The leaders of Brazil, Russia, India, China and South Africa

Thursday, 14 April 2011 07:24

The leaders of Brazil, Russia, India, China and South Africa (BRICS Nations) said extremely volatile commodity prices pose a threat to the global economy. The combined gross domestic product of the BRICS nations will be greater than the US economy by the end of 2014, according to the IMF. By 2016, the BRICS countries will have a GDP of $21 trillion compared to a projection of $18.8 trillion for the US according to the IMF

China is the world’s biggest importer of soybeans and consumer of energy. Russia, Brazil and South Africa, the other BRICS nations, have benefited from rising prices of some commodities such as oil, soybeans and iron ore as they are exporters yet are concerned their reliance on resource exports will stifle diversification of their economies.

Corn, coffee and cotton prices have all more than doubled on global commodity futures markets in the past year, while crude oil prices are up 42 %. This year China is forecast to import 57 million tons of soybeans, or almost 60 percent of global trade.

The BRICS group called for greater cooperation on food security to redress the lack of information on supply and demand. The international community needs to work together to increase production, increasing funding and technological support to developing countries.