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The Unimportance of “Low” World Grain Stocks for Recent World Price Increases

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Author Info
David Dawe (Agricultural Development Economics Division Food and Agriculture Organization Italy)
Abstract

Beginning in 1999/2000, global stock to use ratios for the major cereal grains declined rapidly, and just before the beginnings of the world food crisis in the second half of 2006 these ratios had reached their lowest levels in more than 20 years for all of the three major grains (rice, wheat, and maize). Most of the decline was driven by stock drawdowns in China, however. The declines in stock to use ratios for the world without China were much less rapid and the ratios did not reach particularly low levels before, or even during, the world food crisis. Although China’s demand does influence world markets, it makes sense to analyze the stock data without China because China is a relatively small player in world grain markets and because China’s stock management does not appear to influence or be influenced by world market trends. These observations suggest that stocks did not have an important effect on the evolution of the world food crisis.

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Publisher Info
Paper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 09-01.

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Length: 13 pages
Date of creation: 2009
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Handle: RePEc:fao:wpaper:0901

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Related research
Keywords: Stocks; food prices; food crisis.;

Find related papers by JEL classification:
Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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  1. Derek Headey & Shenggen Fan, 2008. "Anatomy of a crisis: the causes and consequences of surging food prices," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 375-391, November. [Downloadable!] (restricted)
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This page was last updated on 2009-11-16.


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