As you shop for Thanksgiving dinner this year, you may long for the good old days when food was cheaper. This isn’t just your nostalgia speaking. Over the past decade, food prices have increased at a very fast clip. According to the U.N.’s Food and Agriculture Organization, the global food price index has increased by 125 percent since 2000. To understand why, consider the seemingly intractable prices of global commodities markets—your standard agricultural goods like coffee, sugar, and wheat, or resources like crude oil and coal that are used to produce or transport those goods. Not only do these complex commodities markets determine the cost of what we eat, but their high prices can fuel the kind of social unrest that in some countries has toppled governments.
These markets are as volatile and hard to forecast as the effects of their swings are contradictory. Commodities are both the origin of major fortunes as well as the reason behind financial crashes. Their gyrations also drive major shifts in geopolitical power—they can boost the influence of some countries while weakening others. For example, during the commodities boom that took place between 2000 and 2010, exporters of soy, iron, cotton, oil, copper, wheat, petroleum, wood, and other basic goods did exceedingly well. Countries from Brazil to Malaysia used the windfall to improve living standards for millions of their poorest citizens. According to the World Bank, the size of the Latin American middle class grew by 50 percent—from 103 million in 2003 to 152 million in 2009. Since then, despite the global recession, the region’s middle class has continued to grow—to the point where, the World Bank reckons, its members are currently more numerous than the poor for the first time in history.