Responding to Higher and More Volatile World Food Prices
Following the world food price spike in 2008 and again in 2011, there has been increased attention on better understanding the drivers of food prices, their impacts on the poor, and policy response options. This paper provides a simple model that c...
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| Format: | Commodities Study |
| Language: | English en_US |
| Published: |
Washington, DC
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2012/01/16355176/responding-higher-more-volatile-world-food-prices http://hdl.handle.net/10986/12950 |
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okr-10986-12950 |
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oai_dc |
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Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
AGGREGATE CONSUMPTION AGGREGATE DEMAND AGRIBUSINESS AGRIBUSINESS LOGISTICS AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL COMMODITY MARKETS AGRICULTURAL GROWTH AGRICULTURAL MARKET AGRICULTURAL MARKETS AGRICULTURAL OUTLOOK AGRICULTURAL POLICY AGRICULTURAL PRACTICES AGRICULTURAL PRICE AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTIVITY AGRICULTURAL PRODUCTS AGRICULTURAL RESEARCH AGRICULTURAL RESEARCH CENTERS AGRICULTURAL SECTORS AGRICULTURE AGRICULTURE ORGANIZATION ANIMAL FEEDS ANIMAL PRODUCTS ARBITRAGE AVERAGE PRICE AVERAGE PRICES BANANAS BEEF BEVERAGES CAPITAL ACCUMULATION CEREAL IMPORTS CEREAL PRICE CEREALS COCOA COMMODITY EXCHANGES COMMODITY PRICE COMMODITY PRICES COMPETITIVE PRICES CONSUMER PRICE CONSUMER PRICE INDEX CORN COTTON CROP PRODUCTION CROP ROTATIONS CROP YIELDS CULTIVATED AREAS DAIRY DAIRY PRODUCTS DEMAND CURVE DEMAND CURVES DEMAND FOR FOOD DEMAND GROWTH DEMOGRAPHIC DEVELOPING COUNTRIES DOMESTIC ECONOMIES DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DRYING ECONOMIC CRISIS EDIBLE OILS ENERGY PRICES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORT SECTORS EXTENSION SERVICES FARM FARM INCOMES FARM PRODUCTION FARM PRODUCTIVITY FARMERS FEED FINANCIAL CRISES FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL TRANSACTIONS FOOD ACCESS FOOD CONSUMPTION FOOD CROP FOOD CROPS FOOD DEMAND FOOD EXPORT FOOD EXPORTS FOOD FOR WORK FOOD GRAINS FOOD INSECURITY FOOD MARKETS FOOD PREFERENCES FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD PRODUCTION FOOD PRODUCTS FOOD RESERVES FOOD SAFETY FOOD SECURITY FOOD SHORTAGES FOOD STAPLES FOOD STOCKS FOOD SUPPLIES FOOD SUPPLY FOOD SUPPLY GROWTH FOOD TRANSFERS FUTURE PRICES FUTURES FUTURES CONTRACTS FUTURES POSITION GEOGRAPHIC DISTRIBUTION GLOBAL EXPORTS GLOBAL FOOD SECURITY GRAIN GRAIN PRICES GRAIN PRODUCTION GRAIN RESERVES GRAINS GROSS DOMESTIC PRODUCT GROUNDNUT GROUNDNUT OIL GROWTH RATE GROWTH RATES HOUSEHOLDS HUMAN CAPITAL ICE IMPORT TARIFFS INCOME INPUT PRICES INTERNATIONAL AGRICULTURAL RESEARCH INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTORIES INVESTMENT CLIMATE LIBERALIZATION LIVESTOCK LOCAL CURRENCIES LOGISTICAL SUPPORT LOW-INCOME COUNTRIES MAIZE MARKET ASSESSMENT MARKET DEVELOPMENTS MARKET EQUILIBRIUM MARKET EXPECTATIONS MARKET INFORMATION MARKET INFRASTRUCTURE MARKET INTEGRATION MARKET PRICE MARKET PRICES MARKET TRANSPARENCY MARKETING MARKETING SYSTEMS MEAL MIDDLE-INCOME COUNTRIES MILLING MOBILIZATION MONETARY POLICY MONOCULTURE NATURAL RUBBER OPTION PRICES ORANGES OUTPUT OUTPUTS PACKAGING PALM OIL PIG MEAT PORK POULTRY PRICE BEHAVIOR PRICE CHANGE PRICE CHANGES PRICE DISCOVERY PRICE ELASTICITY OF DEMAND PRICE FLUCTUATIONS PRICE INCENTIVES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INSTABILITY PRICE LEVELS PRICE POLICY PRICE RISK PRICE RISKS PRICE SPREAD PRICE STABILIZATION PRICE UNCERTAINTY PRICE VOLATILITY PRODUCER ORGANIZATION PRODUCER ORGANIZATIONS PROPERTY RIGHTS PROTEINS PUBLIC DEBT PURCHASING PURCHASING POWER RAW MATERIALS REDUCTIONS IN TARIFFS RENEWABLE ENERGY RETAIL RICE RICE PRICES RISK MANAGEMENT RURAL AREAS SAFETY NET SALE SALES SAVINGS SECURITY RISKS SOCIAL PROTECTION SOYBEAN SOYBEAN MEAL SOYBEANS SPOT MARKET SPOT PRICES SPREAD STOCK MANAGEMENT SUBSTITUTE SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGARCANE SUPPLIER SUPPLIERS SUPPLY CHAIN SUPPLY CHAINS SUPPLY CURVE SUPPLY SHOCK SURPLUS TAX TEA TECHNOLOGICAL CHANGE TRANSACTION VOLUME WAREHOUSE WFP WHEAT WORLD FOOD SUPPLY WORLD MARKET WORLD MARKET PRICES WORLD MARKETS WORLD PRICE WORLD PRICES WORLD RICE WORLD TRADE WORLD TRADE ORGANIZATION |
| spellingShingle |
AGGREGATE CONSUMPTION AGGREGATE DEMAND AGRIBUSINESS AGRIBUSINESS LOGISTICS AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL COMMODITY MARKETS AGRICULTURAL GROWTH AGRICULTURAL MARKET AGRICULTURAL MARKETS AGRICULTURAL OUTLOOK AGRICULTURAL POLICY AGRICULTURAL PRACTICES AGRICULTURAL PRICE AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTIVITY AGRICULTURAL PRODUCTS AGRICULTURAL RESEARCH AGRICULTURAL RESEARCH CENTERS AGRICULTURAL SECTORS AGRICULTURE AGRICULTURE ORGANIZATION ANIMAL FEEDS ANIMAL PRODUCTS ARBITRAGE AVERAGE PRICE AVERAGE PRICES BANANAS BEEF BEVERAGES CAPITAL ACCUMULATION CEREAL IMPORTS CEREAL PRICE CEREALS COCOA COMMODITY EXCHANGES COMMODITY PRICE COMMODITY PRICES COMPETITIVE PRICES CONSUMER PRICE CONSUMER PRICE INDEX CORN COTTON CROP PRODUCTION CROP ROTATIONS CROP YIELDS CULTIVATED AREAS DAIRY DAIRY PRODUCTS DEMAND CURVE DEMAND CURVES DEMAND FOR FOOD DEMAND GROWTH DEMOGRAPHIC DEVELOPING COUNTRIES DOMESTIC ECONOMIES DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DRYING ECONOMIC CRISIS EDIBLE OILS ENERGY PRICES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORT SECTORS EXTENSION SERVICES FARM FARM INCOMES FARM PRODUCTION FARM PRODUCTIVITY FARMERS FEED FINANCIAL CRISES FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL TRANSACTIONS FOOD ACCESS FOOD CONSUMPTION FOOD CROP FOOD CROPS FOOD DEMAND FOOD EXPORT FOOD EXPORTS FOOD FOR WORK FOOD GRAINS FOOD INSECURITY FOOD MARKETS FOOD PREFERENCES FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD PRODUCTION FOOD PRODUCTS FOOD RESERVES FOOD SAFETY FOOD SECURITY FOOD SHORTAGES FOOD STAPLES FOOD STOCKS FOOD SUPPLIES FOOD SUPPLY FOOD SUPPLY GROWTH FOOD TRANSFERS FUTURE PRICES FUTURES FUTURES CONTRACTS FUTURES POSITION GEOGRAPHIC DISTRIBUTION GLOBAL EXPORTS GLOBAL FOOD SECURITY GRAIN GRAIN PRICES GRAIN PRODUCTION GRAIN RESERVES GRAINS GROSS DOMESTIC PRODUCT GROUNDNUT GROUNDNUT OIL GROWTH RATE GROWTH RATES HOUSEHOLDS HUMAN CAPITAL ICE IMPORT TARIFFS INCOME INPUT PRICES INTERNATIONAL AGRICULTURAL RESEARCH INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTORIES INVESTMENT CLIMATE LIBERALIZATION LIVESTOCK LOCAL CURRENCIES LOGISTICAL SUPPORT LOW-INCOME COUNTRIES MAIZE MARKET ASSESSMENT MARKET DEVELOPMENTS MARKET EQUILIBRIUM MARKET EXPECTATIONS MARKET INFORMATION MARKET INFRASTRUCTURE MARKET INTEGRATION MARKET PRICE MARKET PRICES MARKET TRANSPARENCY MARKETING MARKETING SYSTEMS MEAL MIDDLE-INCOME COUNTRIES MILLING MOBILIZATION MONETARY POLICY MONOCULTURE NATURAL RUBBER OPTION PRICES ORANGES OUTPUT OUTPUTS PACKAGING PALM OIL PIG MEAT PORK POULTRY PRICE BEHAVIOR PRICE CHANGE PRICE CHANGES PRICE DISCOVERY PRICE ELASTICITY OF DEMAND PRICE FLUCTUATIONS PRICE INCENTIVES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INSTABILITY PRICE LEVELS PRICE POLICY PRICE RISK PRICE RISKS PRICE SPREAD PRICE STABILIZATION PRICE UNCERTAINTY PRICE VOLATILITY PRODUCER ORGANIZATION PRODUCER ORGANIZATIONS PROPERTY RIGHTS PROTEINS PUBLIC DEBT PURCHASING PURCHASING POWER RAW MATERIALS REDUCTIONS IN TARIFFS RENEWABLE ENERGY RETAIL RICE RICE PRICES RISK MANAGEMENT RURAL AREAS SAFETY NET SALE SALES SAVINGS SECURITY RISKS SOCIAL PROTECTION SOYBEAN SOYBEAN MEAL SOYBEANS SPOT MARKET SPOT PRICES SPREAD STOCK MANAGEMENT SUBSTITUTE SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGARCANE SUPPLIER SUPPLIERS SUPPLY CHAIN SUPPLY CHAINS SUPPLY CURVE SUPPLY SHOCK SURPLUS TAX TEA TECHNOLOGICAL CHANGE TRANSACTION VOLUME WAREHOUSE WFP WHEAT WORLD FOOD SUPPLY WORLD MARKET WORLD MARKET PRICES WORLD MARKETS WORLD PRICE WORLD PRICES WORLD RICE WORLD TRADE WORLD TRADE ORGANIZATION World Bank Responding to Higher and More Volatile World Food Prices |
| description |
Following the world food price spike in
2008 and again in 2011, there has been increased attention
on better understanding the drivers of food prices, their
impacts on the poor, and policy response options. This paper
provides a simple model that closely simulates actual
historical food price behavior around which the analysis of
the drivers of food price levels, volatility, and the
associated response options is derived. Future food prices
are likely to remain higher than pre-2007 levels and recent
price uncertainty is likely to continue for the foreseeable
future. Accelerated use of food crops for industrial
purposes (biofuels) continues to offset the slowing
population growth effect on food demand. World food stocks
remain at relatively low levels where the likelihood of
price spikes is higher. Production gains may be harder to
achieve in the future than in the past, with more limited
space for area expansion, declining yield growth, and
increases in weather variability. Suggested responses to
reduce average food price levels are to (i) raise food crop
yields, and their resilience, as the single most important
action needed for an enduring solution to global food
security; (ii) improve the rural investment climate to
induce a private sector supply response; (iii) facilitate
land markets to expand planted food crop areas and
strengthen property rights to improve the use of existing
cropped areas; (iv) better use price risk management tools;
and (v) increase the responsiveness of the food system to
price increases through better integrating markets to ensure
world price signals reach more producers to induce a supply
response. To reduce world food price volatility, suggested
responses are to: (1) develop weather-tolerant crop
varieties to reduce food production shocks; (2) improve
management of food-grain stock purchases and releases to
reduce, rather than amplify, local and world food price
volatility; (3) shift to market-based biofuels policies
(make biofuels mandates more flexible); (4) open trade
across all markets to diversify short-term production shocks
dissipating the associated price effects; and (5) improve
market transparency to reduce market uncertainty and the
associated large price corrections following revisions to
market information (production, stocks, and trade).
Suggested measures to reduce the negative impact of price
shocks on food security are: (a) reduce taxes and tariffs
(in some cases) to lower domestic prices, (b) short-term
food and cash transfers to preserve purchasing power, and
(c) support for agricultural production to try to prevent a
next season shortfall that could add to local price increases. |
| format |
Economic & Sector Work :: Commodities Study |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Responding to Higher and More Volatile World Food Prices |
| title_short |
Responding to Higher and More Volatile World Food Prices |
| title_full |
Responding to Higher and More Volatile World Food Prices |
| title_fullStr |
Responding to Higher and More Volatile World Food Prices |
| title_full_unstemmed |
Responding to Higher and More Volatile World Food Prices |
| title_sort |
responding to higher and more volatile world food prices |
| publisher |
Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2012/01/16355176/responding-higher-more-volatile-world-food-prices http://hdl.handle.net/10986/12950 |
| _version_ |
1764420756361445376 |
| spelling |
okr-10986-129502021-04-23T14:03:02Z Responding to Higher and More Volatile World Food Prices World Bank AGGREGATE CONSUMPTION AGGREGATE DEMAND AGRIBUSINESS AGRIBUSINESS LOGISTICS AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL COMMODITY MARKETS AGRICULTURAL GROWTH AGRICULTURAL MARKET AGRICULTURAL MARKETS AGRICULTURAL OUTLOOK AGRICULTURAL POLICY AGRICULTURAL PRACTICES AGRICULTURAL PRICE AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTIVITY AGRICULTURAL PRODUCTS AGRICULTURAL RESEARCH AGRICULTURAL RESEARCH CENTERS AGRICULTURAL SECTORS AGRICULTURE AGRICULTURE ORGANIZATION ANIMAL FEEDS ANIMAL PRODUCTS ARBITRAGE AVERAGE PRICE AVERAGE PRICES BANANAS BEEF BEVERAGES CAPITAL ACCUMULATION CEREAL IMPORTS CEREAL PRICE CEREALS COCOA COMMODITY EXCHANGES COMMODITY PRICE COMMODITY PRICES COMPETITIVE PRICES CONSUMER PRICE CONSUMER PRICE INDEX CORN COTTON CROP PRODUCTION CROP ROTATIONS CROP YIELDS CULTIVATED AREAS DAIRY DAIRY PRODUCTS DEMAND CURVE DEMAND CURVES DEMAND FOR FOOD DEMAND GROWTH DEMOGRAPHIC DEVELOPING COUNTRIES DOMESTIC ECONOMIES DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DRYING ECONOMIC CRISIS EDIBLE OILS ENERGY PRICES EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORT SECTORS EXTENSION SERVICES FARM FARM INCOMES FARM PRODUCTION FARM PRODUCTIVITY FARMERS FEED FINANCIAL CRISES FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FINANCIAL TRANSACTIONS FOOD ACCESS FOOD CONSUMPTION FOOD CROP FOOD CROPS FOOD DEMAND FOOD EXPORT FOOD EXPORTS FOOD FOR WORK FOOD GRAINS FOOD INSECURITY FOOD MARKETS FOOD PREFERENCES FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD PRODUCTION FOOD PRODUCTS FOOD RESERVES FOOD SAFETY FOOD SECURITY FOOD SHORTAGES FOOD STAPLES FOOD STOCKS FOOD SUPPLIES FOOD SUPPLY FOOD SUPPLY GROWTH FOOD TRANSFERS FUTURE PRICES FUTURES FUTURES CONTRACTS FUTURES POSITION GEOGRAPHIC DISTRIBUTION GLOBAL EXPORTS GLOBAL FOOD SECURITY GRAIN GRAIN PRICES GRAIN PRODUCTION GRAIN RESERVES GRAINS GROSS DOMESTIC PRODUCT GROUNDNUT GROUNDNUT OIL GROWTH RATE GROWTH RATES HOUSEHOLDS HUMAN CAPITAL ICE IMPORT TARIFFS INCOME INPUT PRICES INTERNATIONAL AGRICULTURAL RESEARCH INTERNATIONAL MARKETS INTERNATIONAL TRADE INVENTORIES INVESTMENT CLIMATE LIBERALIZATION LIVESTOCK LOCAL CURRENCIES LOGISTICAL SUPPORT LOW-INCOME COUNTRIES MAIZE MARKET ASSESSMENT MARKET DEVELOPMENTS MARKET EQUILIBRIUM MARKET EXPECTATIONS MARKET INFORMATION MARKET INFRASTRUCTURE MARKET INTEGRATION MARKET PRICE MARKET PRICES MARKET TRANSPARENCY MARKETING MARKETING SYSTEMS MEAL MIDDLE-INCOME COUNTRIES MILLING MOBILIZATION MONETARY POLICY MONOCULTURE NATURAL RUBBER OPTION PRICES ORANGES OUTPUT OUTPUTS PACKAGING PALM OIL PIG MEAT PORK POULTRY PRICE BEHAVIOR PRICE CHANGE PRICE CHANGES PRICE DISCOVERY PRICE ELASTICITY OF DEMAND PRICE FLUCTUATIONS PRICE INCENTIVES PRICE INCREASE PRICE INCREASES PRICE INDEX PRICE INSTABILITY PRICE LEVELS PRICE POLICY PRICE RISK PRICE RISKS PRICE SPREAD PRICE STABILIZATION PRICE UNCERTAINTY PRICE VOLATILITY PRODUCER ORGANIZATION PRODUCER ORGANIZATIONS PROPERTY RIGHTS PROTEINS PUBLIC DEBT PURCHASING PURCHASING POWER RAW MATERIALS REDUCTIONS IN TARIFFS RENEWABLE ENERGY RETAIL RICE RICE PRICES RISK MANAGEMENT RURAL AREAS SAFETY NET SALE SALES SAVINGS SECURITY RISKS SOCIAL PROTECTION SOYBEAN SOYBEAN MEAL SOYBEANS SPOT MARKET SPOT PRICES SPREAD STOCK MANAGEMENT SUBSTITUTE SUBSTITUTION SUBSTITUTION EFFECT SUGAR SUGARCANE SUPPLIER SUPPLIERS SUPPLY CHAIN SUPPLY CHAINS SUPPLY CURVE SUPPLY SHOCK SURPLUS TAX TEA TECHNOLOGICAL CHANGE TRANSACTION VOLUME WAREHOUSE WFP WHEAT WORLD FOOD SUPPLY WORLD MARKET WORLD MARKET PRICES WORLD MARKETS WORLD PRICE WORLD PRICES WORLD RICE WORLD TRADE WORLD TRADE ORGANIZATION Following the world food price spike in 2008 and again in 2011, there has been increased attention on better understanding the drivers of food prices, their impacts on the poor, and policy response options. This paper provides a simple model that closely simulates actual historical food price behavior around which the analysis of the drivers of food price levels, volatility, and the associated response options is derived. Future food prices are likely to remain higher than pre-2007 levels and recent price uncertainty is likely to continue for the foreseeable future. Accelerated use of food crops for industrial purposes (biofuels) continues to offset the slowing population growth effect on food demand. World food stocks remain at relatively low levels where the likelihood of price spikes is higher. Production gains may be harder to achieve in the future than in the past, with more limited space for area expansion, declining yield growth, and increases in weather variability. Suggested responses to reduce average food price levels are to (i) raise food crop yields, and their resilience, as the single most important action needed for an enduring solution to global food security; (ii) improve the rural investment climate to induce a private sector supply response; (iii) facilitate land markets to expand planted food crop areas and strengthen property rights to improve the use of existing cropped areas; (iv) better use price risk management tools; and (v) increase the responsiveness of the food system to price increases through better integrating markets to ensure world price signals reach more producers to induce a supply response. To reduce world food price volatility, suggested responses are to: (1) develop weather-tolerant crop varieties to reduce food production shocks; (2) improve management of food-grain stock purchases and releases to reduce, rather than amplify, local and world food price volatility; (3) shift to market-based biofuels policies (make biofuels mandates more flexible); (4) open trade across all markets to diversify short-term production shocks dissipating the associated price effects; and (5) improve market transparency to reduce market uncertainty and the associated large price corrections following revisions to market information (production, stocks, and trade). Suggested measures to reduce the negative impact of price shocks on food security are: (a) reduce taxes and tariffs (in some cases) to lower domestic prices, (b) short-term food and cash transfers to preserve purchasing power, and (c) support for agricultural production to try to prevent a next season shortfall that could add to local price increases. 2013-03-26T19:09:20Z 2013-03-26T19:09:20Z 2012-05 http://documents.worldbank.org/curated/en/2012/01/16355176/responding-higher-more-volatile-world-food-prices http://hdl.handle.net/10986/12950 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank Washington, DC Economic & Sector Work :: Commodities Study Economic & Sector Work |