Volatility Of Global Commodity Prices – A Stakeholder Mapping Analysis


Published on

A close look at the factors behind world food price volatility - highlighting the influencers, the journalists & the experts that are driving the critical debate forward

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Volatility Of Global Commodity Prices – A Stakeholder Mapping Analysis

  1. 1. Volatility of Global Commodity Prices – a stakeholder mapping analysis Jan – Mar 2011© 2011 COMMETRIC. Influence Analyser Reportwww.commetric.com
  2. 2. INA Analysis – An OverviewOverviewInfluencer Network Analysis (INA) is a patented methodology which combined natural language processing and automated entity extraction, human analysisand sophisticated mapping techniques. It enables the processing of a volume of data on press coverage and shows the inter-connections between all parties.This opens up the chance for communication professionals to ask informed questions about these links, which in turn provides a report offering actionabledata which can enhance a press team‟s performance moving forward. It layman‟s terms – INA mapping shows up good questions to ask, a report such as thisanswers them – the PR team can then act upon these findings.Media SetThe analysed media set comprised 638 articles published in media in the 3-month period between 01 January 2011 and 31 March 2011. The stories weremostly English-language in origin and coming from online sources from across the world.This ‘sample report’ on the volatility of food pricesFor anyone who wishes to influence a debate on a topic of national or international importance it is important to understand who the key participants are, andhow they are connected with each other. This report attempts to do that by identifying the top connections and explaining what they mean.In exploring these connections in a deeper way, the INA methodology guides you into a better understanding of how experts, journalists, government officialsor company executives are linked. It shows you areas of common ground, it shows you where there are exceptions which may be of particular importance.Objectives of INA studies include:– Profile the organisations and organisation spokespeople engaged in media discussion– Uncover the issues and topics that drive media discussion– Discover unknown commentators, influencers and experts– Discover common themes among seemingly unrelated commentators or media outlets– Identify stakeholder opportunities to leveraging programs– Analyze diffusion patterns and information flow– Identify secondary media outlets outside the scope of key targets © 2011 COMMETRIC 2
  3. 3. Executive Summary – The Growing ProblemFood Prices now at 2008 levels – the global benchmark year of food riots around the world• According to the February edition of Food Price Watch, the World Bank‟s food price index rose by 15% betweenOctober 2010 and January 2011, it was 29% above its level a year earlier, and was only 3% below its 2008 peak.Panic buying, particularly by worried Arab nations• With „revolt in the air‟ in Egypt, Tunisia, Yemen, Libya, Syria, Bahrain, Saudi Arabia and elsewhere this pressure ondemand has forced already high food price still further - “Importers are paying 20% more for a metric ton of wheat onthe Paris NYSE Euronext bourse than on the Chicago Board of Trade because they need cargoes now,‖ said GautierLe Molgat, a consultant at Paris-based Agritel, in early February. Queensland floods• Speaking at the Sustainable Phosphorus Summit at Arizona State University in early February, academic expertsDana Cordell & Stuart White saw dangers in instability in the Middle East causing alarm in food security as nearmonopolies of phosphate supplies that constitute (to a large part) fertiliser could be threatened if Morocco fell to thecurrent unrest.Weakening dollar due to U.S. Fed quantitative easing has inadvertently pushed prices higher• The US Federal Reserve‟s policy of quantitative easing inadvertently raised asset prices by buying U.S. Treasurybonds to attack deflation. One side effect of this policy is that the dollar has weakened against other currencies, andthat is what commodities such as wheat or corn trade in; hence the rise.Extreme examples of weather related incidents hitting crop yields in major food producer nations• Climate change, or weather-related incidents have added to worries over supply being able to meet fast growingdemand. For instance, Argentina, Australia & Pakistan all suffered from particularly heavy rains which hit crop yields. Sinaloa (Mexico) flash frostsRussia was recovering from a devastating 2010 drought and is reluctant to resume exports.Affluence or increasing prosperity in emerging markets has led to increased demand• Emerging markets such as China, India and Brazil soaked up a rapidly bigger market share of crops while recoveryin the world‟s biggest economy in the U.S was beginning, boosting demand. And news of a drought in north-easternChina emerged, potentially making matters even worse; Shandong Province, which traditionally grows 20 per cent ofChinas wheat, is facing its worst drought in 200 years. In other areas the big dry is the worst in 60 years.The elephant in the room - oil prices• The Moscow Times recently explained the sharp oil price spikes thus: “Now oil prices are determined not so muchby supply and demand — as was long thought to be the primary factor — but by financial markets. Most oil iscurrently traded using derivative financial instruments that are not based on the physical exchange of crude oil North-eastern China droughtbetween seller and buyer. In the1990s, physical transactions accounted for about 30% of oil traded, but they nownumber less than 1%. In effect, oil has become a speculative commodity whose price is determined by how investorsanticipate its value will increase or decrease at a given point in the future.‖ © 2011 COMMETRIC 3
  4. 4. Executive Summary – The Lack of SolutionsLack of investment in new agricultural techniques• The yield growth in cereals during the 60‟s was around 3% a year. Today it is only 1.1%. There is a big decline becausewe are investing less, the population is growing, incomes are increasing and people are moving to urban areas. Theresult is that we are getting tighter markets: any small shock in the market will have a big effect, as we are seeing.Climate change effects are liable to make matters worseThe modest warming that the world has experienced so far may not be the main cause of the floods, droughts and violentstorms, but the rise in temperature will continue because the world cannot find the political will to stop the greenhouse-gas emissions. Computer modelling suggests that a rule of thumb is that we lose about 10% of world food production forevery rise of 1C in average global temperature.Where are the policies to avert the impact of climate change on agriculture?• ―Nobody has really thought yet about how and if we can mitigate climate change in agriculture," admitted Dr JosefSchmidhuber, head of the global perspectives study unit at the United Nations Food and Agriculture Organisation (FAO),indicating that although there is a lot of talk about averting the impact of climate change, no policies have beenimplemented yet to solve the problem.The Foresight Report on Global Food and Farming FuturesPresented by the UK government‟s chief scientific adviser, Professor John Beddington, the report warned of a “perfectstorm” of a growing population, climate change and diminishing resources for food production. The findings were theculmination of a two-year study involving 400 experts from 35 countries and as Beddington put it, highlights the case for“decisive action and collaborative decision-making across multiple areas including development, investment, science andtrade” to tackle food challenges. President Sarkozy – Head of G20World may see up to 50m environmental refugees by 2020• Predictions made by Professor Cristina Tirado at the annual meeting of the American Association for the Advancementof Science: “When people are not living in sustainable conditions, they migrate.” She was backed by the University ofMichigan‟s Ewan Todd who spoke on how food scarcity was affecting world politics with likely migrant flows northwardsfrom Africa and the USDA‟s Ray Knighton who saw climatic incidents as tipping the balance. He also cited droughts thatmake plants vulnerable to disease, floods that cause fungal infections, changing wind currents that spread diseasespores, suggesting that the transmission of Asian soya bean rust was a classic case.Food & Energy security now critical to avoid conflict• In advance of G20 meetings at the end of January, Indonesia‟ s President Bambang Yudhoyano publicly called on theG20 to focus on food and energy security to avoid conflict as rising populations increase competition for natural Robert Zoellickresources. President of World Bank © 2011 COMMETRIC 4
  5. 5. Executive Summary – Solutions beginning, but conflicts continueArguments over GM/nanotechnology & other new technologies are still raging• Scientists have warned that food prices could double unless farming undergoes the "greenest revolution"including genetic modification, cloned livestock and nanotechnology, but Kirtana Chandrasekaran, Friends of theEarth‟s Food Campaigner, warned that GM is not a silver bullet. “Hopes are pinned on GM technology but cropscience has moved on. Other technologies have delivered drought-resistant plants while GM crops have proved tobe a disaster for the environment and farmers,” she said referring to John Beddington‟s Foresight Report.Solutions cannot be found with money & technology alone• The World Watch Institute‟s ’State of the World’ report for 2010, spoke of „impressive success in terms ofproductivity in major grain producers and some parts of Asia that have raised yields and reduced poverty.‟ It alsosaid that much of south Asia and sub-Saharan Africa was less successful due to under investment in agriculture. Itadded that until recently most policymakers believed that the only route to advancing agriculture in these placeswas to accelerate the so-called Green Revolution – provide more productive seeds and fertilizer and thereby raiseyields. In many cases this has not worked. The notion that world hunger can be eliminated with money andtechnology alone is being discredited not just by its own shortcomings, but by evidence that new approaches to Food & energy prices go on risingbuilding a sustainable, nourishing agricultural system can supplement the innovations found in the standardagricultural toolbox.Need for standardised derivatives trading, & clear information on shared stockpiles to avoidspeculation• Having been badly burnt by the banking crisis of no more than two years ago, there were signs that leadingwestern nations were particularly anxious about letting the market decide matters in such a finely-balancedsituation. So, the period was marked by frenetic activity by the G20 in the form of the incoming French Presidency.Sarkozy argued that unlike oil, information on physical commodity stockpiles must improve (there was not a singlereal calculation when Russia banned grain exports after a damaging drought in 2010). There was talk of investorssetting aside a deposit equal to part of the value of the raw material traded. There was also talk of a stronger bodybeing set up to make the trading of „standardised derivatives‟ more transparent, but, with funding being cut byincoming U.S Republicans to the U.S. Commodity Futures Trading Commission and the European MarketStandards Authority having a staff of less than 100 to cover trading across 27 countries – the talk has yet to convertto deed.New thinking starting to come through• Problems of this scale are bringing forward new thinking: in the UK, the James Hutton Institute was formed fromthe merger of the Scottish Crop Research Institute (SCRI) and the Macaulay Land Use Institute, creating apowerhouse for research into food, land use and climate change that will be the first of its kind in Europe. © 2011 COMMETRIC 5
  6. 6. INA MAP: Organisations on PublicationsNote: The Organisation to Publication map links the participating organisations in the debate (represented by circles) to the publications(represented by squares) in which they received coverage. The size of a circle is representative of the overall number of mentions theorganisation received, the colour shows the category it falls into. The width of the line is indicative of the number of articles in which thepublication mentions the organisation. © 2011 COMMETRIC 6
  7. 7. INA MAP: Organisations on Publications - Key FindingsOrganisations on Publications Organisation Index Monsanto 42.7On an organisational level, businesses, international organisations followed by NGOs figuremost on the Influencer Map. Noteworthy is just how few national government organisations FAO 41.1figure per se, with the exception of the USDA. Although it is fair to say that individuals from UN 37.4national government level seem to have exerted more influence in terms of mentions thanthe institutions they represent have done – particularly when the debate is considered at a DuPont 35.4Sub Topic level (see earlier map). U.S. Department of Agriculture 35.2 In contrast, AAAS, the ISAAA, Rockefeller Foundation and Gates Foundation are far Syngenta 34.9better connected into the main food price dialogue. However, both sets of groups arelocated away from the strongest organisational drivers of the food debate: FAO, UN, World Cargill Inc. 34.8Bank and the EU. World Bank 34.5 Most businesses appeared to be to be found closely around the USDA. Although the map European Commission 34.0points to connections only between Organisations and Publications , the location ofcompanies around the USDA can in some part be said to be reflecting the American Dow AgroSciences 33.4market‟s crucial commercial importance to the agrochemical and food industry.Many of the main agrochemical companies are clustered between 33.4 (Dow Publication IndexAgroscience) and 35.4 (DuPont). This organisation table reflects the clustering of Reuters.com 42.9companies around key commercial markets (and the publications within them): in the EU &the USA – with the USDA and European Commission appearing in the Top 10 centralitytable. Bloomberg.com 41.0To a lesser degree, if these companies from the food and agrochemical sector are theage.com.au 40.4automatically appearing whenever food price volatility is under discussion, it may wellreflect the fact that journalists/publications see them as being likely sources for possiblelonger term solutions to the wider issues (e.g. How to feed the world in 2050). This would Guardian.co.uk 39.6in most instances be seen as an opportunity by communication professionals to shape thedebate still further. commodityonline.com 39.1 However, a note of caution is needed, this point may be less true in terms of short termsolutions (where prices in commodity markets are driven by factors beyond anyone‟s Trust.org 39.1control).With floods in Australia figuring prominently in the news in January, it is no surprise to see theglobeandmail.com 38.8regional antipodean newspapers The Age and Scoop NZ in the Top 10 list. hostednews.google.com 37.3The prominence of Commodity Online is no surprise as it plays a leading role in shapingthe food price discussion. . Once again there are Antipodean publications in this top ten list,as a result of the floods in Queensland at the start of the year. The Canadian publication Scoop.co.nz 37.0Globe & Mail reflects the importance of farming in Canada, a major food commoditiesproducer and therefore a close follower of the debate on the volatility of the food price BusinessWeek.com 35.6market. © 2011 COMMETRIC 7
  8. 8. INA MAP: Organisations on ReportersNote: The Organisation to Reporter map links the participating organisations in the debate (represented by circles) to the reporters(represented by squares) who mentioned them. The size of a circle is representative of the overall number of mentions the organisationreceived, the colour shows the category into which it falls. The width of the lines is indicative of the number of articles in which the reportermentions the organisation. © 2011 COMMETRIC 8
  9. 9. INA MAP: Organisations on Reporters - Key FindingsOrganisations to Reporters Organisation IndexMonsanto‟s influence (in terms of mentions in this study) is ahead of all other Monsanto 41.3organisations. There was a high profile legal challenge by activist groups of the USDA‟sdecision to permit Monsanto‟s GM alfalfa to be grown. FAO 37.2 UN 36.7With the data for this study drawn principally from English language online sources, itmay explain the big lead Monsanto has over its competitors in terms of Centrality U.S. Department of Agriculture 34.6score. The fact is, though, with the dominant influence of US newswires and English-speaking media, Monsanto is closely associated in the press with the future and DuPont 34.0prospects of new biotechnological solutions to address the issues of increased cropyields. This study reflects that point and that is how it relates to the debate on the World Bank 33.8volatility of world commodity prices. Cargill Inc. 33.4Behind Monsanto one sees higher levels of influence on the map for FAO, the WorldBank and the UN - all of whom issued important reports that created a press impact Syngenta 32.9upon the debate surrounding the volatility of commodity. People’s Bank of China 30.7However, given the preponderance of international organisations at the top of the tableopposite, there might be a case for more communication work raising the profile of the BASF 30.3agrochemical companies as providers of the solutions the world needs to theseparticular problems.Newswires dominate with only Kevin G Hall (McClatchy), Ambrose Evans-Pritchard(The Age), Ingi Salgado (Independent Online) & Andrew Marshall (Farm Online Reporter IndexAustralia) breaking up this group. This excludes Megan Rowling, who was working for Luzi Ann Javier - Bloomberg.com 39.2Trust.org which is part of the Thomson Reuters group, with this publication coveringhumanitarian and famine relief news. Jeff Wilson - Bloomberg.com 38.7There are plethora of other interesting findings thrown up through this mapping that are Megan Rowling - Trust.org 37.0worthy of exploration: Michigan State University and University of California (via Carey Gillam - Reuters.com 32.8reporter Karin Zeitvogel) have strong links with the U.S. Department of Agriculturewhen measured against the stories for this period. Kevin G. Hall - McClatchy Newspapers 32.5Journalist Kevin G Hall had strong connectivity with the U.S. Treasury, FAO and the Ambrose Evans-Pritchard - theage.com.au 31.8U.S Department of Agriculture. Rich Miller - Bloomberg.com 31.5Fellow writer Andrew Marshall with the People’s Bank of China, FAO and the UnitedNations. Rudy Ruitenberg - Bloomberg.com 31.4Newswires guru, Rudy Ruitenberg sits strongly between FAO and the United Nations. Ingi Salgado - Iol.co.za 30.7Journalists Charlie Dunmore, Elizabeth Farrelly gave NGO activist groups a hearing Charlie Dunmore - Reuters.com 29.8on these issues – suggesting an interest in these causes on her part. Andrew Marshall - farmonline.com.au 29.8Correspondent Rich Miller seemed well connected with market analysts – all useful fora would be communications executive seeking to identify the best set of journalists totalk to. © 2011 COMMETRIC 9
  10. 10. INA MAP: Influencer on Sub-TopicsNote: The Influencer to Topic map links the participating influencers in the debate (represented by circles) to the topics (represented by squares) with which they were associated in the coverage.The size of a circle is representative of the overall number of mentions the influencer received, the color shows the category he into which he falls. The width of lines is indicative of the number ofarticles in which an influencer was associated with the topic. © 2011 COMMETRIC 10
  11. 11. INA MAP: Influencer on Sub-Topics - Key FindingsInfluencer on Sub-TopicsIn terms of Influencers, the five topics listed in this chart seem somewhat fragmented Therefore, comments by such experts can quickly set off a fire storm of press interest insuggesting there is chance for spokespeople or experts than can build a narrative across a particular area. Speaking at the AAAS event in February, the USDA‟s Ray Knightonall areas to drive debate. saw climatic incidents tipping the balance . He cited droughts that make plants vulnerable to disease, floods that cause fungal infections, changing wind currents that spreadThe map indicates that three groups dominate: Government Officials, Experts & disease spores – suggesting that a classic case was the transmission of Asian soyaInternational Organisation Representatives. Although in one area of debate: „How to Feed bean rust.the World in 2050‟ - there is an unusual cluster of Interest Group Representatives and inthe debate on International Commodity Prices one finds a batch of expert market Dana Cordell & Stuart White from the Institute for Sustainable Futures at the Universityanalysts. Though, in the latter case, this is not unsurprising. This phenomena repeats itself of Technology saw dangers in instability in the Middle East causing alarm in food securityfor International Political Leadership, where you find International Organisations and for as phosphate supplies could become in jeopardy. They spoke at the SustainableClimate Incidents (often crisis based) where one finds a preponderance of government Phosphorus Summit at Arizona State University in early February.officials. The sense of the unknown worrying the world commodity markets persists, even so, asHowever, there is a sense from these maps that political players are now actively pursuing influential Australian media (http://theland.farmonline.com.au/ commented: ―Droughtsolutions to the growing fear of a potential global food price crisis. At the centre of the across five provinces responsible for more than half Chinas 100 million tonne wheat cropmap major political figures link more than one issue: Barack Obama, Nicolas Sarkozy - could trigger a major foray into global markets - including Australia - by a nation whichand lesser ones; Caroline Spelman and Bruno le Maire who do so also. prides itself on being largely self sufficient in wheat. Shandong Province, whichThere are other figures playing a fairly central role who are more „in reach‟ in terms of the traditionally grows 20 per cent of Chinas wheat, is facing its worst drought in 200 years.potential to influence from an organisation‟s perspective; UK Chief Scientist, John In other areas the big dry is the worst in 60 years.”Beddington introduced his groundbreaking report based on the findings of some 400scientists entitled: „Global Food and Farming Futures‟ late January. Another is UCLA‟sCristina Tirado who predicted millions of environmental refugees by 2020, at the annual Topic Indexmeeting of the American Association for the Advancement of Science in February. Theimpact of her comments - and fellow panellists Ewan Todd‟s, on how food scarcity was International Commodities Market 43.1affecting world politics with likely migrant flows point to the type of topics that the globalpress are keen to report and the routes through which an organisation seeking to influenceworld opinion could make them. Political Reactions 39.9Indeed, experts (more often than enough University or Institute based) have a big role toplay in shaping what is perceived to be such an uncertain and unclear debate. "Nobodyhas really thought yet about how and if we can mitigate climate change in agriculture" International/Political Leadership 38.2admitted Dr Josef Schmidhuber, head of the global perspectives study unit at the UnitedNations Food and Agriculture Organisation (FAO), indicating that although there is a lot oftalk about averting the impact of climate change, no policies have been implemented yetto begin to address the problem. How to Feed the World in 2050 35.7Gwynne Dwyer – ―Climate change is going to make the situation worse. The modestwarming that we have experienced so far may not be the main cause of the floods, Climate Incidents 32.9droughts and violent storms that have hurt this years crops, but the rise in temperaturewill continue because we cannot find the political will to stop the greenhouse-gasemissions. A rule of thumb is that we lose about 10 per cent of world food production forevery rise of 1C in average global temperature.” © 2011 COMMETRIC 11
  12. 12. INA MAP: Reporter on Sub-TopicsNote: The Reporter to Topics map links the participating reporters in the debate (represented by squares) to the topics (representedby circles) which they mentioned in coverage. The size of a circle is representative of the overall number of mentions the topicreceived. The width of lines is indicative of the number of articles in which a topic was mentioned by the reporter. © 2011 COMMETRIC 12
  13. 13. INA MAP: Reporter on Sub-Topics- Key FindingsReporter on Sub-Topics Reporter IndexRunner up in the centrality table went to Rudy Ruitenberg, writing for Bloomberg. He Jeff Wilson - Bloomberg.com 43.7published influential commentary that was picked up by many news sources suchas:―Smaller stockpiles may mean more gains in food prices the UN says reached a recordlast month. Rising food costs contributed to protests across northern Africa and the Middle Nicholas Larkin - Bloomberg.com 43.7East, driving up inflation and spurring central banks to consider higher interest rates thatmay slow global growth.‖ Rudy Ruitenberg - Bloomberg.com 40.0Reporting on a survey of market analysts by Bloomberg at the end of March, mostinfluential writer (he was joint top – see table to the right) Jeff Wilson recorded “U.S. corn Malkhadir M. Muhumed - The Associated Press 38.2planting will expand this year to cover the second-largest area since World War II and stillfail to meet demand for feed and ethanol, driving prices to their highest in at least 34 Karin Zeitvogel - Agence France Presse 37.9years.” Fellow „leading opinion reporter‟ – joint top with Wilson - Nicholas Larkin‟s work helped Chanyaporn Chanjaroen - Bloomberg.com 37.9drive the debate with stories such as ―Food costs are at ―dangerous levels‖ after pushing44 million people into poverty since June, World Bank President Robert Zoellick said last Luzi Ann Javier - Bloomberg.com 37.6month. That adds to the more than 900 million people around the world who go hungryeach day, he said. It’s ―an incredibly difficult humanitarian story because the poorestcountries will be hit the hardest, as the average person is going to be swamped by food John Heilprin - The Associated Press 35.1inflation. The new arms race is food and energy.‖ Peter Hartcher - smh.com.au 35.1 INA maps throw up specialists with „additional influence‟ in certain areas under review –one example is Associated Press‟ Malkhadir M. Muhumed, an expert writer on Africancomment. Sandrine Rastello - Bloomberg.com 35.1Then there is AFP‟s Karin Zeitvogel, who reported on Rajiv Shah, administrator of the US Nigel Hunt - Reuters.com 35.1Agency for International Development (USAID), pleading with Congress for support on thefood aid budget as it faced the prospect of steep cuts: "This is the moment when Americamust decide if were going to engage and lead the world, actively using diplomacy, Brian Milner - CTV.ca 35.1development and defence to improve human welfare and freedom," said Shah. "Or we candecide to retract, leaving many of the poorest people, many of the most fragile countrieswithout assistance and support, and leaving other global powers like China to continue to Damian Carrington - Guardian.co.uk 35.1make tremendous inroads and investments in places like Africa, and promote alternativeeconomic and political models.― © 2011 COMMETRIC 13
  14. 14. INA MAP: Influencer on ReportersNote: The Influencer to Reporter map links the participating influencers in the debate (represented by circles) to the reporters(represented by squares) who mentioned them. The size of a circle is representative of the overall number of mentions theinfluencer received, the colour shows the category into which they fall. The width of arrows line is indicative of the number ofarticles by the reporter that mention the influencer. © 2011 COMMETRIC 14
  15. 15. INA MAP: Influencer on Reporters- Key FindingsInfluencers & Reporters For instance movers and shakers in the Top Ten for the global commodities debate in the first three months includes commodity market analysts: ―There’s no room for errorInfluencers (marked with orange circles) sit at the heart of this relationship between the anymore on farms around the world,‖ said Dan Basse, the president of AgResouce Co.,press and the debate and headed up by Robert Zoellick and Barack Obama, one politician a commodity consultant in Chicago. ―With any weather issues, we’re going to make newand one leader of a global institution all-time highs in corn and soybeans, and to a lesser degree, wheat futures.‖ Drought ruined wheat fields in Russia last year, and too much rain now has diminished suppliesWith the volatility of food prices taxing political minds there are several politicians amongst of the grain from Canada. Similarly, adverse weather has led to a drop in 2010 cornthe Top 10. These include Bolivian Finance Minister Luis Arce, and several others that all production in the U.S. and a smaller harvest of soybeans than expected, governmentown the agricultural or environmental ministry briefs in their respective governments. data show.Many well connected reporters are clustered in the central region of the map; NicholasLarkin, Sandrine Rastello, Luzi Ann Javier, Jeff Wilson, David P Goldman, Rudy Food prices are going higher because there is competition for limited arable land toRuitenberg, Kevin G Hall and others (marked with red circles). boost supplies, said Jeff Currie, global head of commodities research at Goldman Sachs Group Inc. in London. “Each time there were food price spikes in the lastThese journalists form the hub (in most cases) of a large web of inter-connections with decade, there would be rotation from one crop to the next, meaning you would go frominfluencers and comment – hence their prominence on this chart. Where a story is a bull market in one crop to the next crop each year,” Currie said. “What is different thissyndicated ,and featured more often, the line is at its thickest, the work of Karin Zeitvogel, time is that there is less capability to rotate land because strong demand is exhaustingKevin G Hall & Ingi Salgado being the most obvious example on this chart. The map total arable land.”points to links between journalists that are sourcing expert comment and the IndustryAssociation Representative they tend to ask on this topic (example Kevin G Hall). Influencer IndexRobert Zoellik‟s prominence stems directly from the influence that the World Bank Food Robert Zoellick - President, World Bank 17.1Price Index has on press comment. It also reflects the impact of the frequent World Bank‟s„Food Price Watch „ reports. His influence on the topic is enormous: ―Global food prices arerising to dangerous levels and threaten tens of millions of poor people around the world,” Barack Obama - President, U.S. 16.4said World Bank Group President Robert B. Zoellick. “The price hike is already pushingmillions of people into poverty, and putting stress on the most vulnerable, who spend more Han Changfu - Minister of Agriculture, China 15.7than half of their income on food.‖ According to the February edition of Food Price Watch,the World Bank‟s food price index rose by 15 percent between October 2010 and January Jeff Currie - Global Head of Commodities Research, 15.62011, is 29% above its level a year earlier, and is only 3% below its 2008 peak. Goldman SachsIt would be fair to say that in a debate of this size it is hard for some organisations to reach Dan Basse - President, AgResouce Co. 15.4and influence the leading world figures that are driving this debate directly. However,although their huge influence is undeniable, as this study shows, it is possible to talk to the Farha Aslam - Analyst, Stephens Inc. 15.4same journalists that cite them or to do so to the leading experts or market analysts thatadvise them. Luis Arce - Minister of Finance, Bolivia 15.3One of the advantages of INA mapping is that these connections become clearer. The map Caroline Spelman - Secretary of State for Environment, 15.0suggests that a set of journalists have clustered around these key figures in the course of Food and Rural Affairs, UKreporting this study – of course many will be reporting based on a press release, others Bruno Le Maire - Minister of Food, Agriculture andthough would have been briefed by spokespersons for this figure or may even have had 14.6 Fishing, Franceaccess directly. This means organisations and the communications teams can be usingmapping to find possible ways to talk to leading influencers directly or to discover channels Han Sung Min – Broker, Korea Exchange Bank Futures 13.9via which they can do so. Co. © 2011 COMMETRIC 15
  16. 16. INA MAP: Influencer on PublicationsNote: The Influencer to Publication map links the participating influencers in the debate (represented by circles) to the publications(represented by squares) in which they received coverage. The size of a circle is indicative of the overall number of mentions theinfluencer received, the colour shows the category he falls into. The width of the line of the number of articles in which the publicationmentions the influencer. © 2011 COMMETRIC 16
  17. 17. INA MAP: Influencer on Publications - Key Findings Influencer IndexInfluencers & Publications Caroline Spelman - Secretary of State for Environment, Food 26.5 and Rural Affairs, UK The list of most influential in terms of direct links with tracked Influencers includes Robert Zoellick - President, World Bank 24.8many that relate closely to their home or national market. However, the top fourfigures stand out for the „international‟ nature of the message. Nicolas Sarkozy - President, France 23.9Chief Science Advisor to the UK Government Professor Sir John Beddington John Beddington - Chief Scientific Adviser, UK Government 23.2presented, via his groundbreaking report based on the findings of some 400 Tina Joemat-Pettersson - Minister of Agriculture, Forestry andscientists entitled: „Global Food and Farming Futures‟ late January the notion that 22.0 Fisheries, South Africathe world was facing a “Perfect Storm” and is at significant risk of facing multipleinteracting environmental and natural resource challenges by 2030. Clive James - Chairman, ISAAA 21.7The Perfect Storm scenario is based on the interaction and cross-amplification of Barack Obama - President, U.S. 21.2emerging food, water and energy shortages, which, on reaching a critical threshold,could lead to public unrest, cross-border conflicts and mass migration. His Minister, Wen Jiabao - Premier, China 20.8Caroline Spelman was to the fore in the presentation of his findings, explaining the Bruno Le Maire - Minister of Food, Agriculture and Fishing,prominence of both in the centrality table. 20.8 FranceNicolas Sarkozy, in his role as Chair of the G20, spent the early months of 2011 Dan Basse - President, AgResouce Co. 20.7pushing a plan to regulate the international commodity markets – based in part onthe fears that advisers such as Beddington were suggesting. We want regulation ofprimary commodity financial markets, said Sarkozy, who holds the rotating 2011 Publication Indexpresidency of the Group of 20. How can you explain that we regulate money Reuters.com 27.8markets and not commodities? If we dont do anything we run the risk of food riots inthe poorest countries and a very unfavourable effect on global economic growth.The day there are food riots, what country at the G20 table will say this does not Bloomberg.com 26.4concern them? I dont see a single one.” BusinessWeek.com 22.9As Minister of State for Agriculture in South Africa, Tina Joematt-Pettersson sawfloods hitting farmers in South Africa in the Northern Cape area, and she waspushing to get biofuels higher on the political agenda – hence the presence of at Canada.com 21.8least one South African source in the Top Ten for this INA map. Guardian.co.uk 21.6 Clive James‟s ISAAA delivered a progress report on the extent and spread of GMcrops worldwide – an instant hit with the media, that extensively reported on how NEWS.com.au 21.1much land had been set to grow GMO crops since the subject matter came on thescene. bbc.co.uk 20.9There was a big set piece visit of the Chinese Premier to the US in January, whichplaced these two world leaders (Obama and Wen Jiabao) in the chart – as theage.com.au 20.9commodity prices & trade deals played a central role in their talks. timeslive.co.za 20.9 © 2011 COMMETRIC 17
  18. 18. INA MAP: Country links on ReportersNote: The Country to Reporter map links the participating influencers in the debate (represented by circles) to the topics (represented by squares) with which they wereassociated in the coverage. The size of a circle is representative of the overall number of mentions the influencer received, the color shows the category into which it falls.The width of lines is indicative of the number of articles in which an influencer was associated with the topic. © 2011 COMMETRIC 18
  19. 19. INA MAP: Country links on Reporters - Key FindingsCountries & Reporters Top 4 journalists – example stories Jeff Wilson – Russia, Canada, Argentina & ChinaThe Top Six countries in the Centrality Maps are all major „producer‟ countries: USA,China, India, Australia, Brazil and Russia. Common to all are climate change impact • "Theres no room for error anymore" on farms around the world, said Dan Basse,incidents, uncertainty over production levels, political worry over subsidies (ethanol in USA) the president of AgResouce. "With any weather issues, were going to make new all-or concern over food security (Indian Parliament is shaping a food bill to this effect). time highs in corn and soybeans, and to a lesser degree, wheat futures.― (Seattle Times: 12/01/11).This period saw further growth in the Chinese-USA relationship with the Chinese PM, Hu Luzi Ann Javier – Middle East, Singapore, Haiti, Europe, Egypt, Russia, Canada &Jintao, visiting Washington in January, and trade deals being done on the back of this visit. USAIt also saw initial reports of the worst drought in China in 60 years, which is threatening thenation‟s wheat crop and leading many to worry about the potential effect on already high • Global warming may help lift the prices of corn, wheat and rice by at least two-global food prices. With so many mouths to feed and urbanisation meaning less land is thirds by 2050, a study by the International Food Policy Research Institute showed inproducing, a jump in demand for staple crops from China or, even India for that matter, December. ―There is an increasing likelihood of a food crisis globally due to climatewould shatter the careful balance between food supply and demand. Hence the worry change,‖ South Korean President Lee Myung Bak told his secretaries on Feb. 7,reflected in the markets. according to a statement. (Bloomberg: 15/02/11). Rudy Ruitenberg - Egypt, China, RussiaNext in the table came Europe, whose principal concern as a group, at the start of the • ―Importers are paying 20 percent more for a metric ton of wheat on the Paris NYSEyear, was fear of sharp rises in food prices could exacerbate Arab unrest, which was Euronext bourse than on the Chicago Board of Trade because they need cargoesspreading in the Middle East. Fear of environmentally inspired (lack of food) mass now,‖ said Gautier Le Molgat, a consultant at Paris-based Agritel. (Business Week:migrations northwards into the European continent alarmed European leaders. This 09/02/11).accounted for Egypt and Tunisia‟s place in the Top Ten most discussed countries. Makingup the numbers at the top table were Argentina and Canada, both suffering from similar Kevin G Hall – Asia & Middle Eastissues to the top six: often climate driven and inevitably connected to failure or far lower • Ed Yardeni joked that Fed Chair Ben Bernanke should be added to a list ofcrop yields due to poor weather. revolutionaries, since his quantitative easing policy has provoked unrest and change in the developing world."Since he first indicated his support for such a revolutionaryGiven the trans-national nature of the issue of commodity prices, a lot of valuable comment monetary change last August, the prices of corn, soybeans and wheat have risenis wrapped up in stories on pricing movement, where expert traders offer views on the 53%, 37% and 24.4%," he noted. "The price of crude oil rose 19.8% over this periodcauses of sharp market fluctuation. Therefore, top journalists (those featuring in the Top 10 from $75.17 to $90.09. Soaring food and fuel prices are compounding angercentrality tables that wrote more copy on the issue or who had stronger specialism in this attributable to widespread unemployment in the countries currently experiencingarea) reflected this in their stories. They were also mostly from the Newswire background – riots.‖ (Star Phoenix: 31/01/11).providing communication specialists with a group of influential writers that they can easilytrack or target in placing messaging of their own. • Other names featuring on the Top Ten most important journalists lists included: John Heilprin (Associated Press); Megan Rowling (www.trust.org.com); Tony Dreibus (www.bloomberg.com); Carry Gillam (www.reuters.com) and Edith Lederer (www.ap.org). The work of this group of ten reflected the global nature of the food price volatility issue that they were collectively covering, with some specialising in aid related areas of the food shortage debate (Rowling) and others being more conduits for commentary from the expert analyst community (Gillam). © 2011 COMMETRIC 19
  20. 20. INA MAP: Country links on PublicationsNote: The Country to Publication map links the participating reporters in the debate (represented by squares) tothe topics (represented by circles) which they mentioned in coverage. The size of a circle is representative of theoverall number of mentions the topic received. The width of lines is indicative of the number of articles in which © 2011 COMMETRICa topic was mentioned by the reporter. 20
  21. 21. INA MAP: Country links on Publications - Key FindingsCountries & Publications Geography Index Closer investigation of the stories underpinning the USA‟s position at the top of thecentrality table lists brings out the frequently cited issue of timing, though it is clear it is not USA 56.2just a single issue such as quantitative easing, as some pundits argue. Although the policywas announced in August 2010, the U.S Federal Bank didnt begin purchasing bonds until China 48.2November and commodity prices were rising before then. "There are a lot of differentsticks in the fire here," said Jerry Gidel, the president of Midland Research Inc. Whathappens to the price of one food crop affects others, he added, because "it is a human- India 42.2consumption commodity, and things can get emotional, and they do get emotional. Andright now, were kind of in one of those periods.“Then there is China, not too far behind as a potential cause of market uncertainty – Egypt 41.2according to the results of this study. According to the New York Times: ―China has beenessentially self-sufficient in grain for decades, for national security reasons. Any move by Europe 40.7China to import large quantities of food in response to the drought could drive internationalprices even higher than the record levels recently reached”. Other highlights of the period included the Indonesian President calling for urgent action Australia 40.7on food security measures such as controlling commodity price speculation at the G20 atthe end of January. Middle East 40.2There were also some interesting country-focused special reports that reflected tiesbetween publications and countries – The Economist ran a „Special Report on Feeding theWorld‟ – at the end of February. It strongly links into China, Mexico, India & Russia – Russia 39.8suggesting these were among its strongest areas of focus. With this map showing a slightly second level degree of granularity, Newswires still figure Brazil 39.3strongly, but there are other stand out national news sources: www.bbc.co.uk andwww.guardian.co.uk another. The more frequently cited set of national publications wereAustralian – a country which had seen devastating floods in Queensland and droughts in Indonesia 39.3the west of the country. So noting the following: www.theage.com.au,www.farmonline.com.au, www.dailytelegraph.com.au and www.ninemsn.com.au amongstthe Top ten most cited was no surprise. Tunisia 39.3Similarly, as a major grain and wheat producer seeing www.theglobeandmail.com fromCanada, www.businessweek.com and www.sfgate.com from the USA were very much in Argentina 39.3line with expectations.•, © 2011 COMMETRIC 21
  22. 22. APPENDICES © 2011 COMMETRIC 22
  23. 23. Key Influencers Influential OrganisationsWhich type of individuals shape the debate• In terms of Influencer Roles Government Officials shaped the debate with 37% of the mentions.•Other forms of decision-making groups make up 11% of the mentions. These include: Politicians (7%), Government Agency Representatives (3%) and EU Officials (1%)• Experts/Academics have a strong 17% of all comment, outstripping Corporate or Market Analysts – that have 7% & 8% shares, respectively• Notable is the low share that people belonging to Interest Groups have in this discussion with only 8% of all mentionsWhich organisations shape the debate• Interest Groups (15%) as a „cohesive group‟ have more weight than they do as individuals in terms of potential influence in the commodity prices discussion. There are nocharismatic figureheads commanding media attention.• Companies (25%) and International Organisations (26%) dominate, with more than half of all mentions.• Just behind these two opinion forming groups sit Governments (10%) and Universities/Research Centres (9%)• Market Analysis comment is small (3%) in relative terms, but punches above its weight in terms of Influencer roles (see chart on far left showing 8%) © 2011 COMMETRIC 23
  24. 24. Which influencers or organisations drive this debate?Which organisations influenced most?• The agrochemical industry has a strong presence in the debate on food prices & food security, with its prominence in the table reasonably reflecting its position or strength in thedebate (find companies: 1st, 5th, 7th, 8th, 12th, 13th & 19th).• However, four out of the top six places are held by institutions not companies (FAO, UN, USDA & AAAS). These bodies are driving the debate more than the food industry, leaningheavily on science based reports & on public comments at meetings or press conferences.• As science-based findings often originate from universities commissioned to carry this work out, this explains why there are also four Universities (in the shape of advisers or fieldexperts).• Only one NGO – Friends of the Earth, who produced a report highlighting the cost of segregating GM crops around the world, made this list. In this report it argued that GM costswould push food prices even higher. © 2011 COMMETRIC 24
  25. 25. Top reporters Top publications © 2011 COMMETRIC 25