Agricultural-Commodity Price Swings Seen Rising by Tozer

Farm-commodity price swings are set to increase on tight supply, said Bruce Tozer, a consultant at De Novo Agricultura and former head of EMEA sales for soft and agricultural products at Credit Agricole SA. He spoke at a commodity-industry meeting in Geneva organized by the United Nations Conference on Trade and Development.

On speculation in agricultural commodities, price swings and regulation:

“If you took away all derivatives you would still have volatility, as you see in commodities that don’t have futures markets. Physical markets without futures markets are experiencing high levels of price volatility, so there is something happening over and above financialization.

‘‘Evidence for and against is contradictory and view-dependent. So regulation is likely to be view-dependent and based on the strongest voice. Beware of polemical debates and easy conclusions. If we drive liquidity out of these markets, we risk driving finance out.

‘‘If you want to reduce volatility in the agricultural market, you have to increase supply. Volatility is likely to rise, not reduce. Supply-side issues are getting more acute, not less acute.’’

On water as a commodity:

‘‘I don’t think you’ll see a global commodity market in water. It’s too regionalized, too dependent on local watersheds, too strategic. There has to be a huge effort of pricing water in local markets better, so it isn’t wasted. It’s going to be more valuable than oil.”