Hong Kong 2011 Event

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Commodity Prices - Outlook for Markets and Policy
7 July 2011 - Conrad Hotel, Hong Kong

The sustained rise in commodity prices has had a dramatic effect on developed and emerging economies. Despite a recent correction, prices are still sharply higher than a year ago, hampering growth and fuelling inflationary pressures, with social tensions surfacing particularly over the cost of fuel and soaring food prices.

The situation is also prompting a debate over cause and effect, and questions over policy. While many analysts agree that ever-rising demand for raw materials -- as well as changing diets -- in enormous, fast-growing emerging economies like China and India is a main cause of the current commodities boom, some have also pointed to the US Fed's loose monetary policy as giving strength to the spike  - one of the costs of recovery from the global economic downturn.

In the West, higher oil prices have contributed to a re-evaluation of the timing of that recovery, forcing policy-makers to take the unusual step of releasing oil stocks to dampen speculation. The focus is also on China, already facing its highest inflation in almost three years due to its rapid economic growth. Its response has been to impose controls on consumer items and ask producers not to raise retail prices. The government may soon begin to allow the renminbi to appreciate at a faster rate, a move that could have substantial knock-on results on global trade.

However it remains to be seen whether such measures help to dampen commodity prices or merely deal with short-term market, economic and social volatility. If commodity markets were functioning normally, high prices would lead to increased supply and eventual price reductions. The growing concern is that supply bottlenecks are deep-rooted, and China and India's hunger for commodities will be to some extent insatiable. If high commodity prices are indeed a new long-term reality for the global economy, how should policy-makers respond? Or is the recent correction a sign of further price declines? Will the potential brake on the global economic recovery itself contribute to slowing the commodity price surge?

In the latest in a global series of strategic forums, the Financial Times and Credit Suisse will gather senior traders, economists and investors to discuss the outlook for commodity markets and the policy options for China, India, the US and other key emerging and developed economies. This invitation-only lunch forum, chaired by the FT's Chief International Finance Correspondent Henny Sender, will feature a panel of high-level experts including Ric Deverell, Credit Suisse's Head of Commodities Research.