International Grain Reserves And Other Instruments to Address Volatility in Grain Markets
In the long view, recent volatility of prices of the major grains is not anomalous. Wheat, rice, and maize are highly substitutable in the global market for calories, and when aggregate stocks decline to minimal feasible levels, prices become highly sensitive to small shocks, consistent with the economics of storage behavior. In this decade, stocks declined due to high global income growth and biofuels mandates, making markets unusually sensitive to subsequent unanticipated shocks, including biofuels demand boosts in reaction to high petroleum prices, the Australian drought, and other regional grain production problems. To protect their own vulnerable and politically influential consumers, key exporters restricted supplies in 2007, exacerbating the price rise. Understandably, vulnerable importers are now building strategic reserves. To reduce costs and disincentive effects, reserves should have quantitative goals related to targeted distribution to the most vulnerable in severe emergencies. For countries with significant animal feeding or biofuels industries, options contracts to protect the consumption of the most vulnerable from harvest shocks are likely to be more cost-effective than emergency reserves. Copyright 2012, Oxford University Press.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 27 (2012)
Issue (Month): 2 (August)
|Contact details of provider:|| Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK|
Phone: (202) 477-1234
Fax: 01865 267 985
Web page: http://wbro.oxfordjournals.org/
More information through EDIRC
|Order Information:||Web: http://www.oup.co.uk/journals|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Irwin, Scott H. & Sanders, Dwight R. & Merrin, Robert P., 2009. "Devil or Angel? The Role of Speculation in the Recent Commodity Price Boom (and Bust)," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 41(02), August.
- Eugenio Bobenrieth & Juan Bobenrieth, 2006.
"A Foundation for the Solution of Consumption-Saving Behavior with Borrowing Constraint and Unbounded Marginal Utility,"
02-2006, Departamento de Economía, Universidad de Concepción.
- Bobenrieth H., Eugenio S.A. & Bobenrieth H., Juan R.A. & Wright, Brian D., 2008. "A foundation for the solution of consumption-saving behavior with a borrowing constraint and unbounded marginal utility," Journal of Economic Dynamics and Control, Elsevier, vol. 32(3), pages 695-708, March.
- Ricardo J. Caballero & Emmanuel Farhi & Pierre-Olivier Gourinchas, 2008.
"Financial Crash, Commodity Prices and Global Imbalances,"
NBER Working Papers
14521, National Bureau of Economic Research, Inc.
- Caballero, Ricardo & Farhi, Emmanuel & Gourinchas, Pierre-Olivier, 2008. "Financial Crash, Commodity Prices and Global Imbalances," CEPR Discussion Papers 7064, C.E.P.R. Discussion Papers.
- Emmanuel Farhi & Ricardo Caballero & Pierre-Olivier Gourinchas, "undated". "Financial Crash, Commodity Prices and Global Imbalances," Working Paper 20933, Harvard University OpenScholar.
- Gourinchas, Pierre-Oliver & Farhi, Emmanuel & Caballero, Ricardo J., 2008. "Financial Crash, Commodity Prices, and Global Imbalances," Scholarly Articles 3229095, Harvard University Department of Economics.
- Peter Bardsley, 1992.
"The Collapse of the Australian Wool Reserve Price Scheme,"
1992.17, School of Economics, La Trobe University.
- Bardsley, Peter, 1994. "The Collapse of the Australian Wool Reserve Price Scheme," Economic Journal, Royal Economic Society, vol. 104(426), pages 1087-1105, September.
- Peter Bardsley, 1992. "The Collapse of the Australian Wool Reserve Price Scheme," Working Papers 1992.17 EDIRC Provider-In, School of Economics, La Trobe University.
- repec:uwp:jhriss:v:2:y:1967:i:3:p:291-292 is not listed on IDEAS
- Angus Deaton & Guy Laroque, 1990.
"On The Behavior of Commodity Prices,"
NBER Working Papers
3439, National Bureau of Economic Research, Inc.
- Dwight R. Sanders & Scott H. Irwin & Robert P. Merrin, 2010.
"The Adequacy of Speculation in Agricultural Futures Markets: Too Much of a Good Thing?,"
Applied Economic Perspectives and Policy,
Agricultural and Applied Economics Association, vol. 32(1), pages 77-94.
- Sanders, Dwight R. & Irwin, Scott H. & Merrin, Robert P., 2008. "The Adequacy of Speculation in Agricultural Futures Markets: Too Much of a Good Thing?," Marketing and Outlook Research Reports 37512, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics.
- Sanders, Dwight R. & Irwin, Scott H. & Merrin, Robert P., 2008. "The Adequacy of Speculation in Agricultural Futures Markets:Too Much of a Good Thing?," 2008 Conference, April 21-22, 2008, St. Louis, Missouri 37615, NCCC-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management.
- Brennan, Donna, 2003. "Price dynamics in the Bangladesh rice market: implications for public intervention," Agricultural Economics, Blackwell, vol. 29(1), pages 15-25, July.
- von Braun, Joachim & Ahmed, Akhter & Asenso-Okyere, Kwadwo & Fan, Shenggen & Gulati, Ashok & Hoddinott, John & Pandya-Lorch, Rajul & Rosegrant, Mark W. & Ruel, Marie & Torero, Maximo & van Rheenen, Te, 2008. "High food prices: The what, who, and how of proposed policy actions," Policy briefs 1A, International Food Policy Research Institute (IFPRI).
- Brennan, Donna & Williams, Jeffrey & Wright, Brian D, 1997. "Convenience Yield without the Convenience: A Spatial-Temporal Interpretation of Storage under Backwardation," Economic Journal, Royal Economic Society, vol. 107(443), pages 1009-1022, July.
- Eugenio S. A. Bobenrieth H. & Juan R. A. Bobenrieth H. & Brian D. Wright, 2002. "A Commodity Price Process with a Unique Continuous Invariant Distribution Having Infinite Mean," Econometrica, Econometric Society, vol. 70(3), pages 1213-1219, May.
- Bobenrieth H, Eugenio S A & Bobenrieth H, Juan R A & Wright, Brian D, 2004. "A Model of Supply of Storage," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 605-616, April.
- Robles, Miguel & Torero, Maximo & von Braun, Joachim, 2009. "When speculation matters:," Issue briefs 57, International Food Policy Research Institute (IFPRI).
- Brennan, Donna C., 2003. "Price dynamics in the Bangladesh rice market: implications for public intervention," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 29(1), July.
- Mitchell, Donald, 2008. "A note on rising food prices," Policy Research Working Paper Series 4682, The World Bank.
- Wright, Brian D & Williams, Jeffrey C, 1982. "The Economic Role of Commodity Storage," Economic Journal, Royal Economic Society, vol. 92(367), pages 596-614, September.
- Gilbert, Christopher L., 1996. "International Commodity Agreements: An obituary notice," World Development, Elsevier, vol. 24(1), pages 1-19, January.
- von Braun, Joachim, 2008. "Food and financial crises: Implications for agriculture and the poor," Food policy reports 20, International Food Policy Research Institute (IFPRI).
- von Braun, Joachim & Torero, Maximo, 2009. "Implementing physical and virtual food reserves to protect the poor and prevent market failure:," Policy briefs 10, International Food Policy Research Institute (IFPRI).
- Gustafson, Robert L., 1958. "Carryover levels for grains: A method for determining amounts that are optimal under specified conditions," Technical Bulletins 157231, United States Department of Agriculture, Economic Research Service.
- Williams,Jeffrey C. & Wright,Brian D., 1991.
"Storage and Commodity Markets,"
Cambridge University Press, number 9780521326162, December.
- Gerber, Nicolas & Van Eckert, Manfred & Breuer, Thomas, 2008. "The Impacts of Biofuel Production on Food Prices: a review," Discussion Papers 48193, University of Bonn, Center for Development Research (ZEF).
- Wright, Brian D, 1979. "The Effects of Ideal Production Stabilization: A Welfare Analysis Under Rational Behavior," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 1011-1033, October.
- Deaton, Angus & Laroque, Guy, 1996. "Competitive Storage and Commodity Price Dynamics," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 896-923, October.
- Subbarao,Kalanidhi, 2003. "Systemic shocks and social protection : role and effectiveness of public works programs," Policy Research Working Paper Series 25606, The World Bank.
When requesting a correction, please mention this item's handle: RePEc:oup:wbrobs:v:27:y:2012:i:2:p:222-260. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Oxford University Press)or (Christopher F. Baum)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.