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Rice Trade and Price Volatility: Implications on ASEAN and Global Food Security

Author

Listed:
  • Clarete, Ramon

    (University of the Philippines)

  • Adriano, Lourdes

    (Asian Development Bank)

  • Esteban, Amelia

    (University of British Columbia)

Abstract

This paper highlights the thinness of rice trade relative to wheat and maize, and the contrasting price volatility and tradability relations for wheat and maize, which display a positive correlation, and for rice, which show an inverse relation. The paper focuses on Southeast Asia, which hosts the world’s biggest rice exporters and rice importers. Using the Granger causality tests to determine correlation, the analysis concludes that very low global trading activity in rice that tends to self-perpetuate its dampening effect on trade does not cause extreme rice price volatility in the region, but the other way around. Rice-importing countries appear to resort to self-sufficiency measures as insurance to compensate for the high risks of unreliable rice supply and unaffordable rice prices. What would it take for countries to regain their confidence in external rice trade? The Association of Southeast Asian Nations Integrated Food Security Program provides a menu of policies for reducing and managing the chances of excessive rice price volatility.

Suggested Citation

  • Clarete, Ramon & Adriano, Lourdes & Esteban, Amelia, 2013. "Rice Trade and Price Volatility: Implications on ASEAN and Global Food Security," ADB Economics Working Paper Series 368, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0368
    Note: http://www.adb.org/sites/default/files/pub/2013/ewp-368.pdf
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    References listed on IDEAS

    as
    1. Sushil Bikhchandani & Sunil Sharma, 2001. "Herd Behavior in Financial Markets," IMF Staff Papers, Palgrave Macmillan, vol. 47(3), pages 1-1.
    2. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
    3. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    4. C. Peter Timmer, 2009. "Did Speculation Affect World Rice Prices?," Working Papers 09-07, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Jin Guo & Tetsuji Tanaka, 2020. "The Effectiveness of Self-Sufficiency Policy: International Price Transmissions in Beef Markets," Sustainability, MDPI, vol. 12(15), pages 1-23, July.
    2. 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(1).
    3. Juarez-Torres, Miriam & Arellano-Gonzalez, Jesus & Salcedo-Cisneros, Alejandrina & Zazueta-Borboa, Francisco, 2022. "Exports and domestic prices: an instrumental variables approach applied to Mexican exports of fruits and vegetables to the U.S," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322447, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    ASEAN cereal trade; ASEAN food security; ASEAN rice trade; rice price volatility; rice self-sufficiency programs; rice trade;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • 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; Animal Welfare Policy

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