Food Price Volatility
In: MEDC Economic Digest, Vol. XLVI No. September 2017
In: MEDC Economic Digest, Vol. XLVI No. September 2017
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Yahodzinska A.S. FOOD PRICE VOLATILITY IN UKRAINEPurpose. The aim of the article is to establish the level of food price volatility in Ukraine in order to develop national and regional food security programs in the framework of the 2030 sustainable development goals.Methodology of research. The theoretical basis of the study are the fundamental provisions of the food system, modern economic theory, which defines the goals and patterns of sustainable development of the world and Ukraine, scientific works of domestic and foreign scientists on food security, public administration and legislative settlement of this problem.The methodological basis of the study is the dialectical method and general and special methods of scientific knowledge. The following methods of economic research are used in the research process: abstract and logical (formation of principles, theoretical generalizations and conclusions); monographic (study of experience in food security); system analysis (determination of causal relationships); elementary-theoretical analysis and synthesis (establishment of patterns of development). Also in the process of research statistical methods are used: comparison, graphical and index. Using these methods, the state and dynamics of indicators of price fluctuations for food in Ukraine as a whole and in terms of territorial and administrative units, their economic and social consequences are analysed.The information base of the study is legislative and regulatory acts and program documents of state bodies of Ukraine and EU countries, official materials of the Cabinet of Ministers of Ukraine, methodical and statistical materials of the State Statistics Service of Ukraine and relevant services and institutions of other countries, scientific information from the world computer network Internet (research results of international organizations and FAO), the results of personal research of the author. Scientific work is based on the Agenda in the field of sustainable development "Ukraine 2016-2030".Findings. It is proved that if the established trends are maintained, it will not be possible to reach the target set in the National Report 2017 "Sustainable Development Goals: Ukraine" of CSW2 at consumer prices for food by 2030. In addition, the forecast values according to actual data significantly exceed the target.Originality. For the first time in Ukraine, the study is conducted on the basis of the indicators of the National Report 2017 "Sustainable Development Goals: Ukraine" in accordance with the identified objectives of CSW2, linking the results with the ability to achieve specific sustainable development goals – to reduce food price volatility.Practical value. Reducing food price volatility will have positive consequences for all actors in the food chain: consumers, producers and the state.Key words: volatility, index, price, food, Sustainable Development Goals, Ukraine.
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In: National Bureau of Economic Research Conference Report
There has been an increase in food price instability in recent years, with varied consequences for farmers, market participants, and consumers. Before policy makers can design schemes to reduce food price uncertainty or ameliorate its effects, they must first understand the factors that have contributed to recent price instability. Does it arise primarily from technological or weather-related supply shocks, or from changes in demand like those induced by the growing use of biofuel? Does financial speculation affect food price volatility?The researchers who contributed to The Economics of Food
In: IMF Working Papers, S. 1-29
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International audience ; Many countries adjust their trade policies counter-cyclically with food prices, to the extent that the use of restrictions by food-exporting countries has occasionally threatened the food security of food-importing countries. These trade policies are inconsistent with the terms-of-trade motivation often retained to characterize the payoff frontier of self-enforcing trade agreements, as they can worsen the terms of trade of the countries that apply them. This article analyzes trade policy coordination when trade policies are driven by terms-of-trade effects and a desire to reduce domestic food price volatility. This framework implies that importing and exporting countries have incentives to deviate from cooperation at different periods: the latter when prices are high and the former when prices are low. Since staple food prices tend to have asymmetric distributions, with more prices below than above the mean but with occasional spikes, a self-enforcing agreement generates asymmetric outcomes. Without cooperation, an importing country uses its trade policy more frequently because of the concentration of prices below the mean, but an exporting country has a greater incentive to deviate from a cooperative trade policy because positive deviations from the mean price are larger than negative ones. Thus, the asymmetry of the distribution of commodity prices can make it more difficult to discipline export taxes than tariffs in trade agreements. ; De nombreux pays ajustent leur politique commerciale de manière contracyclique par rapport aux prix alimentaires, au point que les restrictions aux exportations utilisées par beaucoup de pays exportateurs ont occasionnellement menacé la sécurité alimentaire des pays importateurs. Notre article analyse la coordination des politiques commerciales lorsque celles-ci sont motivées à la fois par la manipulation des termes de l'échange et par le désir de limiter la volatilité des prix alimentaires domestiques. Ce cadre théorique implique que les pays ...
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Purpose. There are sufficient evidences in the literature that welfare of food producers and consumers is easily compromised due to unfavorable food price volatility dynamics. Therefore, this study investigates the volatility dynamics in food price index returns (FPIRETURNS), imported food price index returns (CIFCPIRETURNS), price of dollars at bureau de change (BDCRETURNS) and inter-bank rate (EXRETURNS). Design/Methodology/Approach. In view of the increasing quest to account for volatility behavior such as non-linear and time-varying risk premium in food price series using an appropriate tool, this paper adopts exponential generalized autoregressive conditional heteroscedasticity (EGARCH) model. This is because it allows error terms to be conditional heteroscedastic, and the dynamics process generating the underlying heteroscedasticity to be asymmetric. That is, the model introduces a parameter that can reveal how conditional variance respond to both positive and negative shocks of equal magnitude (asymmetric effect). Findings and Implications. The study finds leverage effect and high persistence in some of the selected models. Also, exchange rate volatility affects volatility of FPIRETURNS, but it is more pronounced on the volatility of CIFCPIRETURNS. Limitations. Inadequate data especially for CIFCPIRETURNS is a huge limitation in this study. Originality. However, this study has sufficient empirical evidences that instability in forex market flows into the Nigerian food market with pronounced leverage effect and persistence in food price volatility. The recommendation is, government should implement stabilization policy in the forex market as a precursor to ensuring stability in domestic food market.
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International audience ; Many countries adjust their trade policies counter-cyclically with food prices, to the extent that the use of restrictions by food-exporting countries has occasionally threatened the food security of food-importing countries. These trade policies are inconsistent with the terms-of-trade motivation often retained to characterize the payoff frontier of self-enforcing trade agreements, as they can worsen the terms of trade of the countries that apply them. This article analyzes trade policy coordination when trade policies are driven by terms-of-trade effects and a desire to reduce domestic food price volatility. This framework implies that importing and exporting countries have incentives to deviate from cooperation at different periods: the latter when prices are high and the former when prices are low. Since staple food prices tend to have asymmetric distributions, with more prices below than above the mean but with occasional spikes, a self-enforcing agreement generates asymmetric outcomes. Without cooperation, an importing country uses its trade policy more frequently because of the concentration of prices below the mean, but an exporting country has a greater incentive to deviate from a cooperative trade policy because positive deviations from the mean price are larger than negative ones. Thus, the asymmetry of the distribution of commodity prices can make it more difficult to discipline export taxes than tariffs in trade agreements. ; De nombreux pays ajustent leur politique commerciale de manière contracyclique par rapport aux prix alimentaires, au point que les restrictions aux exportations utilisées par beaucoup de pays exportateurs ont occasionnellement menacé la sécurité alimentaire des pays importateurs. Notre article analyse la coordination des politiques commerciales lorsque celles-ci sont motivées à la fois par la manipulation des termes de l'échange et par le désir de limiter la volatilité des prix alimentaires domestiques. Ce cadre théorique implique que les pays importateurs et exportateurs ont des incitations à dévier de la coopération à des périodes différentes: les exportateurs lorsque les prix sont élevés et les importateurs lorsque les prix sont bas. Dans la mesure où les prix des matières premières alimentaires ont une distribution asymétrique avec une queue de distribution étalée vers les prix élevés, un accord commercial tendrait à générer des résultats asymétriques. En l'absence de coopération, un pays importateur utilise plus fréquemment sa politique commerciale du fait de la concentration des prix mondiaux en dessous de leur moyenne, mais un pays exportateur aura une plus grande incitation à dévier de la coopération car les déviations positives des prix par rapport à leur moyenne sont plus importantes que les déviations négatives. L'asymétrie de la distribution des prix alimentaires pourrait donc rendre difficile tout accord international pour discipliner l'usage des restrictions aux exportations.
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International audience ; Many countries adjust their trade policies counter-cyclically with food prices, to the extent that the use of restrictions by food-exporting countries has occasionally threatened the food security of food-importing countries. These trade policies are inconsistent with the terms-of-trade motivation often retained to characterize the payoff frontier of self-enforcing trade agreements, as they can worsen the terms of trade of the countries that apply them. This article analyzes trade policy coordination when trade policies are driven by terms-of-trade effects and a desire to reduce domestic food price volatility. This framework implies that importing and exporting countries have incentives to deviate from cooperation at different periods: the latter when prices are high and the former when prices are low. Since staple food prices tend to have asymmetric distributions, with more prices below than above the mean but with occasional spikes, a self-enforcing agreement generates asymmetric outcomes. Without cooperation, an importing country uses its trade policy more frequently because of the concentration of prices below the mean, but an exporting country has a greater incentive to deviate from a cooperative trade policy because positive deviations from the mean price are larger than negative ones. Thus, the asymmetry of the distribution of commodity prices can make it more difficult to discipline export taxes than tariffs in trade agreements. ; De nombreux pays ajustent leur politique commerciale de manière contracyclique par rapport aux prix alimentaires, au point que les restrictions aux exportations utilisées par beaucoup de pays exportateurs ont occasionnellement menacé la sécurité alimentaire des pays importateurs. Notre article analyse la coordination des politiques commerciales lorsque celles-ci sont motivées à la fois par la manipulation des termes de l'échange et par le désir de limiter la volatilité des prix alimentaires domestiques. Ce cadre théorique implique que les pays importateurs et exportateurs ont des incitations à dévier de la coopération à des périodes différentes: les exportateurs lorsque les prix sont élevés et les importateurs lorsque les prix sont bas. Dans la mesure où les prix des matières premières alimentaires ont une distribution asymétrique avec une queue de distribution étalée vers les prix élevés, un accord commercial tendrait à générer des résultats asymétriques. En l'absence de coopération, un pays importateur utilise plus fréquemment sa politique commerciale du fait de la concentration des prix mondiaux en dessous de leur moyenne, mais un pays exportateur aura une plus grande incitation à dévier de la coopération car les déviations positives des prix par rapport à leur moyenne sont plus importantes que les déviations négatives. L'asymétrie de la distribution des prix alimentaires pourrait donc rendre difficile tout accord international pour discipliner l'usage des restrictions aux exportations.
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Intro -- Foreword -- Acknowledgments -- Contents -- Part I Introduction -- 1 Volatile and Extreme Food Prices, Food Security, and Policy: An Overview -- 1.1 The Relevance of Food Price Volatility -- 1.2 Understanding the Linkages Between Food Security, Price Volatility, and Extreme Events -- 1.2.1 The Concept of Food Security -- 1.2.2 Food Price Volatility -- 1.2.3 Extreme Events -- 1.3 Conceptual Framework of Volatility, Food Security Impacts, and Policy Responses -- 1.4 Contribution and Contents of the Book -- 1.5 Implications for Policymaking -- 1.5.1 Policies to Prevent and Reduce Excessive Price Volatility -- 1.5.1.1 Agricultural Markets: Information, Transparency, and Regulation -- 1.5.1.2 Stocks, Trade, and Regional Cooperation -- 1.5.1.3 Biofuel Policies, Energy Prices, Climate Change, and Technological Change -- 1.5.2 Social Protection and Nutrition Policies -- 1.5.3 New International Institutional Arrangements -- 1.6 Implications for Future Research -- References -- Part II Food Price Volatility at International Food Commodity Markets -- 2 Volatile Volatility: Conceptual and Measurement Issues Related to Price Trends and Volatility -- 2.1 Introduction -- 2.2 Price Levels and Price Variability -- 2.3 Different Measures and Concepts -- 2.3.1 Prices in Real or Nominal Terms -- 2.3.2 World Prices: In What Currency? -- 2.3.3 Domestic Prices and World Prices -- 2.3.4 Time Horizons -- 2.3.5 The Selection of Food Indices and Food Prices -- 2.3.6 Trends and Volatility: Different Approaches -- 2.3.7 Trends and cycles -- 2.3.8 Shorter-term Variations -- 2.3.9 Expected and Historical Volatility -- 2.3.10 Scaling the Shocks -- 2.4 Conclusions -- References -- 3 Drivers and Triggers of International Food Price Spikes and Volatility -- 3.1 Introduction -- 3.2 Conceptual Framework -- 3.3 Estimation Methods -- 3.4 Data -- 3.5 Results and Discussion.
In: American Journal of Agricultural Economics, Band 97, Heft 1, S. 1-21
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In: APSA 2012 Annual Meeting Paper
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Working paper
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Working paper
In: Commodity market instability and asymmetries in developing countries: Development impacts and policies. 2016; Commodity market instability and asymmetries in developing countries: Development impacts and policies, Clermont-Ferrand, FRA, 2015-06-24-2015-06-25, 73-79
During food price spikes, food exporting countries frequently use export restrictions to insulate their domestic markets from high prices on the world market. Their use can be so widespread that the high levels reached by international prices could be seen as a consequence of these interventions (Dawe and Slayton, 2011), and the restrictions can be so stringent that they can lead to the near disappearance of the world market as happened to the rice market over nine months in 1973 (Timmer, 2010). Food importing countries also act: they decrease their tariffs to protect their consumers but when world prices are low, the situation is reversed and importers raise their import duties. In summary, in food markets, countries routinely adjust their trade barriers to insulate their domestic markets from international price variability (Anderson and Nelgen, 2012). The lack of commitment to leaving borders open can reduce trust in the world trade system and lead to costly policies. Importing countries that expect food exporters to restrict their exports in times of scarcity will move away from the specialization consistent with their comparative advantages in order to ensure greater self-sufficiency, or will carry expensive public stocks. For example, the current large-scale public interventions in the Asian countries, through which many countries attempt to achieve self-sufficiency in major staples, can be explained largely by their experience in the 1972/73 food crisis (Rashid et al., 2008). ; De nombreux pays ajustent leur politique commerciale de manière contracyclique par rapport aux prix alimentaires, au point que les restrictions aux exportations utilisées par beaucoup de pays exportateurs ont occasionnellement menacé la sécurité alimentaire des pays importateurs. Notre article analyse la coordination des politiques commerciales lorsque celles-ci sont motivées à la fois par la manipulation des termes de l'échange et par le désir de limiter la volatilité des prix alimentaires domestiques. Ce cadre théorique implique que les pays importateurs et exportateurs ont des incitations à dévier de la coopération à des périodes différentes: les exportateurs lorsque les prix sont élevés et les importateurs lorsque les prix sont bas. Dans la mesure où les prix des matières premières alimentaires ont une distribution asymétrique avec une queue de distribution étalée vers les prix élevés, un accord commercial tendrait à générer des résultats asymétriques. En l'absence de coopération, un pays importateur utilise plus fréquemment sa politique commerciale du fait de la concentration des prix mondiaux en dessous de leur moyenne, mais un pays exportateur aura une plus grande incitation à dévier de la coopération car les déviations positives des prix par rapport à leur moyenne sont plus importantes que les déviations négatives. L'asymétrie de la distribution des prix alimentaires pourrait donc rendre difficile tout accord international pour discipliner l'usage des restrictions aux exportations.
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In: American Journal of Agricultural Economics, Band 98, Heft 4, S. 1018-1037
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Agricultural Economics