there can be two main explanations for this development : a surge on speculative trading or a surge in physical trade. in the former case, although there have been some improvements in financial markets, activity on non - commercial commodity trade is still bellow last year levels, and the causal relationship between speculative trading and prices is under hard scrutiny. in this regard, there is a clear concern of us authorities that are set to strengthen the regulation on commodities markets, and at the same time are going to disclose more detailed information on non commercial operations. on the fundamentals of these markets, there is much more information to justify an upswing on prices : on the supply side there is a lower harvest of some grains and oilseeds. the stagnation of productive investment ( because of reduced spending in fertilizers, seeds and equipment ) due to the crisis, in a context of low grain stocks, makes the markets vulnerable to any weather shocks in the 2009 / 10 season, something that starts to be reflected in prices. for example, my country consumed 30 % less fertilizer during 2008, while in the first quarter of 2009 imports showed a decline of 90 % annually. this lower investment is particularly relevant for countries in the southern cone because it would affect the productivity of the soils, which were damaged by the drought of the last season ( even with favorable weather, it is likely that productivity will be lower than that of recent years ). on the demand side, there were new increases on biofuels targets and a broad re - stocking process, taking advantage of lower prices. much of this is reflected on a surge on vessels use with a clear impact on freight rates, which jumped nearly 50 % last june. in addition, with a focus on ensuring the future supply of food and commodities and on investment, countries like china and saudi arabia, among others are making progress in the purchase of arable land in developing regions like africa and in our region. this factor shows a renewed investor ’ s interest in the development of agriculture. the first reason that explains the proliferating acquisition of land is linked to food security concerns. several countries invest in the long run to feed their people at affordable prices. the second reason is more related to financial gains. faced with the collapse and prospects for future increases in prices of food and land, institutional investors are returning to invest in the agricultural sector. it is crystal clear right now that the way out of this crisis for emerging markets will be critical for the future growth

in the world. however, this is a result of a lot of temporary factors base effect, temporary measures on electricity and a variety of other measures - which suggest that going forward inflation is gradually going to come back up again. overall, inflation should still reside within our target range for the year. hence, the broad contours of the economy are fairly encouraging. even with all the uncertainties out there, overall recovery in thailand has remained intact. on the global front, there are rising concerns about a slowdown in china, but concerns over a 1 / 5 bis - central bankers'speeches slowdown or risk of a recession in the us seem to have gone down. so, there are positive economic surprises to counter negative ones. domestically, the big question is what is going to happen with the government. i believe some of the concerns over government spending may not be accurate. the bot's forecasts have already priced in a delay in government budget disbursement of about 3 - 6 months. the fact is that, with our budget, the fixed expenses still go out the door but what will not be spent is the discretionary investment budget, which is not huge in size. so, the impact on this year's headline gdp from any delay in fiscal spending is not large. the impact, if it comes, will come next year. overall, the picture is broadly intact in terms of economic recovery. this is positive news that we should take away. part 2 : policy responses - monetary and financial policies policy is a balancing act. we must try to manage the trade - offs properly and be flexible and agile in adjusting our policies in response to the economic circumstances that have changed. on monetary policy when we started our policy normalization process last year, the economy was recovering much more slowly than the region because it was highly dependent on tourism. our policy objective at that time was to ensure a smooth takeoff. we did not want to do anything to interrupt the recovery process. hence, our policy response was to undertake a'gradual and measured'interest rate normalization and we increased the policy rate from the low level of 0. 50 % by 25 bps each meeting1. this was different from what other central banks were doing, and we received a fair amount of criticism - aren't you in danger of being behind the curve? aren't you in danger of inflation not being transitory? no. we did not think so. we genuinely felt that the situation in thailand