The Global Food Market Information Group of the Agricultural Market Information System (AMIS) met in Rome on June 22-23 to discuss the current commodity market outlook for grains and oilseeds. This marked the eleventh meeting since the group was launched in 2011 at the G20 Agricultural Ministerial following the food price spikes in 2007-2008 and 2010. Composed of the principal grain-producing and -consuming countries, AMIS assesses global food supplies (focusing on wheat, maize, rice, and soybeans) and provides a platform to coordinate policy action in times of market uncertainty.
AMIS is composed of G20 members plus Spain and seven additional major exporting and importing countries of agricultural commodities. Together, AMIS participants represent a large share of global production, consumption, and trade volumes of the targeted crops, typically in the range of 80-90 percent. By enhancing transparency and policy coordination in international food markets, AMIS has helped to prevent unexpected price hikes and to strengthen global food security.
To carry out its functions, AMIS consists of:
- The Global Food Market Information Group, assembling technical representatives from AMIS participants, to provide reliable, accurate, timely, and comparable market and policy information;
- The Rapid Response Forum (RRF), composed of Senior Officials from AMIS participants, to promote early discussion about critical market conditions and ways to address them; and
- The Secretariat, involving 11 international and inter-governmental organizations (including IFPRI), to produce short-term market outlooks, assessments and analyses, and to support all functions of the Information Group and the RFF.
The AMIS Market Monitor provides a synopsis of major developments in international commodity markets, focusing on wheat, maize, rice, and soybeans. It represents the collective assessment of AMIS’s member organizations concerning the international market situation and outlook. Published ten times a year, the report aims at improving market transparency and detecting emerging problems that might warrant the attention of policymakers.
The emergence of droughts across Southern Europe and the Black Sea region and in North America during the summer of 2012 posed an early test for AMIS and the RRF. As commodity prices began to rise sharply in the summer of 2012, many were concerned that the crop shortfalls would result in another food price crisis as had been experienced in 2007-2008 and again in 2010-2011. Questions from the international press focused on whether the newly created RRF would convene an emergency meeting to discuss the situation and, if so, what, if any actions, could be taken to calm volatile cereal markets. Yet many felt that, despite short supplies, world markets were less volatile than they had been during the previous price spike episodes and were concerned that convening the RRF would instead signal that the market situation constituted a "crisis" and thus could potentially exacerbate price volatility. After careful deliberation and consultation, AMIS members concluded that despite high prices, international markets were operating efficiently, with few of the market disruptions (such as export bans) that had exacerbated price volatility in 2007-2008 and 2010.
So is there still a need for AMIS? Since the price spikes of 2012, commodity prices have generally declined. The FAO Cereal Price Index for May 2017 was 148.0, down more than 40 percent from the high prices seen in the fall of 2012. Apart from key regions facing famine due to weather shocks and political unrest, global supplies remain plentiful. Global stocks for cereals and oilseeds have largely rebuilt, and international price volatility is low. However, experience shows that high prices can and will return at some future point.
In the meantime, the AMIS Market Monitor has added commodity balance sheets from USDA and the International Grains Council, as well as its own estimates. In addition to information on futures prices, price volatility, and market positions, the Market Monitor also provides data on ethanol production and fertilizer prices and provides updates on policy developments in AMIS countries. More importantly, AMIS provides a valuable forum in which members can receive information about market conditions and discuss possible policy options openly and in an informed atmosphere, hopefully avoiding some of the policy mistakes of the past.
Indeed, some have argued for an augmented role for AMIS. In a recent report by Chatham House entitled “Chokepoints and Vulnerabilities in Global Food Trade”, AMIS is identified as a potential platform with which to provide ongoing monitoring of constraints to agricultural trade, to work with governments to harmonize nationally reported, macro-level transport infrastructure and asset data, and to track spending and performance in the food trade sector. Whether such an expansion is warranted is open to debate since it would greatly expand the current remit of AMIS; nonetheless, it speaks to the importance of AMIS in providing a forum to share market information and to help guide policymakers, particularly in times of price uncertainty.
Joe Glauber , is an IFPRI Senior Research Fellow.