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Abstract
Projections on the development of agricultural commodity markets underlie a given set of
assumptions on economic growth. However, recent economic and financial crisis, as well as
signs of quicker recovery in emerging economies, increase uncertainty in the forecasts of
macroeconomic developments. This paper analyses the effects of different economic growth
scenarios on agricultural commodity markets. In particular we assess the potential impacts of
a faster economic growth in emerging economies on the one hand and of a replication of the
recent economic downturn on the other hand. The empirical analysis uses the AGLINKCOSIMO
model and builds upon the recently published European agricultural outlook of the
EU Commission. The simulation results demonstrate that higher economic growth influences
demand more than supply, resulting in higher world market prices. Emerging economies tend
to import more and stock less in order to cover their demand needs, while the rest of the world
increases its exports. In total the ending stocks decrease and combined with the increased
consumption, the stock-to-use ratio decreases. Replication of an economic downturn affects
the markets differently, depending on how elastic or inelastic the markets react to price
signals. Livestock markets appear more stable and do not regain their baseline levels within a
5-year period. The magnitude of the effects is smaller the longer the simulated time path is
and certainly depends on the introduced shock.