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Importing High Food Prices by Exporting: Rice Prices in Lao PDR

Author

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  • Durevall, Dick

    (Department of Economics, School of Business, Economics and Law, Göteborg University)

  • van der Weide, Roy

    (Development Economics Research Group, The World Bank, Washington DC, The United States)

Abstract

This paper shows how a developing country, Lao PDR, imports high glutinous rice prices by exporting its staple food to neighboring countries, Vietnam and Thailand. Lao PDR has extensive export controls on rice, generating a sizable difference between domestic and international prices. Controls are relaxed after good harvests, leading to a surge in exports early in the season and rapidly rising prices later in the year. There is thus a strong case for removal of trade restrictions since they give rise to price spikes, keep the long-term price of glutinous rice low, and thereby hinder increases in income from agriculture. Although this is a case study of Lao PDR, the findings may equally apply to other developing countries that export their staple food.

Suggested Citation

  • Durevall, Dick & van der Weide, Roy, 2014. "Importing High Food Prices by Exporting: Rice Prices in Lao PDR," Working Papers in Economics 607, University of Gothenburg, Department of Economics.
    • Handle: RePEc:hhs:gunwpe:0607
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    File URL: https://gupea.ub.gu.se/handle/2077/37520
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    1. repec:arp:tjssrr:2019:p:876-887 is not listed on IDEAS
    2. World Bank Group, 2015. "Drivers of Poverty Reduction in Lao PDR," World Bank Publications - Reports 23339, The World Bank Group.

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    More about this item

    Keywords

    exports; food prices; free trade; rice prices; rice markets; sticky rice; welfare;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • 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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