HOW WE CAN CHANGE THE WORLD
HomepageSiteMapFavoritesPrintSend to a Friend
Prices of raw materials
Vign_okgi_12
For the last few years, commodity prices have been increasing in a highly volatile way such as costs for gasoline, natural gas, wheat, cotton, corn and other staple products, which seem likely to continue rising for the foreseeable future.
 
What is behind these price increases ? There are several factors, including strong global demand (partially due to increasing demand in developing countries) and a greater synchronization of commodity prices with the often speculative movements of stock markets.
 
In the food sector, changes in nutritional habits, particularly in China and India, and a dramatic rise in the population, are disrupting the balance between supply and demand. As a result, there has been a doubling of the price of peanuts over a two-year period, in three years for refined white sugar, in five years for rice and whey powder and in ten years for crude palm oil.
 
How should we act ?

Recognizing that price volatility and the scarcity of raw materials will be a critical challenge of the years ahead, we must :

- make our supply sources more diverse and reliable
- use multiple contracts to secure an adequate supply and to control prices
- guarantee quality, traceability and ethics by strengthening our supervision processes and holding our suppliers more accountable
- work with local partners to reinforce agricultural networks in developing countries
- purchase raw materials at the source of production to avoid the middlemen in the supply chain
- reduce storage time by limiting the time between orders