Integrating Commodity Information, Market Transparency and Knowledge Management Geneva, 18 April 2006 Geneva, 18 April 2006

Are Commodity Markets in Developing Countries Efficient? I – Are Commodity Markets in Developing Countries Efficient? Technology as a Factor of Production II – Technology as a Factor of Production III. How to use Innovative Tools Developed by UNCTAD - Infocomm&Infoshare

Technology (including ICT) as a Factor of Production (productivity growth/ technical progress) Are Commodity Markets in Developing Countries Efficient?

Technological Development in Production In countries such as United States, Australia, China and Brazil, costs of production are declining mainly due to new technological developments. For instance, in 2005, 24% of world cotton under cultivation are estimated to be under GM varieties against 2% in 1997, corresponding to 34% of world cotton production and more than 30% of world exports.

Technological Development in Production Use of satellite imagery in commodity production

Technological Development in Trading and Marketing n Innovation to successfully link input and output markets and enforce contracts (e.g. traders’ associations, contract farming, inter-linked contracts between traders and growers) as well as market-based instruments (e.g. better access to “cheap” finance). n New e-platforms & virtual futures exchanges, etc.

Technological Development in Processing versus Creation of New Outlets n In the 1980s and 90s, innovation fostered the emergence of new products - sweeteners (e.g. sugar) & synthetics (rubber, fibers) – ”displacing demand” and reshaping traditional supply-demand equilibrium “(toward over-supply)”. n In the 2000s, innovation tends to turn some agricultural products into energy (e.g. bio-ethanol & bio-fuel) – ”displacing traditional agricultural supply”.

Enhancing Information to Reduce Asymmetries “For countries in the vanguard of the world economy, the balance between knowledge and resources has shifted so far towards the former that knowledge has become perhaps the most important factor determining the standard of living - more than land, than tools, than labor.” World Development Report, 1998

Commodity information Market Intelligence Knowledge management Interlacing commodity information, market intelligence and knowledge management

Overview Why INFOCOM What is INFOCOMM? How to access it? Its content & coverage Its utility How to use it?

INFOCOMM The power of sharing commodity related information Asymmetry in commodity related information; Need of analytical tool for policy makers and commodity operators - to assess the rapid changes in commodity market structures, adjust their policies accordingly and increase competitiveness (increase efficiency, expand markets, Long-established sources of information dispersed and not always well structured; Massive flow of electronic news and information-quite heterogeneous and not always accurate; Need to respond to business opportunities, gain negotiating power and capture value).

INFOCOMM Knowledge management approach Aims: Promoting market transparency; Improving understanding of commodity structures; Enhancing access to the analysis vital to the formulation of pertinent policies for commodity production, marketing, processing and financing.

INFOCOMM is an international electronic portal containing detailed information on commodity-related issues including comprehensive on- line profiles. Under the aegis of UNCTAD technical assistance programme, in-depth analysis of main commodity sectors are under development. This work consists of a balanced review of commodity sectors, in particular to practical aspects such as uses, technologies and quality standards, and also as regards to added-value information on market structures, economic policies, price discovery mechanisms and emerging futures markets.

Main Coverage: Nearly 40 commodities by the end of the programme Contents: ten harmonized entries containing on-line graphs, interactive maps, tables and main information on: Characteristics of the commodity Quality (Harvest, quality standards, etc.) Uses Market (production, trade) Marketing chains Companies Technology Prices Economic policies

Natural Gas Olive Oil Jute * Karité * Nickel * Palladium Oil * Commodity already available in April 2006 Platinum Pepper * Rice Sugar * Tobacco * Tea * Zinc * Citrus fruits Cashew nuts * Banana Temp. timber * Cocoa Cotton Iron ore/Steel * Wheat * Only available in French

Expected Commodities in May 2006 Rubber, Diamond Other commodities expected in 2006/07: Aluminium, Coffee, Copper, Pineapple, Silver, Coal, Coffee, Electricity, Fertilizers, Gold, Maize, Nuclear, Orange, Palm Oil, Tin, Mango.

As the United Nations General Assembly declared 2004 the International Year of Rice, this commodity was selected as a pilot product to issue, through INFOCOMM, a monthly report (available in French, English and Spanish) on the world rice market. Partenship on cotton Partenship on citrus fruits Partenship on banana

Other information available On-line database of documents related to commodity issues (around 600 documents are currently available On-line databases Collaboration with UNEP to link INFOCOMM with their «meta-bases» for disseminating statistical data and indicators on agriculture, energy, population and natural disasters. Development (for illustrative purpose only) of maps with main natural resources (mining, agriculture and energy) to provide for selected number of countries specific information on domestic commodity markets. Implementation of an alert system for partners

Expected additional activities: Expand coverage of INFOCOMM portal in adding 10 commodities; development of specialized tool kits and of an off-line CD-rom on main commodity sectors to be distributed to INFOCOMM partners; Develop a database sharing system to provide interested national relays with the possibility to use a participative instrument; Organize a series of workshops for fostering capacity building to be able to meet (and provide answer) technical assistance requests from countries using INFOCOMM materials and in establishing national relays backed by INFOCOMM structure.

INFOCOMM VISIT

Other expected activities: Develop innovative tools to provide in-depth information on selected commodity sectors, and in particular to design as a pilot scheme, a CD-rom on cocoa market structures (analysing cocoa market chains and the specific situation of producing countries) as well as special issues of specific interest (potential of niche markets, exogeneous factors impacting the production, fair trade market, etc.). A specialized glossary will be included as well as a series of video to illustrate the situation of the different stakeholders. Such information will be rather useful to review the situation of economic agents involved in the cocoa market; Prepare a detailed publication on latest trends and new developments related to commodity markets. The next issue, "World Commodity Survey » will be published.

NEW DEVELOPMENT an information-sharing pilot scheme developed in the field. Purpose to collect quantitative and qualitative data related to market and pricing discovery mechanism for main Commodity sectors INFOSHARE: In April 2005, the UN Department of Public Information in NY as one of the « 10 stories the world should hear more about »

INFOSHARE is a flexible database system for gathering and sharing information on commodity prices (including farm, export and import prices). It can also include data on intermediate costs such as transportation and storage, as well as information on national quality standards. Different qualitative information (e.g. national quality standards, exporters, interest rates used in the selected sectors) can also be collected. Infoshare is partly a communal service and partly restricted to partners who have agreed to participate. A pilot version of INFOSHARE was launched in 2005 and is being tested in Cameroon. If successful, it will be replicated in other countries.

Film clip

For further information on this issue: Olivier Matringe Coordinator, INFOCOMM Commodities Branch, DITC United Nations Conference on Trade and Development (UNCTAD) 8-14 Palais des Nations 1211 Geneva 10, Swizterland Tel / Fax / or