With demand for basic commodities such as wheat and copper set to
soar over the next 20 years, relatively small shocks to supply risk
causing sudden price rises and triggering "overreactions or even
militarised responses", says a report by the Chatham House think tank.
Global trade is so interconnected that no importer of resources is
insulated from the problems of key exporters – a fact of concern to the
UK, which imports 40 per cent of its food and a high proportion of the
fossil fuels and metals it consumes, the think tank warns.
"Shocks
reverberate across supply chains when communities protest in Peru,
rainfall levels drop in the American Midwest, or a flood hits Australia –
often sending the global resource markets into a tailspin," according
to the report, entitled Resources Futures. Chatham House is calling on
the world's 30 biggest producers and consumers of resources – including
the UK, China and the US – to form a G8-style "coalition of the
committed" to tackle the increasing volatility in global commodity
prices.
"As a major importer of resources and an important donor
to the developing world the UK can play a very important role in this
coalition," Bernice Lee, the report's lead author, said.
The price
of the average commodity, including everything from corn and soya to
nickel and iron ore, has soared by 147 per cent in real terms since 2000
as fast-growing countries such as China demand ever-more resources,
while the global population rises and weather increasingly deviates from
traditional patterns.
Article Source:
Independent