PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

Increased global oil consumption was facilitated by
increased supply from non-OPEC producing countries.
However, oil prices have been constrained by high levels
of inventory and production restraints. OPEC, which
accounts for 40 per cent of global oil supply, maintained
its production limitations enforced in 2008. Also
moderating the level of oil price increase was the steady
increase in non-OPEC oil production, from countries
such as Canada, Kazakhstan and Brazil 13 .
In the first half of the calendar year 2010, grain prices
declined in response to sufficient global supplies, amidst high levels of inventory and
increased global production. This trend was subsequently reversed as market conditions
tightened within an environment of supply side threats resulting from the impact of
severe drought conditions on output levels of wheat producing countries, such as Canada,
and Eastern Europe. In Russia, forest wildfires
destroyed a significant percentage of the crop, leading
the authorities to impose a ban on the export of grains
until, 2011. Consequent on these developments wheat
prices spiked to a two-year high. Subsequently, demand
shifted to other grains such as corn, resulting in an
increase in the price of these commodities. Wheat
prices ended the year at US$0.085/bushel (an increase
of 56.7 per cent), corn prices ended at US$5.60/bushel
(an increase of 34.6 per cent). However, rice prices
ended lower, at US$0.1399/bushel, a 5.8 per cent
decrease relative to the previous year.
There was also a general increase in metal prices. The price of aluminium stood at
US$2461/tonne, 11.5 per cent greater than the price quoted at the beginning of the year.
The upward movement in these prices reflected improved industrial production and the
associated increased demand for metals.
2.2 Domestic Macroeconomic Performance
Macroeconomic Policy
Central Government budget for fiscal year (FY) 2010/11 was developed within the
context of the Government of Jamaica’s Medium-Term Economic Programme which had
facilitated the International Monetary Fund (IMF) approval of a Stand-By Arrangement
(SBA) for Jamaica in February 2010. Revised Targets detailing Government's
Memorandum of Economic and Financial Policies which accompanied the Letter of
Intent to the IMF are indicated in Table 5.4.
13 Non-OPEC oil supply averaged 52.8 mbd in 2010, up 1.5 mbd relative to 2009.
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