IDEAS home Printed from https://ideas.repec.org/a/eee/jfpoli/v57y2015icp83-92.html
   My bibliography  Save this article

Explaining grain and oilseed price volatility: The role of export restrictions

Author

Listed:
  • Rude, James
  • An, Henry

Abstract

This study examines the impact that export restrictions have had on price volatility. Food price volatility causes planning problems for policy makers and is disruptive to the food supply chain. An increasingly common response to stabilizing domestic prices is to implement export restrictions. However, if the country is a large enough exporter, the restriction can exacerbate global price volatility. Using price data on maize, wheat, rice and soy, we estimate the effect of export taxes and quantitative restrictions – as well as other macroeconomic variables – on price volatility. First, we use a univariate structural time series approach to remove regularities such as cycles and trends to yield an estimate of filtered price volatilities. Second, we regress the estimated volatilities from the first stage on a set of explanatory variables using a generalized method of moments (GMM) approach. The results from the GMM regression show that export restrictions implemented between 2006 and 2011 increased price volatility for wheat and rice but not maize and soybean. Simulation results show that the contribution of export restrictions to price volatility is the same order of magnitude as key macroeconomic variables.

Suggested Citation

  • Rude, James & An, Henry, 2015. "Explaining grain and oilseed price volatility: The role of export restrictions," Food Policy, Elsevier, vol. 57(C), pages 83-92.
    • Handle: RePEc:eee:jfpoli:v:57:y:2015:i:c:p:83-92
    DOI: 10.1016/j.foodpol.2015.09.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306919215001116
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.foodpol.2015.09.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Christopher L. Gilbert, 2010. "How to Understand High Food Prices," Journal of Agricultural Economics, Wiley Blackwell, vol. 61(2), pages 398-425, June.
    2. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
    3. Dawe, David, 2008. "Have recent increases in international cereal prices been transmitted to domestic economies? The experience in seven large Asian countries," ESA Working Papers 37087, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    4. Paolo E. Giordani & Nadia Rocha & Michele Ruta, 2012. "Food Prices and the Multiplier Effect of Export Policy," CESifo Working Paper Series 3783, CESifo.
    5. Tom Slayton, 2009. "Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire," Working Papers 163, Center for Global Development.
    6. Headey, Derek, 2011. "Rethinking the global food crisis: The role of trade shocks," Food Policy, Elsevier, vol. 36(2), pages 136-146, April.
    7. Rafael E. de Hoyos & Denis Medvedev, 2011. "Poverty Effects of Higher Food Prices: A Global Perspective," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 387-402, August.
    8. Piesse, Jenifer & Thirtle, Colin, 2009. "Three bubbles and a panic: An explanatory review of recent food commodity price events," Food Policy, Elsevier, vol. 34(2), pages 119-129, April.
    9. David Dawe, 2008. "Have Recent Increases in International Cereal Prices Been Transmitted to Domestic Economies? The experience in seven large Asian countries," Working Papers 08-03, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    10. Cooke, Bryce & Robles, Miguel, 2009. "Recent food prices movements: A time series analysis," IFPRI discussion papers 942, International Food Policy Research Institute (IFPRI).
    11. Yu, T. Edward & Tokgoz, Simla & Wailes, Eric & Chavez, Eddie C., 2017. "A quantitative analysis of trade policy responses to higher world agricultural commodity prices:," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 11, International Food Policy Research Institute (IFPRI).
    12. Götz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2013. "Wheat export restrictions and domestic market effects in Russia and Ukraine during the food crisis," Food Policy, Elsevier, vol. 38(C), pages 214-226.
    13. Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank.
    14. Bouët, Antoine & Laborde Debucquet, David, 2017. "Food crisis and export taxation: The cost of noncooperative trade policies:," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 12, International Food Policy Research Institute (IFPRI).
    15. Ramey, Garey & Ramey, Valerie A, 1995. "Cross-Country Evidence on the Link between Volatility and Growth," American Economic Review, American Economic Association, vol. 85(5), pages 1138-1151, December.
    16. von Braun, Joachim & Tadesse, Getaw, 2012. "Global Food Price Volatility and Spikes: An Overview of Costs, Causes, and Solutions," Discussion Papers 120021, University of Bonn, Center for Development Research (ZEF).
    17. Mr. Shaun K. Roache, 2010. "What Explains the Rise in Food Price Volatility?," IMF Working Papers 2010/129, International Monetary Fund.
    18. Brian D. Wright, 2011. "The Economics of Grain Price Volatility," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 32-58.
    19. Dorosh, Paul A. & Rashid, Shahidur, 2013. "Trade subsidies, export bans and price stabilization: Lessons of Bangladesh–India rice trade in the 2000s," Food Policy, Elsevier, vol. 41(C), pages 103-111.
    20. Joao Tovar Jalles, 2009. "Structural time series models and the Kalman filter: a concise review," Nova SBE Working Paper Series wp541, Universidade Nova de Lisboa, Nova School of Business and Economics.
    21. Adjemian, Michael K. & Janzen, Joseph & Carter, Colin A. & Smith, Aaron, 2014. "Deconstructing Wheat Price Spikes: A Model of Supply and Demand, Financial Speculation, and Commodity Price Comovement," Economic Research Report 167369, United States Department of Agriculture, Economic Research Service.
    22. Darryl Jones & Andrzej Kwieciński, 2010. "Policy Responses in Emerging Economies to International Agricultural Commodity Price Surges," OECD Food, Agriculture and Fisheries Papers 34, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vasylieva, Natalia, 2020. "Application of Markowitz Portfolio Theory to Producing the World Major Field Crops," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 10(3), December.
    2. Rosero, Gabriel & Jaghdani, Tinoush Jamali & Brümmer, Bernhard, 2021. "Unravelling complex market relationships. A study on the price volatility of Brazilian pork using a DCC-MGARCH approach," 95th Annual Conference, March 29-30, 2021, Warwick, UK (Hybrid) 311090, Agricultural Economics Society - AES.
    3. An, Henry & Qiu, Feng & Zheng, Yanan, 2016. "How do export controls affect price transmission and volatility spillovers in the Ukrainian wheat and flour markets?," Food Policy, Elsevier, vol. 62(C), pages 142-150.
    4. Berger, Jurij & Dalheimer, Bernhard & Brümmer, Bernhard, 2021. "Effects of variable EU import levies on corn price volatility," Food Policy, Elsevier, vol. 102(C).
    5. Blake, Daniella & Dawson, Carolina & Loeillet, Denis & Staver, Charles, 2018. "Can Global Climate Change affect Prices in the World Banana Market?," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 67(1), March.
    6. Santeramo, Fabio Gaetano, 2017. "Market Fundamentals And International Grain Price Volatility," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260908, European Association of Agricultural Economists.
    7. Natalia Vasylieva, 2018. "Ukrainian Agricultural Contribution to the World Food Security: Economic Problems and Prospects," Montenegrin Journal of Economics, Economic Laboratory for Transition Research (ELIT), vol. 14(4), pages 215-224.
    8. Fabio Gaetano Santeramo & Emilia Lamonaca, 2019. "On the drivers of global grain price volatility: an empirical investigation," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(1), pages 31-42.
    9. Estrades, Carmen, 2015. "The Role of Export Restrictions in Agriculture Trade," 2015: Trade and Societal Well-Being, December 13-15, 2015, Clearwater Beach, Florida 229229, International Agricultural Trade Research Consortium.
    10. Fabio Gaetano Santeramo & Emilia Lamonaca & Francesco Contò & Gianluca Nardone & Antonio Stasi, 2018. "Drivers of grain price volatility: a cursory critical review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(8), pages 347-356.
    11. Ahmad Nazifi Muhammad & Ahmad Usman Shu’aib & Zulkiflu Abdu, 2021. "Macroeconomic factors: Cereal Grains Output and Prices in Nigeria," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 8(3), pages 46-49, March.
    12. Dalheimer, Bernhard & Brümmer, Bernhard & Jaghdani, Tinoush Jamali, 2017. "Impacts of Export Restrictions on Food Price Volatility: Evidence from VAR-X and EGARCH-X Models," 57th Annual Conference, Weihenstephan, Germany, September 13-15, 2017 262151, German Association of Agricultural Economists (GEWISOLA).
    13. Charlotte Fontan Sers & Mazhar Mughal, 2023. "Food riots redux: lessons from the 2007-08 food crisis," Working Papers hal-03973284, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matthias Kalkuhl & Lukas Kornher & Marta Kozicka & Pierre Boulanger & Maximo Torero, 2013. "Conceptual framework on price volatility and its impact on food and nutrition security in the short term," FOODSECURE Working papers 15, LEI Wageningen UR.
    2. Kuhanathan Ano Sujithan & Sanvi Avouyi-Dovi & Lyes Koliai, 2014. "On the determinants of food price volatility," Post-Print hal-01511900, HAL.
    3. repec:dau:papers:123456789/12798 is not listed on IDEAS
    4. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    5. Shikha Jha & P.V. Srinivasan, 2014. "Food price inflation, growth and poverty," Chapters, in: Raghbendra Jha & Raghav Gaiha & Anil B. Deolalikar (ed.), Handbook on Food, chapter 4, pages 72-99, Edward Elgar Publishing.
    6. von Braun, Joachim & Tadesse, Getaw, 2012. "Global Food Price Volatility and Spikes: An Overview of Costs, Causes, and Solutions," Discussion Papers 120021, University of Bonn, Center for Development Research (ZEF).
    7. Reboredo, Juan C., 2012. "Do food and oil prices co-move?," Energy Policy, Elsevier, vol. 49(C), pages 456-467.
    8. Yamauchi, Futoshi & Larson, Donald F., 2019. "Long-term impacts of an unanticipated spike in food prices on child growth in Indonesia," World Development, Elsevier, vol. 113(C), pages 330-343.
    9. An, Henry & Qiu, Feng & Zheng, Yanan, 2016. "How do export controls affect price transmission and volatility spillovers in the Ukrainian wheat and flour markets?," Food Policy, Elsevier, vol. 62(C), pages 142-150.
    10. Estrades, Carmen, 2015. "The Role of Export Restrictions in Agriculture Trade," 2015: Trade and Societal Well-Being, December 13-15, 2015, Clearwater Beach, Florida 229229, International Agricultural Trade Research Consortium.
    11. Estrades, Carmen & Terra, María Inés, 2012. "Commodity prices, trade, and poverty in Uruguay," Food Policy, Elsevier, vol. 37(1), pages 58-66.
    12. Gutierrez, L. & Piras, F., 2013. "A Global Wheat Market Model (GLOWMM) for the Analysis of Wheat Export Prices," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149760, Italian Association of Agricultural and Applied Economics (AIEAA).
    13. Colin A. Carter & Gordon C. Rausser & Aaron Smith, 2011. "Commodity Booms and Busts," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 87-118, October.
    14. Anania, Giovanni, 2013. "Agricultural Export Restrictions and the WTO: What Options Do Policy-Makers Have For Promoting Food Security?," Price Volatility and Beyond 320191, International Centre for Trade and Sustainable Development (ICTSD).
    15. Gutierrez, Luciano & Piras, Francesco, 2014. "A global VAR model for the analysis of wheat export prices," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182723, European Association of Agricultural Economists.
    16. Beckmann, Joscha & Czudaj, Robert, 2014. "Volatility transmission in agricultural futures markets," Economic Modelling, Elsevier, vol. 36(C), pages 541-546.
    17. Mensi, Walid & Hammoudeh, Shawkat & Nguyen, Duc Khuong & Yoon, Seong-Min, 2014. "Dynamic spillovers among major energy and cereal commodity prices," Energy Economics, Elsevier, vol. 43(C), pages 225-243.
    18. Tiziano Distefano & Guido Chiarotti & Francesco Laio & Luca Ridolfi, 2018. "Spatial distribution of the international food prices: unexpected randomness and heterogeneity," SEEDS Working Papers 0118, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2018.
    19. Bradford, Scott C. & Negi, Digvijay Singh & Ramaswami, Bharat, 2022. "International risk sharing for food staples," Journal of Development Economics, Elsevier, vol. 158(C).
    20. Götz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2013. "Wheat export restrictions and domestic market effects in Russia and Ukraine during the food crisis," Food Policy, Elsevier, vol. 38(C), pages 214-226.
    21. Fan Yang & Eddy Bekkers & Martina Brockmeier & Joseph Francois, 2015. "Food Price Pass‐Through and the Role of Domestic Margin Services," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(3), pages 796-811, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:57:y:2015:i:c:p:83-92. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/foodpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.