Commodity prices, trade, and poverty in Uruguay

► In this paper, we analyze the effects of the 2006-2008 increase in commodity prices in Uruguay. ► We find a positive general effect on the Uruguayan economy. ► However, the benefits do not necessarily spill over to all sectors of the society. ► The increase in food prices affects the already poor population, who become even poorer. ► This fact highlights the need for policies to mitigate the negative effects of price shocks.