Commodity Price Volatility: The Impact of Commodity Index Traders

Over the years, critics have argued that futures market prices have been either too low or too high. Speculators have often been the target for the wrath of those feeling the futures price does not properly reflect market fundamentals. Recently, the criticism has been vented toward a new type of speculator that has been blamed for the dramatic changes in agricultural commodity prices experienced over the last several years. Commodity index traders (CITs) and other large institutional traders are commonly accused of exerting a destabilizing influence on commodity prices. The intensity of the debate over the role of CITs appeared to wane with the reduction in commodity prices since 2008 but the recent release of a well-publicized OECD report on the issue by Irwin and Sanders (2010) along with the doubling of wheat prices and the claim by von Braun (2010) and others that the rise was due to speculative activity has renewed the debate.


Issue Date:
2010-10
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/95803
Total Pages:
30
Series Statement:
Commissioned Paper
2010-02




 Record created 2017-04-01, last modified 2017-08-22

Fulltext:
Download fulltext
PDF

Rate this document:

Rate this document:
1
2
3
 
(Not yet reviewed)