Price volatility in agricultural markets (2000-2010) implications for Latin America and policy options.

In light of recent trends in international agricultural markets, and in the interest of analyzing, contributing to discussions of and making informed decisions on how to address the complex problem of price volatility, we are pleased to present this first issue of the ECLAC-FAO-IICA Bulletin, prepared within the framework of an initiative launched by our institutions in 2009 calling for the annual publication of a document on the state of and outlook for agriculture and rural life in Latin America and the Caribbean. Since mid-2010 and throughout the early months of 2011, global food prices have been steadily rising, surpassing even the levels reached during the crisis of 2008. For those countries of the region that specialize in the export of raw materials, this increase in agricultural prices affords them a unique opportunity to improve their terms of trade. However, it may also be very costly for them in terms of decreased food security, increased malnutrition and possible social unrest, especially in net food importing countries. The persistence of volatility, which is the result of constant variations in price, will continue to create great uncertainty for farmers, added to the great risks already posed by climate change and recurrent pests and diseases.