New shocks, old tools: Revisiting international commodity agreements in a fragmented world

Recent volatility in commodity prices, along with renewed concerns about energy and food security, has brought fresh attention to commodity supply management. Many of today’s proposals—for energy, metals, and food products—echo earlier appeals to establish international commodity agreements (ICAs). While targeted, temporary interventions can mitigate acute supply disruptions, long-term price management schemes have a poor track record. As policymakers consider such proposals, history urges caution. Over the 20th century, nearly 30 ICAs were created, spanning a range of non-energy commodities. These included metals (such as copper and tin), agricultural raw materials (including natural rubber and wool), food commodities (such as wheat and sugar), and beverage commodities (such as cocoa and coffee). The agreements had various objectives, including managing excess supply, reducing export-revenue volatility, stabilizing (and sometimes raising) prices, and ensuring adequate supply for ...