In the face of escalating conflicts, economic slowdowns and downturns, and the growing climate crisis, the Agricultural Market Information System (AMIS) plays a crucial role in enhancing transparency and policy coordination in international food markets, Maximo Torero, Chief Economist of the Food and Agriculture Organization of the United Nations (FAO), has said.
Speaking at an expert panel at the Global Forum for Food and Agriculture (GFFA) 2024 in Berlin, he stressed how AMIS has helped to prevent unexpected price hikes and strengthen global food security.
AMIS was launched in 2011 by the G20 Ministers of Agriculture following the global food price hikes in 2007/08 and 2010. The information system, composed of G20 members plus Spain and eight additional major exporting and importing countries of agricultural commodities, assesses global food supplies (focusing on wheat, maize, rice and soybeans) and provides a platform to coordinate policy action in times of market uncertainty. Hosted by FAO, AMIS involves nine international organizations and aims to address the inherent risks and uncertainties within agrifood systems.
Torero outlined that the market concentration of the key exporters of cereals in the world makes the agrifood system vulnerable by definition to external shocks, and any impact in any of the key exporting countries of the key cereals will have a direct consequence on prices and volatility. The expert also raised the importance of logistics in assuring mobilities of cereals and agricultural inputs around the world. These factors, he said, make the system also highly susceptible to shocks, ranging from conflicts and wars to climatic and water stress, resulting in immediate price fluctuations in global grain markets.
AMIS, he said, plays a pivotal role in reducing information asymmetry, a crucial factor in preventing wrong policy responses such as export distortions, market volatility, and potentially excessive speculation. The FAO Chief Economist highlighted AMIS’ contribution to providing comprehensive information on supply and demand dynamics, enabling market participants to make informed decisions during periods of excessive volatility.
Acknowledging the challenges faced by the initiative, particularly in obtaining information from certain countries, he stressed the need for continuous updates and finding alternative ways to address data gaps.
TORERO HIGHLIGHTS ENHANCED FOCUS ON LOGISTICS
Torero also emphasized the importance of expanding AMIS's focus to include logistical considerations, especially in the context of rising insurance costs and geopolitical risks in crucial transportation routes. With the impact of COVID-19 underscoring the significance of logistics, Torero explained AMIS's decision to enhance its data on the logistical side, working closely with partners to improve understanding and mitigate risks.
“Logistics is also important, not just because of ports being closed, but because of prices of insurance companies going up and risks that we are facing in the Red Sea, risks that we face in the Black Sea, and risks that we could be facing because of lower levels of water in the Panama channel, which are central for us to move commodities across the world,” he explained.
Looking ahead, Torero outlined AMIS's efforts to enhance predictive capabilities and model the potential impacts of various shocks on global food markets. With support from AMIS partners, like GEOGLAM, OECD, International Food Policy Research Institute (IFPRI), The World Bank, and others— and the Japanese government financial support— AMIS aims to improve its foresight and predictive capacity of the effects of weather disruptions, economic shifts, and political and policy changes.
Torero highlighted the importance of learning from recent shocks such as COVID-19 and the war in Ukraine, underlining the need to continually adapt and enhance the tools available to AMIS to increase global food market resilience.