Long-term trends, short-term shocks and price spikes in commodity markets aren't just arcane macro-economic phenomena -- they

have very real impacts on the day to day lives of people everywhere. Not only do they affect the price people pay for food and clothing, they can have a larger impact on the overall economic well-being of families, communities -- even entire countries -- that are dependent incommodity exports for cash earnings. According to a new FAO report, The State of Agricultural Commodity Markets (S OCO), the impact of commodity price fluctuations is greatest in the poorest countries of the developing world. "An estimated2.5 billion people in the developing world depend on agriculture for their livelihoods," S OCO points out. And, according to the report, in the second half of the 1990s prices of several commodities exported by developing countries fell to their lowest levels since the Great Depression. Overall, real prices for all agricultural commodities have declined over the past 40 years, but the rate of decline has varied from commodity to commodity. Raw materials, tropical beverages, oil crops and cereals have experienced the steepest declines, S OCO observes. The real price decline for horticultural products, meat and dairy goods has not been so dramatic. In a paper published in ECONOMIC OUTLOOK, Jan 2008 , Commodities Market Impact on Current Account , the Belarusian current account deficit widened to 6.3% of GDP in 2007, from 4.1% of GDP in2006. This was driven by a deteriorating trade balance. From January to October, the trade deficitwidened to U S$ 2.6bn from U S$ 1.4bn during the same period in 2006. This was on the back of importgrowth continuing to outpace export growth. Imports of goods and services increased by 24.2% y-o-y inJanuary to S eptember 2007, while exports only rose by 16.2% y-o-y. Commodities contributedsignificantly to the widening trade deficit. The anticipated widening of the current account deficit in2007 highlighted the countrys economic dependence on Russia.In a paper published by F. Gerard Adams, Jere R. Behrman and Romualdo A. Roldan, they measured the Impact of Primary Commodity Fluctuations on Economic Development . In order to illustrate this, theyfocused on coffee in relation to the economy of Brazil. The relationships between the coffee producingsector and the national economy are established econometrically and

integrated into a macro model of the Brazilian economy. The computations described in this paper indicate that fluctuations in the coffeemarket have magnified impacts on the macro variables of the Brazilian economy. Increases in coffeeoutput and/or in the value of coffee exports translate into a higher real product with effects on income,government revenues, secondary and tertiary sector activity, investment, foreign exchange earnings,imports, etc. Prices are also affected.In another paper published by DONALD H. GOLD, B razil, China Face Impact as Oil, and Ores Crash, on 10March, 2008, Donald studied, how will diving commodity prices affect emerging markets ? It depends onthe emerging markets like China and Brazil whose benchmark stock index has plunged. The Bovespa slid,