Commodity price volatility: causes, policy options and prospects for African economies

John J. Struthers*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter


This chapter outlines the main causes of commodity price volatility and their impacts on developing countries, especially for African countries. The chapter considers the historical evolution of commodity price volatility, particularly for countries described by UN organisations such as UNCTAD as commodity dependent developing countries (CDDCs) who depend for at least 60% of their export earnings on primary commodities. The chapter also sets out a historical analysis to map the evolution of policies to deal with the problem of commodity price volatility. It analyses the reasons why the price-setting International Commodities Agreements (ICA’s) collapsed in the 1980’s and 1990’s. The chapter then reviews the academic literature on the subject including: the impact of financialisation; global value chains; and institutional initiatives such as the creation of commodity exchanges in some African countries which have been established to mitigate the negative effects of price volatility on producing countries. The chapter concludes by discussing the way forward in policy terms for CDDCs, especially in Africa.
Key words: commodity price volatility; CDDCs; financialisation; global value chains; commodity exchanges; policies.
Original languageEnglish
Title of host publicationLogistics and Global Value Chains in Africa
Subtitle of host publicationThe Impact on Trade and Development
EditorsAdebisi Adewole, John J. Struthers
Place of PublicationLondon
PublisherPalgrave Macmillan
Number of pages36
ISBN (Electronic)9783319776521
ISBN (Print)9783319776514, 9783030085025
Publication statusPublished - 15 Aug 2018

Publication series

NamePalgrave Studies of Sustainable Business in Africa
PublisherPalgrave Macmillan


  • commodity price volatility
  • CDDCs
  • financialisation
  • global value chains
  • commodity exchanges
  • policies


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