Long-Term Drivers of Food Prices
It is becoming increasingly apparent that the post-2004, across-the-board, commodity price increases, which initially appeared to be a spike similar to the ones experienced during the early 1950s (Korean War) and the 1970s (oil crises), have a more...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2013/05/17739333/long-term-drivers-food-prices http://hdl.handle.net/10986/15594 |
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okr-10986-15594 |
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| recordtype |
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 DEMAND AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL ECONOMICS AGRICULTURAL PRICES AGRICULTURE ANIMAL PRODUCTS APPROACH AVERAGE PRICE BIOMASS CENTRAL BANKS CEREAL PRICES CEREALS CLIMATE CLIMATE CHANGE COCOA COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES CONSUMPTION OF COMMODITIES CRUDE OIL CRUDE OIL CONSUMPTION CRUDE OIL PRICE CURRENCY DEBT DEMAND FOR FOOD DEMAND GROWTH DEVELOPING COUNTRY DEVELOPMENT ECONOMICS ECONOMIC ACTIVITY ECONOMIC ANALYSIS ECONOMIC GROWTH EDIBLE OILS EFFICIENCY IMPROVEMENT EMERGING ECONOMIES ENERGY DEMAND ENERGY ECONOMICS ENERGY MARKETS ENERGY POLICY ENERGY PRICE ENERGY PRICES ENERGY SECURITY EQUILIBRIUM PRICE ETHANOL ETHANOL PRICES EXCHANGE RATE EXCHANGE RATE MOVEMENT EXCHANGE RATE MOVEMENTS EXCHANGE RATES EXOGENOUS SHOCK EXPORT MARKET FEDERAL RESERVE FINANCIAL INSTITUTIONS FINANCING FACILITY FISCAL POLICY FOOD CONSUMPTION FOOD POLICY FOOD POLICY RESEARCH FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD RESERVES FOOD SECURITY FUEL FUEL CONSUMPTION FUTURES GENERAL EQUILIBRIUM MODEL GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL EXPORTS GLOBAL FOOD SECURITY GRAIN RESERVES GRAINS GROSS DOMESTIC PRODUCT GROWTH RATES IFPRI IMPORTS INCOME INCOMES INFLATION INFLATIONARY PRESSURES INFORMATION SYSTEM INPUT PRICES INSURANCE INSURANCE MECHANISMS INTEREST RATE INTEREST RATES INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INVENTORY MAIZE MARKET CONCENTRATION MARKET FAILURE MARKETING MEAL MIDDLE-INCOME COUNTRIES MONETARY FUND MONETARY POLICIES OIL CONSUMPTION OIL CRISES OIL PRICE OIL PRICES OIL SECTOR OIL SPILLS PADDY PALM OIL PARTICULAR COUNTRY POLICY ANALYSIS POLICY IMPLICATIONS POLICY MAKERS PORTFOLIOS POWER PARITY PRICE CHANGES PRICE ELASTICITY PRICE FLUCTUATIONS PRICE INCREASES PRICE INDEX PRICE INDEXES PRICE INFLATION PRICE MOVEMENTS PRICE OF OIL PRICE STABILIZATION PRICE TRENDS PRICE VOLATILITY PRICES OF ENERGY PRODUCER PRICES PROTEIN PURCHASING PURCHASING POWER RATE OF RETURN RAW MATERIALS RELATIVE PRICE RESERVE BANK RESOURCE ECONOMICS RICE MARKETING SOURCE OF ENERGY SOYBEAN SOYBEAN OIL SOYBEANS STOCKS SUBSTITUTES SUGARCANE SUPPLY SCHEDULE SUPPLY SCHEDULES SUPPLY SHOCKS SUPPLY SIDE TOTAL CONSUMPTION TREASURY TREASURY BILL VOLATILE INTERNATIONAL WHEAT WORLD DEVELOPMENT INDICATORS WORLD TRADE |
| spellingShingle |
AGGREGATE DEMAND AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL ECONOMICS AGRICULTURAL PRICES AGRICULTURE ANIMAL PRODUCTS APPROACH AVERAGE PRICE BIOMASS CENTRAL BANKS CEREAL PRICES CEREALS CLIMATE CLIMATE CHANGE COCOA COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES CONSUMPTION OF COMMODITIES CRUDE OIL CRUDE OIL CONSUMPTION CRUDE OIL PRICE CURRENCY DEBT DEMAND FOR FOOD DEMAND GROWTH DEVELOPING COUNTRY DEVELOPMENT ECONOMICS ECONOMIC ACTIVITY ECONOMIC ANALYSIS ECONOMIC GROWTH EDIBLE OILS EFFICIENCY IMPROVEMENT EMERGING ECONOMIES ENERGY DEMAND ENERGY ECONOMICS ENERGY MARKETS ENERGY POLICY ENERGY PRICE ENERGY PRICES ENERGY SECURITY EQUILIBRIUM PRICE ETHANOL ETHANOL PRICES EXCHANGE RATE EXCHANGE RATE MOVEMENT EXCHANGE RATE MOVEMENTS EXCHANGE RATES EXOGENOUS SHOCK EXPORT MARKET FEDERAL RESERVE FINANCIAL INSTITUTIONS FINANCING FACILITY FISCAL POLICY FOOD CONSUMPTION FOOD POLICY FOOD POLICY RESEARCH FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD RESERVES FOOD SECURITY FUEL FUEL CONSUMPTION FUTURES GENERAL EQUILIBRIUM MODEL GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL EXPORTS GLOBAL FOOD SECURITY GRAIN RESERVES GRAINS GROSS DOMESTIC PRODUCT GROWTH RATES IFPRI IMPORTS INCOME INCOMES INFLATION INFLATIONARY PRESSURES INFORMATION SYSTEM INPUT PRICES INSURANCE INSURANCE MECHANISMS INTEREST RATE INTEREST RATES INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INVENTORY MAIZE MARKET CONCENTRATION MARKET FAILURE MARKETING MEAL MIDDLE-INCOME COUNTRIES MONETARY FUND MONETARY POLICIES OIL CONSUMPTION OIL CRISES OIL PRICE OIL PRICES OIL SECTOR OIL SPILLS PADDY PALM OIL PARTICULAR COUNTRY POLICY ANALYSIS POLICY IMPLICATIONS POLICY MAKERS PORTFOLIOS POWER PARITY PRICE CHANGES PRICE ELASTICITY PRICE FLUCTUATIONS PRICE INCREASES PRICE INDEX PRICE INDEXES PRICE INFLATION PRICE MOVEMENTS PRICE OF OIL PRICE STABILIZATION PRICE TRENDS PRICE VOLATILITY PRICES OF ENERGY PRODUCER PRICES PROTEIN PURCHASING PURCHASING POWER RATE OF RETURN RAW MATERIALS RELATIVE PRICE RESERVE BANK RESOURCE ECONOMICS RICE MARKETING SOURCE OF ENERGY SOYBEAN SOYBEAN OIL SOYBEANS STOCKS SUBSTITUTES SUGARCANE SUPPLY SCHEDULE SUPPLY SCHEDULES SUPPLY SHOCKS SUPPLY SIDE TOTAL CONSUMPTION TREASURY TREASURY BILL VOLATILE INTERNATIONAL WHEAT WORLD DEVELOPMENT INDICATORS WORLD TRADE Baffes, John Dennis, Allen Long-Term Drivers of Food Prices |
| relation |
Policy Research Working Paper;No. 6455 |
| description |
It is becoming increasingly apparent
that the post-2004, across-the-board, commodity price
increases, which initially appeared to be a spike similar to
the ones experienced during the early 1950s (Korean War) and
the 1970s (oil crises), have a more permanent character.
From 1997-2004 to 2005-12 nominal prices of energy,
fertilizers, and precious metals tripled, metal prices went
up by more than 150 percent, and most food prices doubled.
Such price increases, especially in food commodities, not
only fueled a debate on their key causes, but also alarmed
government officials, leading to calls for coordinated
policy actions. This paper examines the relative
contribution of various sector and macroeconomic drivers to
price changes of five food commodities (maize, wheat, rice,
soybeans, and palm oil) by applying a reduced-form
econometric model on 1960-2012 annual data. The drivers
include stock-to-use ratios, crude oil and manufacturing
prices, the United States dollar exchange rate, interest
rate, and income. Based on long-run elasticity estimates
(approximately -0.25 for the stock-to-use ratios, 0.25 for
the oil price, -1.25 for the exchange rate, and much less
for others), the paper estimates the contribution of these
drivers to food price increases from 1997-2004 to 2005-12.
It concludes that most of the price increases are accounted
for by crude oil prices (more than 50 percent), followed by
stock-to-use ratios and exchange rate movements, which are
estimated at about 15 percent each. Crude oil prices
mattered most during the recent boom period because they
experienced the largest increase. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Baffes, John Dennis, Allen |
| author_facet |
Baffes, John Dennis, Allen |
| author_sort |
Baffes, John |
| title |
Long-Term Drivers of Food Prices |
| title_short |
Long-Term Drivers of Food Prices |
| title_full |
Long-Term Drivers of Food Prices |
| title_fullStr |
Long-Term Drivers of Food Prices |
| title_full_unstemmed |
Long-Term Drivers of Food Prices |
| title_sort |
long-term drivers of food prices |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2013/05/17739333/long-term-drivers-food-prices http://hdl.handle.net/10986/15594 |
| _version_ |
1764429524703903744 |
| spelling |
okr-10986-155942021-04-23T14:03:19Z Long-Term Drivers of Food Prices Baffes, John Dennis, Allen AGGREGATE DEMAND AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL ECONOMICS AGRICULTURAL PRICES AGRICULTURE ANIMAL PRODUCTS APPROACH AVERAGE PRICE BIOMASS CENTRAL BANKS CEREAL PRICES CEREALS CLIMATE CLIMATE CHANGE COCOA COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES CONSUMPTION OF COMMODITIES CRUDE OIL CRUDE OIL CONSUMPTION CRUDE OIL PRICE CURRENCY DEBT DEMAND FOR FOOD DEMAND GROWTH DEVELOPING COUNTRY DEVELOPMENT ECONOMICS ECONOMIC ACTIVITY ECONOMIC ANALYSIS ECONOMIC GROWTH EDIBLE OILS EFFICIENCY IMPROVEMENT EMERGING ECONOMIES ENERGY DEMAND ENERGY ECONOMICS ENERGY MARKETS ENERGY POLICY ENERGY PRICE ENERGY PRICES ENERGY SECURITY EQUILIBRIUM PRICE ETHANOL ETHANOL PRICES EXCHANGE RATE EXCHANGE RATE MOVEMENT EXCHANGE RATE MOVEMENTS EXCHANGE RATES EXOGENOUS SHOCK EXPORT MARKET FEDERAL RESERVE FINANCIAL INSTITUTIONS FINANCING FACILITY FISCAL POLICY FOOD CONSUMPTION FOOD POLICY FOOD POLICY RESEARCH FOOD PRICE FOOD PRICE INFLATION FOOD PRICES FOOD RESERVES FOOD SECURITY FUEL FUEL CONSUMPTION FUTURES GENERAL EQUILIBRIUM MODEL GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMY GLOBAL EXPORTS GLOBAL FOOD SECURITY GRAIN RESERVES GRAINS GROSS DOMESTIC PRODUCT GROWTH RATES IFPRI IMPORTS INCOME INCOMES INFLATION INFLATIONARY PRESSURES INFORMATION SYSTEM INPUT PRICES INSURANCE INSURANCE MECHANISMS INTEREST RATE INTEREST RATES INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE INVENTORY MAIZE MARKET CONCENTRATION MARKET FAILURE MARKETING MEAL MIDDLE-INCOME COUNTRIES MONETARY FUND MONETARY POLICIES OIL CONSUMPTION OIL CRISES OIL PRICE OIL PRICES OIL SECTOR OIL SPILLS PADDY PALM OIL PARTICULAR COUNTRY POLICY ANALYSIS POLICY IMPLICATIONS POLICY MAKERS PORTFOLIOS POWER PARITY PRICE CHANGES PRICE ELASTICITY PRICE FLUCTUATIONS PRICE INCREASES PRICE INDEX PRICE INDEXES PRICE INFLATION PRICE MOVEMENTS PRICE OF OIL PRICE STABILIZATION PRICE TRENDS PRICE VOLATILITY PRICES OF ENERGY PRODUCER PRICES PROTEIN PURCHASING PURCHASING POWER RATE OF RETURN RAW MATERIALS RELATIVE PRICE RESERVE BANK RESOURCE ECONOMICS RICE MARKETING SOURCE OF ENERGY SOYBEAN SOYBEAN OIL SOYBEANS STOCKS SUBSTITUTES SUGARCANE SUPPLY SCHEDULE SUPPLY SCHEDULES SUPPLY SHOCKS SUPPLY SIDE TOTAL CONSUMPTION TREASURY TREASURY BILL VOLATILE INTERNATIONAL WHEAT WORLD DEVELOPMENT INDICATORS WORLD TRADE It is becoming increasingly apparent that the post-2004, across-the-board, commodity price increases, which initially appeared to be a spike similar to the ones experienced during the early 1950s (Korean War) and the 1970s (oil crises), have a more permanent character. From 1997-2004 to 2005-12 nominal prices of energy, fertilizers, and precious metals tripled, metal prices went up by more than 150 percent, and most food prices doubled. Such price increases, especially in food commodities, not only fueled a debate on their key causes, but also alarmed government officials, leading to calls for coordinated policy actions. This paper examines the relative contribution of various sector and macroeconomic drivers to price changes of five food commodities (maize, wheat, rice, soybeans, and palm oil) by applying a reduced-form econometric model on 1960-2012 annual data. The drivers include stock-to-use ratios, crude oil and manufacturing prices, the United States dollar exchange rate, interest rate, and income. Based on long-run elasticity estimates (approximately -0.25 for the stock-to-use ratios, 0.25 for the oil price, -1.25 for the exchange rate, and much less for others), the paper estimates the contribution of these drivers to food price increases from 1997-2004 to 2005-12. It concludes that most of the price increases are accounted for by crude oil prices (more than 50 percent), followed by stock-to-use ratios and exchange rate movements, which are estimated at about 15 percent each. Crude oil prices mattered most during the recent boom period because they experienced the largest increase. 2013-09-04T18:32:32Z 2013-09-04T18:32:32Z 2013-05 http://documents.worldbank.org/curated/en/2013/05/17739333/long-term-drivers-food-prices http://hdl.handle.net/10986/15594 English en_US Policy Research Working Paper;No. 6455 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |