment in infrastructure and control of price volatility.

As can be seen from Figure 2, world steel prices varied considerably during the period 1974 2004.

A critical role of marketing boards has been to shelter SSA farmers from extreme price fluctuations.

The Notice clearly stated that it is necessary to strengthen price monitoring and early warning and pay close attention to market price dynamics.

Long distance telephone service sold on price, price, price fast food restaurants with all their value pricing and even the Internet is commoditizing not just goods, but services as well.

The G 20 s efforts will culminate in the Cannes Summit in November. But, when it comes to specific policies, caution will be very much in order, for there is a long history of measures aimed at reducing commodity price volatility that have ended up doing more harm than good.

Rendahnya harga komoditas dengan penurunan peak to trough lebih dari 30 berlangsung selama durasi yang sama, rata rata sekitar tujuh tahun. Kini kegagalan tersebut memasuki tahun keempatnya dan harga komoditas non minyak (dibandingkan harga ekspor barang manufaktur) telah merosot sekitar 25 .

That is a surprising proposition, given that commodity bonds have an obvious latent market, rooted in real economic fundamentals. After all, steel companies have an inherent need to hedge against fluctuations in the price of iron ore, just as airlines and utilities have an inherent need to hedge against fluctuations in the price of oil.

Our proposal to reduce but not eliminate swings from parity recognizes that price fluctuations may be crucial for markets to ascertain the price of assets that promise an uncertain payoff. But currency swings, if too wide and protracted, can impede real economic activity, which is why intervention is sometimes necessary.

While the Fed tries to look past transitory fluctuations in commodity prices, it will be hard to ignore rising consumer inflation as the huge drop of the past year particularly in energy prices stabilizes or even reverses. Indeed, any standard decision rule used by central banks by now dictates that a hike is long overdue.

Sekarang tiba waktunya untuk berinvestasi pada produksi tenaga surya berskala besar. Sebagai awalnya, biaya konstruksi pembangkit listrik tenaga surya akhirnya cukup rendah sehingga dapat menghasilkan listrik dengan tarif yang kompetitif dan stabil selama 25 tahun.

Popular discontent over food prices has fueled political instability in some countries, most notably in Egypt and Tunisia. Even agricultural producers would prefer some price stability over the wild ups and downs of the last five years.

In theory, government stockpiles might be able to smooth price fluctuations. But this depends on how stockpiles are administered.

(As the old adage has it, banks only like to lend to those who do not need money.) Economic activity is thus even more volatile than commodity prices, and much of the gains made in a boom unravels in the bust that follows.

Recently, affected by seasonal changes, natural disasters and sudden outbreaks, prices of agricultural products necessary for daily life such as vegetables and pork have fluctuated in some areas.

Preparations for remaining price collection activities

External change in market price levels

Similarly, the Euro VIX, a popular measure of expectations of euro volatility, has fallen significantly. The cost of buying protection against fluctuations in the euro dollar exchange rate declined last month to its lowest level in nearly five years.

Why Are Commodity Prices Falling?

Most such countries were dependent on only a few commodities, which exposed them to external shocks produced by international price fluctuations and a decline in terms of trade.

There is a huge amount of gas to be saved, about half the projected gas at about an eighth of its price.

In reality, while currency movements can have a significant impact on inflation in other countries, dollar movements have rarely had a meaningful or durable impact on prices in the US. The difference, of course, lies in the US dollar s dominant role in the invoicing of international trade prices are set in dollars.

Apart from wood, gold and diamonds, agricultural production is subject to the vagaries of climate and fluctuations in world commodity prices.

In the US, the core inflation rate (which strips out changes in volatile energy and food prices) was 1.6 over the last 12 months. Moreover, the US Federal Reserve, the Bank of England, and the European Central Bank understand that even if energy prices do not rise in the coming year, a stable price level for oil and other forms of energy will cause the inflation rate to rise.