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Cereal Price Transmission in Several Large Asian Countries during the Global Food Crisis

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  • Dawe, David

Abstract

World cereal prices have been increasing substantially since 2003. Until 2008, the Asian countries examined in this paper (Bangladesh, China, India, Indonesia, the Philippines, Thailand and Viet Nam) had generally been able to contain domestic price increases by using trade policies and taking advantage of the depreciation of the US dollar. On average, domestic price increases in real terms were only about one third of the world price increases in real US dollar terms. In the face of large world price increases in early 2008, the transmission to domestic markets was still incomplete, but prices increased substantially in some countries. In other countries, however, prices increased very little, if at all. Trade policies explain some of the different outcomes across countries, but speculative activity by farmers, traders, and consumers also appears to have played a role. While there has been incomplete transmission between world and domestic markets, transmission within national borders has been stronger in the sense that, for any given country, percentage increases in farm and consumer prices have been similar. The overall price increases during the past several years have probably been large enough to create a supply response, even in the face of higher fertilizer prices.

Suggested Citation

  • Dawe, David, 2009. "Cereal Price Transmission in Several Large Asian Countries during the Global Food Crisis," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 6(01), pages 1-12, June.
  • Handle: RePEc:ags:phajad:199068
    DOI: 10.22004/ag.econ.199068
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    References listed on IDEAS

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    2. Tom Slayton, 2009. "Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire," Working Papers 163, Center for Global Development.
    3. Warr, Peter G., 2005. "Food policy and poverty in Indonesia: a general equilibrium analysis," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 49(4), pages 1-23.
    4. Warr, Peter G., 2005. "Food Policy And Poverty: A General Equilibrium Analysis For Indonesia," 2005 Conference (49th), February 9-11, 2005, Coff's Harbour, Australia 139296, Australian Agricultural and Resource Economics Society.
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    Cited by:

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    2. Anthony N. Rezitis & Ourania A. Tremma, 2022. "The linkage between international dairy commodity prices and volatility: a panel-GARCH analysis," Journal of Agribusiness in Developing and Emerging Economies, Emerald Group Publishing Limited, vol. 13(5), pages 685-705, April.
    3. Koji Kubo, 2013. "Rice Yield Gap between Myanmar and Vietnam: A Matter of Price Policy or Public Investment in Technology?," Asian Journal of Agriculture and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), vol. 10(1), pages 1-24, June.
    4. Mittal, S & Hariharan, VK & Subash, SP, 2018. "Price volatility trends and price transmission for major staples in India," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 31(01).
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    6. Lee, Jim & Valera, Harold Glenn, 2015. "Price Transmission and Volatility Spillovers in Asian Rice Markets: Evidence from a Panel GARCH Model," MPRA Paper 123468, University Library of Munich, Germany.

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