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Highlights / Focus

Price Slump in Commodities: Financial Implications for Commodity Exporters

​UNCTAD@MC10 hosted a high level panel on "Price Slump in Commodities: Financial Implications for Commodity Exporters" on 17 December 2015.  The Secretary General Mukhisa Kituyi of UNCTAD opened the high level discussion and was accompanied by distinguished panelists including Cabinet Secretary Mr. Henry K. Rotich of the National Treasury Kenya, Minister of Trade Mr. Thomas Trikasih Lembong​ of Indonesia, and Minister of Trade and Industry Mr. François Kanimba Minister of Rwanda. 

UNCTAD Chief Stephanie Blankenburg​ of the Debt and Development Finance Branch discussed ways in which commodity dependent countries need to address debt and development issues in the current environment of lower commodity prices, and highlighted potential action that could be taken by the international community to address sovereign debt issues.

The panelists discussed the increased financial pressure that commodity export dependent countries have been confronted with in the wake of the prolonged deterioration of commodity prices.  These countries must overcome shortfalls in budgetary revenues from lower commodity prices while also adjusting to higher costs of borrowing. This has resulted in increases in debt servicing ratios to government revenues and to exports.  The countries that are particularly vulnerable to the recent developments include new sovereign bond issuers on the international bond market and countries that whose private sector borrowed heavily against future revenue streams under the assumption that commodity prices would remain high.